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Q4 surprised us with a very strong 83.1% CR. Price increases over the last two years combined with some favourable tailwinds mean that profitability, especially in Norway, is extremely high at the moment and we have lifted UW results 8%/7% for 2021/2022. EPS comes up 4%/3% as we lower financial returns. For 2023 we expect normalisation of profitability with an 85.5% CR, NOK 9.3 EPS and NOK 8.0 DPS. We stick to Hold but lift our TP to 205 (195).
Companies: Gjensidige Forsikring ASA
GJF reports very strong Q4 with NOK 3.86 EPS vs cons 2.79/ARCe 2.56
UW result 19%/36% ahead of ARCe/Cons driven by Private and Denmark
Proposes NOK 7.4 ordinary DPS (in line) and declares NOK 2.4 XO DPS
Shares to trade up today as both EPS and DPS came in above expectations
GJF will kick off the earnings season in our coverage space on Jan 22nd and we expect a good end to a strong year with a NOK 2.55 EPS. Unlike most of the financial sector GJF has also been given fairly free reign to distribute dividends, and assuming the company sticks to its plan to distribute excess capital we model a NOK 7.5 DPS for 2020 and a NOK 2.0 XO dividend. Our estimates for 21/22 are mostly unchanged and we stick to our Hold recommendation and NOK 195 TP.
GJF delivered another impressive quarter on underwriting as high premium growth, tailwinds on large losses/run-off gains and positive frequency trends combined. We have lifted our estimates on the back of higher expected premiums and lower claims, lifting EPS by 5%/4%/3% for 20/21/22. We also lift our target price to NOK 195 (185) and are very impressed by the performance, but continue to see limited upside potential and stick to our Hold rec.
Q3 EPS NOK 3.1 vs ARCe/Cons 2.8/2.7, ROE 15.3%
Record UW result on high premium growth and improved frequency losses
Benefits from tailwinds on run-off/large losses, but also strong underlying
UW estimates to come up 2-4%, share likely to trade higher today
Our estimates come slightly down due to lower financial returns, but we have lifted Q3 as we expect another strong quarter based on benign frequency trends and robust financial results. We model a Q3 EPS of NOK 2.75. After distributing the 2019 dividend GJF remains well capitalized, but with 2023 soon coming into focus we worry that we’ll see some estimate headwinds as the current run-off guidance only applies through 2022.
BoD decides to pay out NOK 12.25/sh (7.25 ordinary + 5.0 XO dividend)
Follows clarification from MoF last week that opened up for insurers
Equals 6.5% yield on current share price
Positive to see GJF finally being able to distribute excess cash
Expectations were high going into Q2 and GJF delivered with a NOK 3.9 EPS and a record UW result. The main positive surprise was the premium growth, which also lifts our estimates by ~3-4% for Norway while we lower our estimates for Sweden. In sum this lifts our EPS by 2% for 21/22, and we also lift our TP to NOK 185 (180). At P/E ‘21 20.6x we think quality is priced in already here and we thus stick to our Hold recommendation.
GJF reported Q2 CR of 80.1% and EPS of NOK 3.90 (ARCe 4.1, Cons 3.8)
P&L roughly in line with cons., but premiums surprise on the upside
Solvency 283%, ambition still to pay dividend as soon as possible
Solid report, estimates likely to come up 2-4% on higher premiums
We’ve increased our 2020 EPS by ~30% following a strong quarter for financial returns as well as expectations of a strong Q2 on UW (ARCe 80.1% CR). Our estimates for 2021/2022 remain relatively unchanged at NOK 9.0 and 9.1 respectively. We’ve also lowered our 2020 DPS slightly as we await more clarity from regulators, though GJF’s dividend capacity remains extremely strong. We expect a strong Q2, but stick to Hold and NOK 180 target price.
GJF reported a better UW result than expected on the back of strong premium growth. We’ve lifted our EPS estimates for 2021 by 3% as a result, while 2020 comes down 4% due to a weaker financial result than we expected. The withdrawal of the dividend proposal was a bit disappointing, but with a rock solid capital position we see it as a postponement and not a cut. GJF deservedly has a premium valuation, but it leaves limited upside in our view.
UW result 24% above cons, EPS NOK -0.96 vs ARCe/Cons at -0.67/-1.33
’19 dividend withdrawn due to uncertainty and regulatory pressure
Solvency ratio of 269% means dividend capacity remains very strong
Dividend cut a small let down, but market likely to look through for now
GJF has outperformed the market in the recent downturn and is down 4% YTD. Q1 will be an exceptionally weak quarter due to the financial returns, but apart from this we expect very low activity to lead to less claims in big product lines such as motor insurance. Our 2020 EPS comes down 28% while we keep 2021 flat. With a resilient business model, GJF offers a decent save haven now and we upgrade to Hold (Sell) with a NOK 170 (165) 12-month target price.
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Companies: Emmerson Plc
Aviva’s Q1 22 trading update was slightly above our expectations although this remains very much tied to the top-line and profitability could be impacted as of H1. Do the operations really mean that much for the share price with high dividends as a back-up? The latter are expected to continue as the firm has stated that it will release capital above its 180% solvency ratio.
Companies: Aviva plc
Duke has raised £20m in new equity capital, subject to shareholder approval, to fund their continued expansion. The new capital will also support the company's target of increasing their debt facility by a further £25m, and therefore providing a total of £45m of new capital to invest. The increasing scale and diversification of the portfolio is forecast to eventually increase free cash flow per share once full deployment has taken place and will allow Duke to seek a reduction in its debt facilit
Companies: Duke Royalty Limited
Weekly round-up of AIM-listed healthcare news.
Venture Life Group, GENinCode, Kromek, Alliance Pharma, Polarean Imaging, Benchmark Holdings, Ondine Biomedical, Verici Dx, Faron Pharmaceuticals, Avacta Group, Abingdon Health, Open Orphan, Belluscura, Hutchmed (China), Oxford Biodynamics
Companies: ANIC RUA CREO GENI HEIQ IHC IXI IUG OPTI SBTX VAL VLG
*A corporate client of Hybridan LLP
Dish of the day
EnSilica (ENSI.L), has join AIM. EnSilica provides an end-to-end service for the design and supply of mixed signal ASICs, outsourcing certain elements such as the wafer fabrication of the manufacturing and packaging to third parties - otherwise known as a Fabless Semiconductor Model. ASICs are Integrated Circuits or semiconductor chips developed for a particular use or product rather than for general purpose usage. ASICs help
Companies: YGEN AFRN ALBA ART BLV CCS EPWN FIPP NWT KETL
ADF has released its first annual results as a public company and has made quite the entrance with a record set of numbers. FY21A revenues came in at £27.8m, 245% above prior year revenues given FY20A was impacted by lockdowns, and 75% above FY19A revenues. They supported 39 productions, including the latest series of The Crown, Peaky Blinders, and Doctor Strange. We have upgraded our forecasts for FY22E and FY23E on a top-line and bottom-line basis. We believe the company is undervalued on an F
Companies: Facilities by ADF PLC
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Clipper Logistics has left the Main Market following a Cash takeover.
What’s cooking in the IPO kitchen?
According to news reports, The Very Group, is looking to float after calling off their plan for a £4bn IPO last year due to a volatile market. The ecommerce group is owned by the Barclays family. According to the Sunday Times, the retailer has offered incentives to senior leaders at the firm for pulling off a flotation, which the Barclays family now hope to
Companies: AXS AMS EVG FRAN KMK MRL SDX TEK TGP
Companies: BLV POLB RBN
Belvoir has acquired TIME Group Ltd, an appointed representative of Mortgage Advice Bureau (MAB) for an initial £3.7m cash cost. TIME provides mortgage and related financial services and is a good step forward in Belvoir’s growth strategy, within which the potential in Financial Services plays a key part. The initial cost represents 5.8x FY 2021 PBT and we have upgraded our FY 2022E EPS by +3% and 2023E by +7%. In FY 2021, Belvoir’s Financial Services division grew revenue by +44% organically an
Companies: Belvoir Group PLC
Following its 30 April year end, Purplebricks preclose reveals instructions and revenue in 2H have resulted in an £8.8m EBITDA loss for the year.
Companies: Purplebricks Group Plc
ADX Energy (ADX AU)C; Target price of A$0.060 per share: Flow rate at the top end of expectations at important appraisal well - The Anshof-3 well flowed ~75 bbl/d of light oil (and no water) on test from the Eocene reservoir. This has positive implications for production, reserves and the upside case. The flow rate was at the upper end of expectations (40-80 bbl/d). The well has not been acidized yet which could boost production rate b
Companies: TAL SNM XOM XOM TTE SEPL SHEL REP REP PAT OMV OMV HUR FAR ENI ENI EME EDR DELT DEC CEG AKRBP AKERBP ADX CE1 PEN PEN TETY TETY EGY VLE
Companies: Belvoir Group PLC (BLV:LON)Chaarat Gold Holdings Ltd. (CGH:LON)
Delivering outperformance when the macro becomes tough
In our initiation HICL INFRASTRUCTURE: A Public Partner in Private Infrastructures we argued that due to the defensiveness of HICL''s portfolio, the assets'' strong inflation hedge and the ongoing recovery of mobility-related assets and Affinity Water, HICL should fare well in a risk-off market amid rising inflation. HICL''s share price is roughly flat YTD but this compares to -3% for the FTSE all share. The 4% beat for FY22 vs. our NAV p.s
Companies: HICL Infrastructure PLC
Companies: Honeycomb Investment Trust Plc
LSL’s performance in 2022 YTD shows the benefits of its Financial Services growth strategy and significant progress in its Surveying Division. The impact of housing market cycles will have a reducing impact. As previously reported, the split of H1:H2 profit in 2022 will have a more typical profile (i.e. skewed to H2), after a record H1 2021.
Companies: LSL Property Services plc