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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What’s new: Updates in April and early May reveal:
Group consolidated Funds Under Management “FuM” of US$11.3bn at the end of April 2021 is up 4.0% year to date (Dec20: US$10.9bn).
Strong investment performance across CLIG’s investment strategies, was offset by clients rebalancing, resulting in 3Q net outflow of US$278m.
CLIG continues to maintain an active pipeline across all its major products.
Income net of third-party commissions currently accrues at circa 74 bps (i.e. c. 73 bps
Companies: City of London Investment Group PLC
Forecast beating Final Results
Companies: Palace Capital plc
As midsummer’s day looms (where has this year gone?), there is greater optimism, in general, than may have been anticipated a few months ago. A post-pandemic, ‘vaccine-driven’ recovery demonstrated by increased consumer spending as lockdown measures are lifted has been one of the catalysts. The FTSE 100 has been range-bound in the last month 6,900-7,100. We have seen a combination of broadly positive company results across a range of sectors, further examples of M&A activity and a sequence of ne
Companies: AMYT ARBB ARW BAG BEG BONH BWNG CWK DNK EML EPWN FBD FA/ GPH GSF GNC HUW IGC INSE KAPE KP2 MMAG NRR NESF OTMP ROL RUA SEN SUR TON TOU TXP TGL VLS WINK
Avation is a lessor of 45 aircraft to a diversified airline client base of 19 commercial airlines across 15 countries. This morning, the group has provided a solid trading update to 31 March 2021, which points to a continued focus on managing the collection of customer revenue, with rent collections and overall cashflow having improved since the end of H1 2021. The remarketing of the eight returned ATR aircraft has also continued, while net debt reduced by $51.6m in Q3 FY 2021E to $988.1m, with
Companies: Avation PLC
HgCapital Trust (HGT) posted a strong NAV TR of 8.4% in Q121, driven primarily by double-digit earnings growth across the portfolio (LTM EBITDA for top 20 holdings up 30% y-o-y). After record-high transaction volumes in FY20 (investments at £403m and realisations at £364m), HGT has maintained a high transaction activity to date in 2021 (£147m and £112m, respectively). Its coverage ratio was a healthy 69% at 12 May 2021, supported by tap equity issues, which totalled c £50m to 8 June 2021 (versus
Companies: Hgcapital Trust
Hipgnosis Songs Fund (SONG LN) has today released a trading update and published an unaudited NAV of $1.6829 (122.5p) as at 31 March 2021 vs $1.5114 (116.7p) as at 31 March 2020. This is an increase of 11.3% (in US$ terms – to which the company changed its reporting currency back in October 2020), and a TR of 15.7%, giving a TR of 40.7% since inception in July 2018. The growth in the “Operative NAV” is 9.4% on like-for-like uplift in fair value catalogues which has been driven various factors: t
Companies: Hipgnosis Songs Fund Limited Shs GBP
Liontrust has delivered exceptional growth and there is much to be optimistic about, yet it continues to trade on an unexceptional 14x Mar-22e PER. We are expecting no surprises at Finals later this month after a post-period update in late May and supportive markets since. There is opportunity across the fund range (including the established Sustainable strategy) with continuing growth from flows and performance, and potential in recent acquisitions; set against compelling market dynamics. Liont
Companies: Liontrust Asset Management PLC
Today's news & views, plus announcements from SSPG, PNL, SHED, TUNG, ANX, BLTG, AVAP
Trident reports that Moxico Resources Plc has recently completed a US$73m equity financing. The proceeds will be used to fast-track development of the Mimbula copper mine in Zambia over which Trident holds a royalty. Mimbula is already producing copper and is in the ramp up stage, but the cash injection will allow Moxico to produce cathode copper onsite via the construction of a new SX-EW plant and Moxico anticipates a significant increase in copper production. As a royalty holder, Trident will
Companies: Trident Royalties Plc
OCI hosted its annual Capital Markets (CM) day on 18 May 2021.With presentations from Oakley Capital and investee companies, as well as Q&A, including the OCI board, it gave a clear view of the prospects of the organisation. We have argued in previous notes that OCI’s outperformance (five-year CAGR NAV total return 16%) is driven by i) high-growth companies and sector champions enjoying structural tailwinds and often digital disruption benefits (2020 average 20% EBITDA growth), ii) repeatable an
Companies: Oakley Capital Investments
AVO’s goal is to deliver an affordable and novel PT system, called LIGHT, based on state-of-the-art technology developed originally at the world-renowned CERN. Over the past two years, important technical milestones have significantly derisked the project. Now, AVO is working on the verification and validation phase, prior to LIGHT being used on the first patients to support CE marking. In its recent technical update, the company highlighted progress made over the past three months towards a ful
Companies: AVO ARBB ARIX BBGI CLIG DNL FLTA ICGT OCI PCA PIN RECI STX SPO SCE TRX VTA
Finsbury Growth & Income Trust (FGT) is managed by Nick Train, one of the founding partners of boutique investment firm Lindsell Train. He is optimistic on the current outlook for UK equities, all the more so given several years of relative underperformance; in particular, the manager believes that global investors are underestimating the level of technological innovation within the UK corporate sector. While FGT’s relative performance has lagged that of its peers and the UK market in recent mon
Companies: Finsbury Growth & Income Trust PLC
Urban Logistics REIT (“ULR”) has delivered a watershed year: doubling the portfolio with a disciplined approach focusing on value-add opportunity through reversion and regear. Finals show rental income doubling from acquired assets, with recurring EPS in line with our forecast. EPRA NAV was 6% ahead of N+1Se, as valuation yields tightened. The manager has secured a further c.£150m pipeline of similarly attractive assets. We make a modest upgrade to EPRA NAV on better valuation. We see sustained
Companies: Urban Logistics REIT plc
Trident Royalties Plc (AIM: TRR) has, this morning, noted progress at the Mimbula Copper Project, over which Trident holds a gross revenue royalty (GRR). Mimbula's owner and operator, Moxico Resources Plc, recently completed a US$73million equity financing which will be used to develop and build a standalone SX-EW plant. We have also updated our production assumptions for the Thacker Pass Lithium Royalty based on comments by Lithium Americas Corp. (NYSE/TSX:LAC) in their Q1 2021 results last mon
Belvoir has exchanged contracts to acquire The Nottingham Building Society’s mortgage services business for £0.6m in cash. In isolation this adds c.1% to our EPS forecasts in a full year but we believe it could pave the way for Belvoir to significantly increase its Financial Services sales as it provides direct access to a substantial source of clients with savings and a high likelihood of needing a mortgage for the first time (50,000 18-39 year old Lifetime ISA savers). We will look to reflect
Companies: Belvoir Group PLC