13th Nov 2014 08:36
LONDON (Alliance News) - Randall & Quilter Investment Holdings Ltd shares dropped heavily in early trade on Thursday, after the company said it expects its pretax profit for the year to be materially lower than market expectations.
The company blamed a likely increase in net provisions to cover asbestos-related claims for its R&Q US Re reinsurance business, disappointing recent trading in its US insurance services arm, and lower than expected investment income owing to weak financial market conditions in recent months.
Shares in the company dropped 20% to 114.24 pence in early trading, making it one of the worst performers in the AIM All-Share index.
The company had noted the deterioration in net provisions for asbestos-related claims in the R&Q Re US business in its interim results, but said the volume is now above what the group had anticipated at the time.
The US insurance services arm has been hit by a recent lack of success in winning large anticipated service contracts and it said the fall in investment income was down to the widening of credit spreads in recent weeks.
It said it has signed two European portfolio transfer agreements and a deal to buy two Bermuda-based captives in recent weeks and said its UK insurance services operations have traded ahead of expectations.
It said its outlook for 2015 was encouraging, with a strong pipeline of legacy acquisition opportunities and recent new business wins in its underwriting management and UK insurance services set to boost results.
By Sam Unsted; [email protected]; @SamUAtAlliance
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