R&q Insurance Share Discussion Threads

[funchalman] 20/4/2012 16:36

whatever way you want to read the final results rns , it is clear we are getting 4.9p in the hand , in fact an increase over last years payout.
one would expect reports in newspapers etc to be a bit more accurate than the misleading statements made in the two reports i pointed out.but then again maybe not.

[oniabsta] 20/4/2012 14:25

Tried to show how the media have picked out the fact that there is no final divi.
by linking to the statement in the finals, thats all.

[speedsgh] 20/4/2012 13:54

Whilst pedants will no doubt continue to point out that RQIH shareholders will not be receiving a dividend, we will however be receiving a distribution in the form of a return of cash to the tune of 4.9p share. Dividend... return of cash... makes no difference to me. Whichever way it's still money being distributed to shareholders by the company and they even give you the option of receiving it as income or a capital repayment.

[oniabsta] 20/4/2012 13:50

I haven't read the articles mentioned in post 180 above but I'm simply saying technically they are right.

of course I know we will receive a divi

[lord gnome] 20/4/2012 13:44

oniabsta - the G and H scheme is the final dividend, but by another name and by their usual convoluted route.

[oniabsta] 20/4/2012 13:43

from the final results:-

"Details of the proposed G and H scheme will be announced shortly. In light of this, the Board will not be recommending a final dividend for the year."

[jonwig] 20/4/2012 13:40

Well, they do say - near the top of the results announcement:

"Return of cash of 4.9p, through a G and H share scheme [details of which are to be announced shortly]"

which, technically, might not be a 'dividend', but it sure will look like one to me!

Adam's post [#178] might be relevant, and I'll look when I have time - but even then I probably won't be much wiser.

[lord gnome] 20/4/2012 13:39

Yes they are - but by their usual convoluted mechanism.

[oniabsta] 20/4/2012 13:30

They are not paying a final div. Read the final results

[funchalman] 20/4/2012 13:14

i have come across two items , one in the daily mail today , and another on sharecast news yesterday , both saying that no final dividend is being paid by rqih.just hope people have not sold any shares in rqih on the strength of these
two erroneous reports.

[eekorehc] 20/4/2012 10:29

From a tip sheet

Randall & Quilter has also today announced it has reached an agreement for a $2.7 million acquisition of Trimac Acceptance Ltd, a Barbados domiciled captive insurer which has been in run-off since 1996. This has an adjusted net asset value of $2.9 million, with Randall & Quilter adding that it "will optimise operational and capital efficiency through a novation to a group owned cell within our Bermudian captive management operations... Will receive a fee for this novation from the Trimac group. The Trimac group will also transfer sufficient cash into the cell to cover held reserves and collateral requirements and will provide the cell with a full indemnity for any future claims deterioration".

Balance Sheet & Shareholder Distribution...

At the year-end cash totalled £37.18 million and net tangible asset value per share was 107.3p, up from 95.9p a year earlier – with the company emphasising it "has internal resources to take advantage of the current pipeline of legacy insurance acquisition opportunities". It also proposes to pay out 4.9p per share in cash to all shareholders .due course"), which will take its full-year distributions to 8.1p per share - an increase of more than 10% compared to 2010.

Evaluation...

The shares .trade at 106p – a discount to the end-2011 net tangible asset value and capitalising the company at £52.4 million. Given the asset backing, strong and growing profitability and 7.6% yield (likely above 8% for the current year), I continue to concur with the company's joint broker, Shore Capital, that "the stock rating has yet to reflect the value latent in the various run-offs within Randall & Quilter's portfolio nor the value being created for shareholders within the 'live' market units". As both an income and growth play, . "buy".

[adam] 20/4/2012 09:17

Agree with most of the comments. They state that one of their bigger concerns in regarding Capital Obligations for US subsidiaries and new rules on that. I take it to mean CRR (Capital Resource Requirements) and GENPRU 2.2? So they are concerned that they will have to find more or different regulatory capital? They say FSA inscrutable on this and looking at other structures. So how big a risk is this? Is it just a question of they will be able to find away round it with a bit of financial engineering or that it is a potential bomb?

[lord gnome] 19/4/2012 08:21

That's the way I see this share SteMiS. Safe little number with a better return than cash in the bank with the opportunity for capital upside at some time in the future. A widows and orphans stock.

[stemis] 19/4/2012 08:16

Earnings aren't really much of an indicator of valuation in companies like RQIH, because of the lumpiness of profit recognition. What is important is tNAV and yield. The current price is a 2% discount to tNAV and a yield of 7.7%.

However fwiw, the 'dividend' of 8.1p (although its done as a capital distribution) is less than consensus forecast of 8.34p. Profit also seems to be down on forecast, although its hard to know what is and isn't included in forecasts.

Performance is the usual curates egg. Disappointing losses in the underwriting management and captives divisions where they seemt to be putting a lot of investment. Run off and insurance services are where they continue to make the money.

If the discount to tNAV remains at this level then shareholders will benefit from the dividend and from future increases in tNAV. Dividend is likely to be up by at least 5% next year.

Back to sleep for another year.

[jonwig] 19/4/2012 07:05

The goodwill impairment, relating to R&Q Re US was commented on in the Group's recent trading update. The impairment arises due to the continued low market yields on high quality fixed income securities and the acceleration in settlement of known claims during 2011 which resulted in much lower than anticipated cash and investment balances by year end. The impairment has not arisen due to any change in expectations of the performance of any of the Group's operating companies and has not impacted the Group's net tangible asset value per share. The Group does not carry any other goodwill attributable to insurance company subsidiaries in its financial statements.

They headline NTAV of course.
It doesn't give me much concern, though low yields on government bonds are a bane to all insurers.

[lord gnome] 19/4/2012 06:43

The goodwill impairment is old news, but not nice nevertheless. What is nice is the 10% increase in the final dividend. Looks solid enough going forward and the yield is very tasty. Another acquisition as well. Not that I understand a word of the jargon, but I assume it will be good news and should be profitable.

[18bt] 19/4/2012 06:36

Complex results today, which bear greater study. At first sight look good, but will need to study the goodwill impariment more closely.

[stemis] 05/3/2012 10:18

"The Group's progressive distribution policy is also unaffected and the total distributions to shareholders in respect of the 2011 financial year will be in line with expectations. "

[lord gnome] 05/3/2012 07:48

Yes, good news from RQIH. The company seems to be making all the right moves, so once the market improves the shares should really start to motor. In the meantime, I'll keep taking the dividends.

[18bt] 05/3/2012 07:20

Good trading update today. Not worried about the impairment - it sounds totally plausible and quite comforting that the CFO spotted it. I've only seen one broker's forecast on Digital Look, but this must put 2011 PBT around £8.5m to give a current PER of 8.5x and a yield of 7.5%. The yield on the finalk alone to be paid June is c3.4%.

[alter ego] 02/3/2012 09:25

The trick here is showing a surplus once all the claims have been settled - just like any other insurance operation really - so you have to trust that when they take over a book of outstanding claims, they pay just enough to guarantee a profit when it's all done and dusted.

[labatie] 02/3/2012 08:51

Thanks jonwig.

Whatever it is that RQIH actually does, they're plainly good at it!

[jonwig] 02/3/2012 07:17

"Reinsurance-to-Close" - in case anyone's wondering (as I was) it's explained here:

[red ninja] 10/2/2012 16:50

Speedsgh

thanks

[speedsgh] 10/2/2012 16:32

Founded in 1992 by executive chairman and chief executive Ken Randall and finance director Alan Quilter, Randall & Quilter makes its money by offering services to insurers and reinsurers and through the ownership of reinsurance companies in run-off. It has proved a profitable investment for us over the past year as we have banked dividends of 7.65p a share in June and October and the shares have also increased 9p from the price we paid last February. Combined the investment has returned a healthy 18.3 per cent.

The investment case remains solid when you consider that the shares trade on a hefty 33 per cent discount to the company's last reported net asset value (NAV). Add in a rolling yield of 7.7 per cent and they remain an income buy.