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RQIH R&q Insurance Holdings Ltd

-0.525 (-4.38%)
08 Dec 2023 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
R&q Insurance Holdings Ltd LSE:RQIH London Ordinary Share BMG7371X1065 ORD 2P (DI)
  Price Change % Change Share Price Shares Traded Last Trade
  -0.525 -4.38% 11.45 63,064 16:35:04
Bid Price Offer Price High Price Low Price Open Price
11.05 11.85 11.60 11.60 11.60
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Title Insurance 82.8M -297M -0.7929 -0.15 43.45M
Last Trade Time Trade Type Trade Size Trade Price Currency
14:36:05 AT 7,955 11.60 GBX

R&q Insurance (RQIH) Latest News

R&q Insurance (RQIH) Discussions and Chat

R&q Insurance (RQIH) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
2023-12-08 14:36:0511.607,955922.78AT
2023-12-08 14:35:5511.464,229484.52O
2023-12-08 13:27:0812.054,880588.02O
2023-12-08 12:50:0111.6015,0001,740.00AT
2023-12-08 12:49:1411.708,000935.84O

R&q Insurance (RQIH) Top Chat Posts

Top Posts
Posted at 08/12/2023 08:20 by R&q Insurance Daily Update
R&q Insurance Holdings Ltd is listed in the Title Insurance sector of the London Stock Exchange with ticker RQIH. The last closing price for R&q Insurance was 11.98p.
R&q Insurance currently has 374,572,864 shares in issue. The market capitalisation of R&q Insurance is £43,450,452.
R&q Insurance has a price to earnings ratio (PE ratio) of -0.15.
This morning RQIH shares opened at 11.60p
Posted at 15/11/2023 14:12 by topvest
Very interesting developments here. I did well out of this by backing Ken Randall and exiting when he did. Phoenix and Slater thought they new best and have come thoroughly unstuck. I wonder whether Ken Randall may be tempted back? He would need to buy one of the larger holders shares first. It's back to what it was, with the legacy business, at 1/10th of the price!
Posted at 24/10/2023 10:25 by willemers0n
Indeed, but at 20 pence a share, it's now trading at 0.31 P/book or .21 P/ tangible book. They're getting $50mn working cap and liquidity for RQ next 18 months operations, plus that's assuming the top end of $80mn in collateral for RQ legacy liabilities and only $170mn de-levering. They're also injecting $76mn equity to Accredited ex-post transaction, so RQ should still own a stake in accredited right? Unless they're quite listerally asset stripping and leaving a doomed ship, in which case they'll have lawsuits coming their way from main shareholders. Would love ppls thoughts
Posted at 23/10/2023 17:51 by catabrit
Sadly this is what happens when you buy something you know little about. I put this on the watchlist after it was recommended to me on Twitter. I did about an hour of work on it at 50p ish and put it in the too hard pile. For me, legacy insurance with zero competitive advantage is a no-go area almost at any price. Especially if there’s no real alignment.
Posted at 29/9/2023 15:48 by petomi
Indeed the legacy business is a mess. Ironic that about a year ago Phoenix requisitioned a meeting to reinstate Ken Randall who as I recall was the architect of the original legacy business which has harboured so many problems

I haven't looked at the results in detail but the Accredited PM business looks to be doing well so let's hope there's value to be unlocked there. Presumably that's why the price has recovered well today after the initial sharp markdown

Posted at 03/5/2023 17:02 by simon gordon
The Insurer - 2/5/23:

R&Q working with Howden Tiger, Fenchurch, Barclays and Numis on strategic review

London-listed R&Q has retained a number of advisors – including Howden Tiger, Fenchurch Advisory, Numis Securities and Barclays Bank – as it explores a strategic review of the business, The Insurer understands.

The appointments come as R&Q pursues plans to separate its program management and fronting arm Accredited from its struggling legacy business.

Sources have told this publication the advisors are working on a variety of different options for the future of R&Q as well as the prospect of a bifurcation of the company.

It is understood the advisors are also exploring the potential for a capital raise which may be required to appease rating agency concerns ahead of any potential split of the company progressing.

When announced on 4 April, R&Q said the legal reorganisation of the company would be subject to regulatory and lender consents which it said it expects to obtain in Q2 2023.

AM Best put R&Q’s rating under review with negative implications following the announcement of its tabled plans to split its two business units. At the same time R&Q warned investors that it would post a heavy loss for 2022 as it deferred its reporting for the previous year until June.

The expected $30mn-$40mn operating loss for 2022 is being driven by a $55mn-$60mn loss in R&Q’s legacy operations, which AM Best said will likely lead to a material weakening of the group’s risk-adjusted capitalisation.

Corporate expenses added $35mn to the “preliminary and unaudited” figures for 2022
while its program management arm Accredited is in profit to the tune of $55mn-$60mn.

As this publication reported, the announcement was effectively a profits warning as the stock is lightly covered and corporate broker Numis previously projected a smaller full-year operating loss of $19mn.

The share price tumbled following the announcement and has since remained close to a historic low, closing on Friday at 60.98 pence a share – which values R&Q at around £200mn.

Under the stewardship of William Spiegel, who was parachuted in to succeed the retiring founder Ken Randall in 2022, R&Q has witnessed a failed buy-out at 175 pence a share, heavy losses, a defeated shareholder activist campaign, an almost entirely new leadership team and an emergency equity issue to prevent an AM Best downgrade.

R&Q is understood to have a long-standing relationship with Fenchurch Advisory, with the firm last year advising the company in its defence against shareholder Phoenix Asset Management’s attempt to requisition management changes.

Barclays Bank has acted as the joint bookrunner and joint broker on a number of transactions undertaken by R&Q, including on its recent disposal of its stake in Tradesman.

Numis Securities Limited – which is acting as nominated adviser (NOMAD), joint broker, and financial adviser in the strategic review – has also worked with R&Q in the past on a number of transactions. It has acted as R&Q’s NOMAD on the group’s activities, strategies and performance for several years.

R&Q split

Putting forward the rationale for a split, Spiegel said it is now in R&Q shareholders’ interests for Accredited to “stand on its own”.

Accredited – which provides fronting services to MGA carriers in the US and Europe and depends on a minimum A- financial strength rating – has grown to $1.8bn in 2022 and fee income of $80mn.

However, it currently relies on rated insurance company entities which currently also house and write R&Q’s legacy business.

R&Q has laid the blame for its 2022 loss squarely on its legacy business and its failure to complete enough transactions – with gross reserves acquired in 2022 standing at just $70mn, significantly down on previous years – as well as projections for its legacy sidecar Gibson Re.

R&Q and Howden Tiger declined to comment on this article.

Barclays Bank, Fenchurch Advisory and Numis were approached for comment.
Posted at 04/4/2023 17:12 by simon gordon

It's Dollars not Pounds.

The loss is as forecast.

I don't understand the bit about higher reserves and accounting treatment.

Legacy has killed the share price, if hadn't been for Program the company would have sunk. Previous management handed the new management a poisoned chalice, at least they are serious deal makers and are trying to get shareholders some money back. Was a poor decision to block the 175p from Brickell.
Posted at 10/12/2022 13:51 by red ninja
Yes, many things still looking right with R & Q, but some of the issues remain :-

1) Is there going to be any more issues with the legacy portfolio which will require another cash raise ?

2) Phoenix seemed very unhappy with William Spiegel as boss of the company. Does it make sense to invest in a company with a Chairman whose integrity has been called into question.

3) Phoenix still selling out of their share presumably. They don't seem to have found a fund who wants to buy their remaining 4.5%. The share overhang may weigh on the company share price for a while yet.

4) The institutions bailed out RQIH at £1.05, but there is no indication that they are accumulating at current prices around 60p
Posted at 10/6/2022 18:34 by simon gordon
Reinsurance News - 10/6/22:

What’s going on with 777 Partners’ R&Q Holdings shares?

In the wake of a failed attempt to acquire Randall & Quilter Investment Holdings Ltd (R&Q), it turns out a significant proportion of shares in R&Q owned by would-be acquirer 777 Partners were held as collateral to a loan by another party.

April 1st, perhaps a prescient date, it was announced that R&Q was set to be acquired by one of its major shareholders, Miami-based investment group 777 Partners.

The proposed deal valued R&Q’s share capital at approximately £482 million, with the acquisition vehicle Brickell PC Insurance Holdings LLC, which is backed by 777 Partners, also said to be intending to invest $100 million of new equity funding into R&Q.

R&Q had discovered a hole in some of its legacy reserves, making the funding essential.

At the time of the announcement in April, it was reported by R&Q that Brickell and its affiliates had a 23.2% shareholding in R&Q, but held 9.9% voting rights in the company.

R&Q was struggling to get sufficient investor support to approve the deal, subsequent to which it was reported that 777 Partners were pulling out of the acquisition.

A day later the deal had fallen apart after R&Q failed to gain shareholder approval, at which stage the legacy and program management specialist’s management said it would seek to raise the capital it needed on its own.

Fast-forward around two weeks and an intriguing filing was issued by alternative investments company Vida Capital.

Vida Capital is a specialist in life settlements and longevity insurance related investments, but also operates in some other areas of insurance related credit/debt financing we understand.

It states that the Vida Longevity Fund, LP, Vida Insurance Credit Opportunity Fund II, LP, and Vida Insurance Credit Opportunity Fund III, LP, are intending to sell 34,218,366 shares of ordinary shares of Randall & Quilter Investment Holdings Ltd.

It constitutes a notice of public sale under Article 9 of the Uniform Commercial Code, and we’re told that the details suggest 777 Partners had pledged these R&Q shares as collateral to a loan, or financing, supplied by Vida.

The filing states that the shares were pledged as collateral to the three aforementioned Vida Capital managed investment funds, which are the Secured Parties, by Brickell PC Insurance Holdings LLC (the Pledgor) and 777 Partners LLC (the Borrower).

Together, the filing names Brickell and 777 as the Debtors in this arrangement.

The sale of the shares is being held to “enforce the rights of the Secured Parties,” so the Vida funds.

Here, the information is lacking as to exactly what has triggered the rights to sell the R&Q shares that were pledged as collateral, but our sources have made two possible suggestions.

One, that the share price may have fallen below a peg, or predefined level, allowing the lender to sell the collateral. R&Q’s share price is currently down roughly 42% since the acquisition attempt was announced.

Or two, that the borrower is in default, in some way, to the loan or financing conditions and so the collateral can be sold to make good on the arrangement.

So, it appears 777 Partners or an entity owned by it had borrowed capital or been financed by entities operated by Vida Capital and that 777 had pledged the R&Q shares as collateral to it, giving Vida a first lien right to them.

That first lien right has now been taken, possibly for one of the two reasons mentioned above, allowing Vida to sell the shares.

But given the over 34 million R&Q shares represent roughly 12.5% of the legacy and program management firms’ share capital and this had been pledged to another party, while cited in acquisition announcements, it does make for an interesting nugget of information alongside this M&A saga.

It’s more than half of the shareholding 777 Partners was said to have in R&Q at the time of its acquisition attempt.

Was it fair to call these a shareholding if they were pledged as collateral elsewhere? Or did 777 have another 12.5% of R&Q’s shares, outside of the 23.2% shareholding cited?

Now these 34 million R&Q shares appear to have been forfeit to Vida to sell, although it’s not clear what, if any, value could still flow back to 777 from the sale.

For those interested, the notice of sale of the shares can be found here.
Posted at 19/5/2022 05:50 by simon gordon
Investors Chronicle - 18/5/22:

The holding in danger of falling into private equity’s maw is in insurance specialist Randall & Quilter Investment Holdings (RQIH). This Friday (20 May) R&Q’s shareholders will vote on whether to accept a 175p-per-share cash offer from 777 Partners, a Miami-based private equity house perhaps best known in Europe as the owner of Italy’s oldest football club, the perennially under-achieving Genoa CFC.

Then again 777’s offer, which values R&Q’s equity at £482m, might well fail. R&Q’s second-biggest shareholder, Slater Investments, which owns almost 10 per cent, says it will reject the offer and the share price has responded accordingly. It is back to 140p, the level at which 777 made its move. At a 20 per cent discount to the offer, essentially the market price is saying “Come up with a lot more than 175p or shove off back to Miami”.

There is no getting away from it, 777’s offer is underwhelming. It is at a level R&Q’s shares almost touched in February, is 7 per cent below the 12-month high and 10 per cent lower than October 2019’s all-time high. As such, the directors’ recommendation is redolent of the inadequate offer earlier this year for specialist travel agent Air Partner, another Bearbull holding, which was recommended and blithely waived through by shareholders. In both cases, the offer was below recent highs and – more important – was recommended even though each group’s trading was good and its prospects were better.

As with Air Partner, R&Q’s directors are keen to tell shareholders that 777’s offer “demonstrates the strength of both our business today and the opportunities ahead of us”. In which case, runs the thought, why on Earth are you recommending such an inadequate offer?

Sure, it’s tricky to value R&Q. Partly, that’s a function of how insurance companies operate, generating most of their income upfront and only meeting the associated costs at some indeterminate point in the future, if at all. That is chiefly why insurers are valued in relation to the net assets on their balance sheet; at least that provides hard and fast figures from which to start. Even on that basis, 777’s offer at 1.8 times estimated net tangible assets at the end of 2021 is tight-fisted. A ratio of at least 2.0 times would be more like it.

Meanwhile, R&Q is in the process of transforming itself from a capital-intensive conventional non-life insurer into a capital-light fee-based business. When that’s mostly done, it may be generating $90m (£74m) of operating profit in 2023, which could feed down to 15p of earnings. Rate those earnings at the sort of multiple on which shares in full-service insurance brokers trade – maybe 20 times – and a share price of 300p is within reach. Granted, that’s a top-end value. Even so, it highlights the inadequacy of 777’s offer. Whether enough shareholders will see it that way will soon be known.
Posted at 16/11/2021 13:46 by simon gordon
This fund manager has RQIH in his top ten - here's his commentary for November 2021:

Howay Investments

Tomorrow’s fish and chip paper

Volatility has returned to the stock market in recent weeks due to concerns around strained global supply chains and rising inflation. When volatility is on the rise there is a tendency for many commentators to use share price movements as the determinant of truth for any given company. If a company’s share price rises significantly then it must be because they are doing everything right and if a company’s share price falls significantly then that company must be doing everything wrong.

This is clearly not right. Humans regularly over-react to good news and bad news and this naturally plays out in a pronounced way in the melting pot of human emotions that is the stock market.

A few weeks ago, Jeff Bezos tweeted a picture of the front cover of Barron’s, the prestigious US financial news journal from May 1999. The headline of the article was ‘Amazon.Bomb’ and the narrative on the front cover read as follows ‘The idea that Amazon CEO Jeff Bezos has pioneered a new business paradigm is silly. He’s just another middleman and the stock market is beginning to catch on to that fact. The real winners on the internet will be firms that sell their own products directly to consumers. Just look at what’s happening at Sony, Dell and Bertelsmann.’

After the article was published, Amazon’s shares declined by around 70% over the next 2 years and it took another 6 years for the share price to recover to the level before the article was published. Over that period, you can imagine how great the journalist must have felt about his big call on Amazon. He must have been the talk of the office at Barron’s with everyone giving him a high five for getting Amazon right. After all, the share price had plummeted so he must be right, right?

Wrong! Today, Amazon is one of the largest companies of all time, it has revolutionized two different industries of the global economy (consumer retail and the Cloud) and Amazon’s share price is around 53x higher than at the date the Barron’s article was first published. $10,000 of shares held then would be worth $530,000 today! It’s not unusual for historic headlines to look ridiculous when we look back on them with the benefit of the passage of time. As the old saying goes, today’s headlines are tomorrow’s fish and chip paper.

The Amazon article reminded us of one of the UK’s few ecommerce success stories over the last decade, Ocado, the grocery delivery business. Ocado floated on the London stock exchange in 2010 at a price of 180p per share and by the end of December 2011 the shares had fallen by around two thirds. Most financial analysts at the time were highly disparaging about Ocado. Below are quotes from some of the leading analysts at the time (we have withheld their names to spare their blushes!):

“Even at the revised valuation, the company is still overvalued and expensive. We would not be surprised to see hedge funds shorting the stock.”

“It is astonishing how high a price is being paid for Ocado.”

“Like many, we are buyers of its service, but not the shares at these levels. We think the current price simply asks too much of the company in the next 10 years, especially bearing in mind the starting point.”

10 years later Ocado shares had increased more than 10x from the IPO price and 30x from the December 2011 low. Most UK fund managers missed Ocado in the same way that most US fund managers missed Amazon. Despite having an increasing number of online deliveries arriving at their households over the years, many professional investors failed to spot what was happening with ecommerce, which with the benefit of hindsight now seems obvious to all of us. Why did this happen?

We believe the main reason is short-termism. In our view, many professional investors spend too much time focusing on the short-term financial performance of businesses and insufficient time thinking about their long-term potential. All of the Ocado quotes above stem from the fact that the analysts were too focused on what Ocado was then (a small and unprofitable business) rather than understanding what it could be in the future.

Wayne Gretzky, the famous ice hockey legend once described the reason for his success as “I skate to where the puck is going to be, not where it’s been.” Investing is about identifying companies that are attractively valued relative to their future profits. All investors would agree with this statement, but in our view, most focus on business value relative to existing profits. Therein lies a great opportunity for the long-term patient investor.
R&q Insurance share price data is direct from the London Stock Exchange

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