R&q Insurance Share Discussion Threads

[jonwig] 05/10/2017 09:42

Fundraising - a surprise for me:



The open offer is a tiny proportion of the total (1-for-26 at 129p) but it looks worth having (and then some?) given they say the current NAV ex-goodwill is 126p-136p. It was only 106.5p at 30 June ... almost loks like a typo there!

[jonwig] 09/9/2017 12:04

I held Burford and Juridica almost from the start, but sold JIL after its first setback. BUR's business model has evolved a lot and it's unlikely to have major bumps.

[stemis] 09/9/2017 11:24

Which litigation funder are you in?

[jonwig] 08/9/2017 16:39

True - plus cat insurance (which isn't doing much for me at the mo!) and litigation funding (which is).

[stemis] 08/9/2017 15:56

I think the last bit is the key. You could say that a lot of businesses have nothing to do with equity values; engineering, mining, retail. When I think of non correlated I think of stuff like Alternative Asset Opps which held traded life insurance policies. As people died the policies paid and cash was distributed to shareholders. It really didn't matter what the stock market did, the return was just a function of mortality...

[jonwig] 08/9/2017 14:48

Yes, to the extent that the insurance run-off business has nothing to do with equity values (has it?) although the company does invest its cash in 'securities' which I assume in this case are short-dated govt bonds and therefore low volatility, low return.

That's not the same as saying that the share price is uncorrelated of course! When folks sell stuff, they can be pretty indiscriminate.

[stemis] 08/9/2017 13:42

Is it uncorrelated?

[jonwig] 08/9/2017 13:11

Stemis - Thanks for response. Is the lack of correlation with equity markets a plus factor? I'd think so at this point.

[stemis] 08/9/2017 13:03

No, I think they are all part of the income statement. I can't see any movement in equity that would correspond to reserves release. I agree with you that profit is lumpy and it's hard always to see how they are making it. Similarly I was/am happy to trust management to just get on with it. I guess it just comes down to valuation. NAV cover and yield are key ratios and I feel historically these are now at low levels and I can't see much in the figures that suggests that gap is going to be closed any time soon. So for me the risk to the share price is disproportionately on the downside. If the shares were 100p or even 120p I would feel different...but they aren't.

[jonwig] 08/9/2017 12:14

Stemis - I've only just seen the results (away for a week and offline), but I'm a bit puzzled by your reaction to the H1. You were always a big advocate of "accounts too complex so trust them to get on with it" and generally I'd agree.

But isn't reserves release always a big factor in their performance? This half, it's 5.7p. From what I see these aren't part of the income statement but are capital which can be returned rather than kept for regulatory purposes. And goodwill on bargain purchase is one of their chief sources of income. Positive cashflow of £22m might be significant.

And, of course, speedsgh's NAV analysis shows where the distributions can come from. It's not really from "profit" as I see it.

[speedsgh] 05/9/2017 14:51

Anyone seen any forecasts for shareholder distributions in the current FY? The 2017 interim distribution (3.50p) has been increased for the first time since 2012 (3.40p). Full yr distributions also returned to growth in 2016 (8.60p) for the first time since 2012 (8.40p).

interim (rtn of capital) - 3.50p/share (paid Oct 17)
----------------------------------------------------------------
TOTAL FY 2016 - 8.60p
final (rtn of capital) - 5.20p/share (paid Jun 17)
interim (rtn of capital) - 3.40p/share (paid Nov 16)
----------------------------------------------------------------
TOTAL FY 2015 - 8.40p
final (rtn of capital) - 5.00p/share (paid Jun 16)
interim (rtn of capital) - 3.40p/share (paid Nov 15)
----------------------------------------------------------------
TOTAL FY 2014 - 8.40p
final (rtn of capital) - 5.00p/share (paid Aug 15)
interim (rtn of capital) - 3.40p/share (paid Oct 14)
----------------------------------------------------------------
TOTAL FY 2013 - 8.40p
final (rtn of capital) - 5.00p/share (paid Jun 14)
interim (rtn of capital) - 3.40p/share (paid Nov 13)
----------------------------------------------------------------
TOTAL FY 2012 - 8.40p
final (rtn of capital) - 5.00p/share (paid Jun 13)
interim (rtn of capital) - 3.40p/share (paid Nov 12)
----------------------------------------------------------------
TOTAL FY 2011 - 8.10p
final (rtn of capital) - 4.90p/share (paid Jun 12)
interim (rtn of capital) - 3.20p/share (paid Oct 11)

[speedsgh] 05/9/2017 14:40

Recent history of Net Tangible Assets per share (NTAV):
31/12/2010 95.9p
30/6/2011 105.9p
31/12/2011 107.3p
30/6/2012 106.7p
31/12/2012 116.7p
30/6/2013 119.0p
31/12/2013 116.4p
30/6/2014 109.4p
31/12/2014 88.2p
30/6/2015 84.3p
31/12/2015 83.7p
30/6/2016 81.8p
31/12/2016 85.1p
30/6/2017 88.6p

Book value per share ex goodwill (only reported since 30/6/15):
30/6/2015 94.1p
31/12/2015 98.5p
30/6/2016 98.1p
31/12/2016 107.4p
30/6/2017 106.5p

[petewy] 05/9/2017 13:24

Thanks SteMIS. Considering buying but results look too go to be true.
I'll wait.

[stemis] 04/9/2017 17:15

That's me out. Maybe I'm missing something but, despite all the bullish narrative, the profit in H1 arose solely because the company booked negative goodwill gained on a bargain purchase to P&L,. Without that the company would have made a loss. There's absolutely no analysis of the number so I don't know what acquisition it relates to.

RQIH is a good business and I hope I'll own shares in it in the future but I think the share price has got ahead of itself. NAV is 106.5p and tNAV 88.6p. 147p is a chunky premium and yield is now just under 6%.

[lord gnome] 04/9/2017 08:28

Yes, this looks to be a decent set of numbers to my untrained eye. Certainly won't do the share price any harm.

[this_is_me] 04/9/2017 07:35

Excellent results. Everything going well and long term prospects are improving.

[jonwig] 29/6/2017 13:35

Around 5.7% of the company, and the share price hasn't missed a beat.
Clearly they've been absorbed easily.

EDIT: another large trade just gone through.

[speedsgh] 29/6/2017 11:32

A couple of large sells by Mr Randall & Mr Quilter...

PDMR Share Dealings -

Kenneth Randall sold 3,631,012 @ 147p = £5.3m
Alan Quilter sold 1,400,000 @ 147p = £2.05m

[jonwig] 27/6/2017 08:27

Fenners,I,m not happy with my reply ... the second bit anyway!

[lord gnome] 27/6/2017 08:18

Clearly you are fenners66. The managing agency was in the books for a mere £1.3 millions (without checking) and they sold it at a profit of over £12 millions. Book value doesn't always tell the full story. Buy this stock and you are buying a steady income stream.

Edit: I assumed that you are referring to RQIH. Were you referring to the disposal? In which case I suggest that the value was in the fact that it gave the purchaser access to Lloyds marketplace.

[jonwig] 27/6/2017 06:51

I suspect 'book value' of assets is a problematic area for IFRS, which doesn't seem to allow valuation of professional expertise. And the 'incentive payments' (I guess about £3.5m) will essentially belong to the managing agency. Look at the capacity of the syndicates under management.

[fenners66] 26/6/2017 20:47

Seems a very high price for very little assets and pro-forma profitability. Are we missing something here?

[ganthorpe] 23/6/2017 09:00

I think the reason for the disposals is called " getting back to your knitting".
The Lloyds syndicate seems to have underperformed since they started it.
Maybe Synergy was sold because there wasn't any.
Bought back in

[lord gnome] 23/6/2017 08:32

Looks to be a good deal at a good price. Hopefully the share price can begin to climb again. It has sold off recently for no real reason that I can fathom.

[jonwig] 23/6/2017 07:09

Sale of Lloyds Managing Agency:



Profit of £12.6m on book value of £1.3m adds over 14p to the net assets per share ... I think! This ought to do something for the share price this morning.