R&q Insurance Share Discussion Threads

[topvest] 13/2/2019 09:42

Charles Stanley Direct are normally pretty quick. Personal crest membership.

[3800] 12/2/2019 22:35

Just had another look at selftrade a secure message is now showing.

[alter ego] 12/2/2019 22:28

Some brokers are quicker than others. HL have already invited clients to make their choice.

[3800] 12/2/2019 22:20

Has your broker notified you of this ? I hold mine in a isa with selftrade and so far haven't been notified at all.

[topvest] 12/2/2019 21:45

I've just taken the basic entitlement in the open offer.

[topvest] 09/2/2019 20:38

For what its worth, I also think that they should split R&Q into 2 businesses. There is the capital intensive legacy business and the asset light managing agent business. One is valued based on NAV and dividend, the other on profitability. They don't sit well together.

[topvest] 09/2/2019 20:17

Well 153p is significantly in excess of book value. I think its a good deal that raises NAV. The 200p+ share price had got a bit carried away in my view.

Then again, I'm not looking to invest much more here as its quite a capital intensive business.

You might find this interesting. I still hold some shares in AHCP which owns ASTA CAPITAL which are much more successful at managing syndicates than R&Q (C£5-6M profit per annum). Page 12 shows their position versus Randall & Quilter.

ASTA could potentially be in play through its shoot out clause as three holders own 30% each. I wonder whether R&Q might be interested in picking up a stake and merging it with its own business?

ACHP are looking to exit their 30% in 2019, either imminently or through the shoot out clause in mid-2019.

www.ach-plc.com/assets/Uploads/contentblocks/pdfs/Presentation-to-the-ACHP-AGM-GE-26jun18-v3.pdf

ACHP has been a disappointing investment for me, albeit it does own 30% of a very good company ASTA Capital so I'm hoping that I will get my back soon + maybe a nice premium. A tie-up with R&Q would be perfect, but maybe just wishful thinking!

[lord gnome] 09/2/2019 18:47

I can't agree topvest. It is a massive dilution. They are giving away 52% of the company at a hefty discount. We were over £2 a share not so long ago. All we get is a paltry 1 for 28 in the open offer.
Why not announce the completion of the US deal, push the share price up and have a decent placing and open offer from there? Shareholders should get at least as many shares as placees.
I am also not happy about the failure to announce the big loan fundraising before Christmas at what amounts to junk bond rates.
Whatever deals they are doing, they had better be world class.

[topvest] 09/2/2019 18:29

Well I think they have handled it pretty well and issued the shares with fairly minimal dilution given the size of the deal. If Phoenix are supporting it then that’s good enough for me. I’m happy to just take a few in the open offer. It’s a far better deal than a dilutive rights issue!

[jonwig] 08/2/2019 09:30

Circular:



Includes quite a bit on how they earn their money, timing of receipt, etc.

(Incidentally, is the shutdown causing delay in the Global Re approval?)

[dangersimpson2] 07/2/2019 11:42

I agree retaining capital rather than distributing it over the last few years wouldn't completely fund the whole of their recent expansion but it would have reduced the capital requirements and made the raises less dilutive. It is still cash that is return to all shareholders and then raised from a select few at a discount. It is only market optics - investors in insurance companies live to receive income - that means they pay out a regular distribution.

[jonwig] 07/2/2019 09:39

@ danger #664 - retain dividends? 2017 distribution was 8.9p so a similar one for 2018 full year would cost £11.2m. Sums involved here are a lot larger. And capital releases should also be much larger in the future, even when spread over more shares.

[lord gnome] 07/2/2019 08:59

Badly handled in the extreme. It's as if they deliberately set out to screw their PIs. Tomorrow the share price will recover when news of the completion of the Global Re acquisition is released (conspiracy theorist? Moi?).

Why US investors? Won't British Institutions stump up?

[speedsgh] 07/2/2019 08:45

Hmm. Not the news I was expecting next from RQIH. Placing representing 52% of already issued share capital prior to the placing; that's a fair old chunk. Would agree that this appears to have been handled poorly with little regard being given to non-institutional investors i.e. you & me. And still no indication on when the acquisition of Global Re US will complete. I was expecting that news next. Original delay announcement suggested completion in "early 2019". Much to mull over.

[jonwig] 07/2/2019 08:18

This_is_me - I'm not sure if the dividend will be affected. If they mean to use the money to make ready purchases below book value they'll immediately release negative goodwill to distribute as return-of-capital.

Presumably it's that which persuaded them to take out the short-term USD bridging loan which they had already planned to repay through a share issue once the market wobble had stabilised.

So in that case the share issue was a good move. It just lacks execution and transparency.

Incidentally the record date for the o-o has already passed.

[dangersimpson2] 07/2/2019 08:16

Discount is bigger than last placing but then the amount raised is larger this time.

I can see why they go for the certainty of a placing but the small amount of open offer does leave existing holders diluted. That said, last time the price dropped below the placing price shortly afterwards so smaller holders could pick up all they wanted at a discount to the larger holders - no guarantee that this will happen again though.

This is obviously part of their strategy to add scale, but when you know that further placings could come at a discount in the future it does rather are going to keep a lid on the price. I also don't get why they keep doing a regular return of capital, if their strategy is to scale up then giving a regular payment but taking it all back and more in a placing seems pointless. I know the market expects insurers to pay an income but think they should either go for scale and cut the payments, or run the business for cash and make regular payments.

[this_is_me] 07/2/2019 08:09

I will be voting against it. Once again institutions are being gives shares on the cheap to the detriment of ordinary shareholders. I also always vote against A.G.M. resolutions giving boards authority to issue placing shares.

I presume that this is also going to trash the dividend for a number of years.

[kevph] 07/2/2019 08:00

Yeah. Agreed. The 6.35% over Libor is a hefty premium to pay. Not much in it for PIs either.My only consolation is that RQIH clearly has ambitions and we are party to a much larger business. To raise £177m over a few months says they see a lot of profitable opportunity out there.Not sure they have gone about it the right way though.

[jonwig] 07/2/2019 07:25

Placing and open offer:



What makes me pretty angry:

1) £100m raised in the placing at a rather low 153p.

2) A mere £7m available to PIs in the open offer (1:28 basis).

3) Nowhere does it say that the o-o is at 153p. (Yes, I know it should be obvious.)

4) "On 28 December 2018 the Group raised $70m through the issuance of 10 year senior subordinated loan notes at a margin of 6.35 per cent. over the U.S. Dollar 3-month LIBOR." I missed the announcement of this. Or rather, I didn't miss it because they didn't announce it!

The placing itself seems to be done-and-dusted, so no doubt some placing shares will find their way onto the market and the share price will fall today. To anywhere near 153p? Probably not.

[lord gnome] 22/1/2019 14:43

Hopefully, speedsgh. Let's hope that good news is on the way, although this looks like a few PI buys rather than any serious buying by someone with an inside track on the news.

[speedsgh] 22/1/2019 14:27

Possibly leak of impending completion of delayed Global Re US acquisition?

from original acquisiton rns on 19/9/18:



Based on R&Q's own reserve assessment and significant operational synergies, the acquisition will generate a material gain for the Group. Should regulatory approval be received and completion occurs before the end of 2018, it is expected to result in the Group's profit for full year 2018 being substantially ahead of market expectations...

from update on 11/12/18 confirming delay in completion:



As a consequence of the applicable accounting requirements, the benefits of the acquisition will therefore now be accounted for in the first half of 2019, rather than the full year 2018. The Board's current assessment is that, as a consequence, while the Group's profit before tax for 2018 will be below current market expectations, that for 2019 will be correspondingly above current market expectations.

Ken Randall, Group Chairman and Chief Executive Officer said "We have always stressed the difficulty of predicting the exact timing of legacy deals. The acquisition of Global Re remains on track and the new business pipeline for legacy is very encouraging. Moreover, Accredited, our programme management business in the USA and Europe, continues to attract a lot of interest. By 31 December 2018, we anticipate having signed contracts with managing general agents which are expected to generate future gross written premiums of around $500m per annum. Both of the Accredited companies have a strong pipeline of further opportunities for execution in 2019. As we have previously indicated, earned commissions on programme business will begin to have a material impact on the Group's results from the second half of 2019 and beyond".

[lord gnome] 22/1/2019 10:38

And all of a sudden, as if by magic, we have a flurry of small buys which sends the price up. Any idea why? Has this been tipped by some hot tipster? Not that I'm complaining.

[alter ego] 19/12/2018 15:42

1tcm1 have you got a problem? Why anyone would take the trouble to post this nasty little attack on someone who provides a great deal of useful information to others is beyond me. You've also done so on more than one board so you clearly have an agenda.

Consider yourself filtered.

[topvest] 17/12/2018 19:53

Lord Gnome. I think that you need to understand that this business segment generates the vast majority of its profits from negative goodwill. Delay a large transaction completing and the profits are gone until next year.