R&q Insurance Share Discussion Threads

[jonwig] 01/6/2020 08:04

Very solid!
Here's a link:



Goodwill on bargain purchase comes in at £71.3m (2018: £6.0m) but profit for year is only £38.8m (2018, £7.8m) so has the program business been a loss?
It looks so, as they talk about its "Economic EBITDA"! However, it's expected to be profitable from this year on.

[rik shaw] 01/6/2020 07:23

Look like solid results

019 Highlights

-- Group
-- Pre-Tax Profit up 180% to GBP40.1 million (2018: GBP14.3 million) (continuing operations)

-- After-Tax Profit up 399% to GBP38.9 million (2018: GBP7.8 million)

-- 13% growth in Net Asset Value per Share (including return to shareholders) (2018: 12%)(1)

-- Net Asset Value per Share of 148.1p (2018: 139.4p)

-- Earnings per Share (basic) up 269% to 21.4p (2018: 5.8p)

-- Bonus shares to be issued of 1 share for every 22 existing shares which brings the total distribution to approximately 9.9p per share (2018: 9.2p)

[speedsgh] 30/4/2020 17:19

New Equity Development flash note released today...

$100m new equity to support expansion -

[speedsgh] 30/4/2020 08:26

Great post, Jon. The ages of Messrs R & Q is something that has not been lost on me, although I have to admit that my holding is substantially smaller than it was 12 months ago after selling down a fair portion in Oct last year as a holding here no longer really fits the remit.

[jonwig] 30/4/2020 07:01

Unlike quite a lot of investors, I rarely get exercised about being excluded from share issues. In this case, it's been made clear that R&Q wants to be able to move quickly when opportunity arises. Similarly Brickell wants to have a substantial stake in R&Q which couldn't be built up by market purchases of existing shares without shifting the price.

I also suspect that in due course R&Q will be absorbed into a US group (Messrs R and Q are not so young).


As for dividends paid in cash or in shares, again I'm ultimately indifferent. Suppose the dividend equates to a proportion p of the company's current value, V. Then the xd value of the company reduces to V*(1 - p); your total value is:

V*(1 - p) + V*p = V.

If the same dividend is paid in new shares, your new value per share is

(1 + p)*V/(1 + p) = V.

(Taxation is the same either way.)

Some investment gurus (eg. Terry Smith) are against the payment of dividends and recommend instead that you just sell some shares if you need cash. I don't go quite that far.

On the final point about share values (post #798) it's true that historically R&Q hasn't been brilliant all the way back to IPO. It had a pretty serious stumble in the US a few years ago and only found its current strategy after that episode. I'd like to think the future is pretty bright, and that this is one company where there's a net positive from the virus.

[red ninja] 29/4/2020 15:11

It's true RQIH has paid good capital returns.

However, against IPO price in 2007 at 125p, the current placing price at 135p hardly shows stellar share price growth.

Last cash placing was at 153p so placing price has gone down since last year.

However, maybe this just reflects the financial crisis due to Covid-19

[jagzoil] 29/4/2020 09:02

I don't think RQIH is a share for you then.

[this_is_me] 29/4/2020 08:29

The main reason that I have made money is buying low and selling high.

Why is it that good management seems to do the opposite? Is it because they are suckered by their 'advisors' in the City?

If everyone gets additional shares it is just the same as a share split rather than a dividend.

[jagzoil] 29/4/2020 08:16

Have you not ever received a high yield dividend? RQIH have paid good divs over the years which has benefited me greatly.

[jonwig] 29/4/2020 08:00

Here's the announcement in full;



More detail on Covid, including:

... we believe the impact of the pandemic on the wider insurance industry will create considerable future opportunity for the Group. Our existing legacy books have limited exposure to unexpired risk, our program management portfolios are largely reinsured with highly rated counterparties, ...

and:

... the Group expects to continue its history of paying a return to shareholders, although this year, in light of the wider macro environment this will be in the form of additional ordinary shares.

[this_is_me] 29/4/2020 07:36

Issuing shares at the current share price, let alone at a discount, is just daft. In any case I always vote against anything involving a placing or the authority to do so since I have never seen one that is to the advantage of current shareholders like myself. Not that one has ever been voted down.

No wonder we read:

"Josh Wander, Founder and Managing Partner at 777 Partners commented:

"We are excited...."

I would be at getting such a good deal.

[jonwig] 24/4/2020 07:15

Yes, the first time they've mentioned covi I think: "Our legacy pipeline across the Group remains strong despite the current turmoil from COVID-19 and we look forward to closing more transactions in the coming months."

Companies in distress are probably a lot more likely to rid themselves of these legacy problems and transfer them at a loss to R&Q.

[this_is_me] 24/4/2020 07:09

Business as usual for RQIH and still doing small buy backs at the current share price.

[red ninja] 09/4/2020 16:26

server trouble duplicate

[red ninja] 09/4/2020 16:25

RQIH is "headquartered and operating in Bermuda with extensive operations in the US and Europe". Thus surely RQIH is not subject to the PRA which is a part of the bank of England.

[rik shaw] 09/4/2020 08:16

Trouble is the PRA used the wording 'distribution' rather than dividend...

[jonwig] 09/4/2020 07:27

No announcement about covid but there's something on the website which says nothing about the impact on their business (thankfully!):



FY results were on 29 April last year. If they are told not to pay a dividend (as per other insurers) their obvious retort will be, "But we don't pay a dividend, sir."

[red ninja] 28/3/2020 12:04

I see the max that RQIH have paid for shares has been 125p (average) on 17/3/20.

I wonder if that is there upper purchase limit, or close to it.

[red ninja] 17/3/2020 11:57

From the interims :-

"Our Program Management Business is growing strongly as we continue to expand our relationships with business producers and mainstream reinsurers and we have good visibility of future commission earnings. The onboarding process for newly agreed programs in Europe is a little slower than we had originally expected, however, the Program segment of our business is expected to move into profit by the middle of 2020 with anticipated strong earnings growth thereafter."

[jonwig] 17/3/2020 07:27

Meanwhile business as usual:



This could be quite large.

[red ninja] 16/3/2020 13:16

Yes, added a few today on that basis.