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Shares jump as Randall & Quilter posts record profits
1st Jun 2020 09:42
(Sharecast News) - Insurance specialist Randall & Quilter reported a record surge in pre-tax profits on Monday, as it insisted it was "well-positioned" to weather the Covid-19 pandemic.
Pre-tax profits in the year to 31 December rose 180% to £40.1m, while net asset value per share, including return to shareholdings, increased 13%. Earnings per share rocked 269% to 21.4p.
The company attributed the record pre-tax profits to continued growth in both its program management and legacy businesses, "as we successfully executed against our strategy and capitalised on the significant opportunities in both segments".
Within legacy, R&Q completed 16 transactions during the period, two of which were the largest in the firm's history. Combined, all the transactions contributed £332.2m of new cash and investments, and £276.2m of additional net reservices.
Within program management, its fee-based recurring commission revenue business, gross premium written surged 147% to $369.3m, allowing the division to report economic earnings before interest, tax, deductibles and amortisation of $1.8m, compared to an economic EBITDA loss of $3.8m a year previously.
Looking ahead, it said: "The future is bright for R&Q: we are a unique global speciality insurance business that is well positioned for further growth and profits. We remain market leaders in both of our businesses, demand for our services is strong and increasing post Covid-19, and there are high barriers to entering our markets."
It conceded Covid-19 had sent "shockwaves" through the insurance market, but added: "We believe our businesses are well positioned to without stand the impact of the pandemic."
R&Q said its legacy books had "only limited" exposure to unexpired risk, the program management portfolios were "largely reinsured with highly-rated counter parties" and its investment portfolio was "conservatively positioned".
As at 1130 BST, shares in R&Q had jumped 13% at 154.88p.
Alan Devlin, analyst at Shore Capital, said: "The company has minimal exposure to Covid-19 but is well-placed to benefit through the fallout from the potential record insurance industry losses in both its business. R&Q has given ambitious but, in our view, achievable targets of increased EBITDA in its program management business to $50m by 2022/23."
Pre-tax profits in the year to 31 December rose 180% to £40.1m, while net asset value per share, including return to shareholdings, increased 13%. Earnings per share rocked 269% to 21.4p.
The company attributed the record pre-tax profits to continued growth in both its program management and legacy businesses, "as we successfully executed against our strategy and capitalised on the significant opportunities in both segments".
Within legacy, R&Q completed 16 transactions during the period, two of which were the largest in the firm's history. Combined, all the transactions contributed £332.2m of new cash and investments, and £276.2m of additional net reservices.
Within program management, its fee-based recurring commission revenue business, gross premium written surged 147% to $369.3m, allowing the division to report economic earnings before interest, tax, deductibles and amortisation of $1.8m, compared to an economic EBITDA loss of $3.8m a year previously.
Looking ahead, it said: "The future is bright for R&Q: we are a unique global speciality insurance business that is well positioned for further growth and profits. We remain market leaders in both of our businesses, demand for our services is strong and increasing post Covid-19, and there are high barriers to entering our markets."
It conceded Covid-19 had sent "shockwaves" through the insurance market, but added: "We believe our businesses are well positioned to without stand the impact of the pandemic."
R&Q said its legacy books had "only limited" exposure to unexpired risk, the program management portfolios were "largely reinsured with highly-rated counter parties" and its investment portfolio was "conservatively positioned".
As at 1130 BST, shares in R&Q had jumped 13% at 154.88p.
Alan Devlin, analyst at Shore Capital, said: "The company has minimal exposure to Covid-19 but is well-placed to benefit through the fallout from the potential record insurance industry losses in both its business. R&Q has given ambitious but, in our view, achievable targets of increased EBITDA in its program management business to $50m by 2022/23."