Hiscox unveils capital return plans

25th Feb 2014 10:44

Hiscox, the FTSE 250 insurance group, has announced plans to return capital to its shareholders by way of a special distribution of 36p a share along with 14p a share instead of a final dividend. Altogether the company will return around £128m. As part of the capital return the group plans to undertake a share consolidation, under which shareholders would receive 89 new shares for every 100 existing shares.Hiscox said it had reviewed its upcoming capital requirements and made the decision based partly on the current rating environment and potential future growth opportunities. "Following the distribution, the group's capital levels will be similar to those of the opening balance sheet, post the 2013 capital return, which will have a favourable impact on both the group premium to capital gearing ratio and return on capital, whilst still providing sufficient headroom above existing internal and external capital constraints," the company explained. Hiscox said that while this would be the second year in a row it has made such a return, it is not expected this will become the norm. Both the return of capital and the share capital consolidation require the approval of shareholders, with a meeting due to be held on March 18th. Hiscox shares were down 0.99% at 647.50p at 11:02 Tuesday. NR