6th Sep 2019 09:42
(Alliance News) - Randall & Quilter Investment Holdings Ltd on Friday said profit quadruped in the first half of 2019 due to the acquisition of Global US Holdings Inc.
Shares in Randall & Quilter were up 9.0% at 169.99 pence in London in morning trade.
The non-life legacy insurance investor posted a GBP33.1 million pretax profit for the six months ended June 30, more than four times its GBP7.8 million profit the year before.
This was "as expected", according to Randall & Quilter, thanks to its USD80.5 million acquisition of Global US and subsidiary Global Reinsurance Corp of America. The firm recorded goodwill on bargain purchase totalling GBP42.9 million, up from only GBP1.2 million - of which GBP40.6 million was from Global Reinsurance.
The company said that the retroactive reinsurance of Schools Association for Excess Risk also helped profit, which was further boosted by "substantially increased investment earnings" on its insurance float.
Investment income rose to GBP16.0 million, many times the GBP2.6 million figure the year before.
Gross premiums written increased 43% to GBP226.1 million from GBP157.6 million, although reinsurers' share of gross premiums rose to GBP138.3 million from GBP112.4 million so that premiums written, net of reinsurance, fell 22% to GBP87.8 million from GBP112.4 million.
Earned premiums net of reinsurance fell 20% to GBP90.8 million from GBP113.5 million.
Randall & Quilter proposed an interim distribution per share of 3.8p, up 5.6% from 3.6p.
Executive Chair Ken Randall said: "The business continues to perform well with an excellent pipeline of new opportunities in both Legacy and Program Management. The board expects that full year results for 2019 will be in line with market expectations and we remain very positive about our medium and long term prospects, which will benefit from the emerging profits from our fast growing Program Management business.
"Whilst the final outcome of Brexit remains unclear, we believe the preparation and plans we have put in place will enable the group's European business to continue without material interruption in all likely scenarios, including a 'no deal' Brexit. Our large concentration of US dollar revenues and net assets provides a good measure of protection in the event of ongoing sterling weakness."
Randall & Quilter also announced the departure of Non-Executive Director Michael Smith, and said it "is giving active consideration to the addition of a further non-executive director". Smith has retired as chair of the firm's remuneration & nominations committee and of its reinsurance asset committee. Smith has also ceased to be the company's senior independent director.
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