R&q Insurance Share Discussion Threads

[speedsgh] 25/10/2017 09:18

jonwig - Likewise, depending on how one defines 'lots'. Have applied for excess on top of measly Open Offer entitlement. Hoping to increase holding by c25%.

[jonwig] 25/10/2017 09:02

I applied for lots of extra shares, but if I get all of them I'll maybe sell a few. Result of issue on Monday (30th), dealings on Tuesday.

[alter ego] 06/10/2017 16:33

AFAIK, If you hold shares in an ISA, it makes no difference but outside an ISA, paying a return of capital defers any tax liability until you sell shares. Even then, since a return of capital reduces the overall cost of buying the shares and increases any CGT gain, you may still avoid tax by using your CGT allowance.

[lord gnome] 06/10/2017 14:35

I am completely indifferent as to whether I receive distributions via dividends or return of capital. All I want is the cash in my bank account. I do see the point, however, that using return of capital makes it look to many potential investors that the company doesn't pay dividends.

[jonwig] 06/10/2017 13:47

speeds - as far as the OO goes, I'll be keen for more - see the NAV uplift.

And dividends: I think RQIH might have escaped some filters which will have recorded zero until now. (Digital Look, for instance.) So it generates interest in the future? Just a thought. Taxwise, I'm indifferent, as my holding is in an ISA, but some large holders might prefer ROC.

[speedsgh] 06/10/2017 13:34

I note they they have agreed to review whether distributions should be made via dividends, rather than via capital returns, in future. The outcome of this will presumably depend largely on the tax status of the main shareholders & Mssrs Randall & Quilter.

from pg11 of the Corcular pdf...



12. DISTRIBUTION POLICY
The Group operates a progressive distribution policy. Distributions are made bi-annually and are typically paid in May / June and October / November. New Ordinary Shares issued under the Firm Placing and Open Offer will not affect this policy. New Ordinary Shares issued under the Firm Placing and Open Offer will be eligible for the dividend payment expected in May / June 2018. Without pre-judging the outcome, the Board has committed to reviewing whether it would be in the interests of shareholders to look at paying dividends rather than capital returns (which form the basis of the current distribution strategy). For the avoidance of doubt, any such change will not affect the progressive nature of the policy.

[speedsgh] 06/10/2017 13:26

RQIH are raising a fair chunk. Having already raised £16.9m gross in March 2017 - - they are now looking to increase their share capital by up to 43.5% to raise up to £49.3m by way of a firm Placing and a 1-new-for-every-26-exsting Open Offer. Existing shareholders may apply for additional Open Offer shares over & above their basic 1:26 entitlement via the Excess Application Facility (see pg9 of circular pdf).

[speedsgh] 06/10/2017 13:07

Circular: Firm Placing, Open Offer & Notice of General Meeting -

[stemis] 05/10/2017 15:57

Second fund raising in 8 months...

[lord gnome] 05/10/2017 09:43

One out of left field. I don't think anyone saw that coming. We are losing our eponymous founders next year as well. That was on the cards, but I thought they might look to sell the company ahead of retirement and take their cash into the sun lit uplands. Interesting that the placees seem to have insisted that the Directors put some more skin in the game.

[jonwig] 05/10/2017 08:42

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 11:04

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 10:24

Which litigation funder are you in?

[jonwig] 08/9/2017 15:39

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

[stemis] 08/9/2017 14:56

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 13:48

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 12:42

Is it uncorrelated?

[jonwig] 08/9/2017 12:11

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 12:03

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 11:14

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 13:51

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 13:40

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 12:24

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

[stemis] 04/9/2017 16:15

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 07:28

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