Final results for the year ended 31 December 2013

22 April, 2014

The Board of Randall & Quilter (AIM: RQIH), the specialist non-life insurance investor, service provider and underwriting manager, is pleased to announce the Group’s final results for the year ended 31 December 2013.

Financial Highlights

• Total Group income of £54.2m (2012: £51.8m), an increase of 5%
• Profit before tax of £9.6m* (2012: £11.6m)* ,**
• Return of cash of 5.0p***, through a proposed P and Q share scheme, bringing the total cash distribution to shareholders to 8.4p for the year (2012: 8.4p)
• Undiscounted net tangible asset value per share of 116.4p (2012: 116.7p**)
• Overall tax charge of £2.1m (2012: £0.6m) as a result of a higher share of profits arising in entities without accumulated tax losses compared with the prior year.

* After deduction of Minority Interests relating to Syndicate 3330
** After restatement relating to Alma prior year goodwill adjustment
*** Distribution to be approved in a General Meeting to be held shortly

Divisional Performance

• Insurance Investments Division – A good overall performance resulted in an operating profit of £8.7m* (2012: £11.0m*,**), helped by a strong contribution from legacy acquisition activity, reserve releases in a number of the Group owned insurance companies and Syndicate 3330 and higher than budgeted investment income. Weaker results than expected were produced by the active syndicate participations, primarily due to slow premium development in Syndicate 1991
• Insurance Services Division – An operating profit of £9.8m (2012: £10.1m) arising from a satisfactory core performance, especially in the UK, boosted again by high level of credit write backs, particularly in the USA
• Underwriting Management Division – A much reduced operating loss of £0.2m (2012: loss of £1.5m) as a result of the higher fee income and cost benefits arising from the increased scale of the Lloyd’s managing agency operations following the launch of Syndicate 1991. However, the cost of continued investment in the division’s infrastructure and slower than anticipated progress in securing third party management contracts resulted in a weaker than expected divisional result overall
• An ‘Other Corporate’ operating loss of £2.7m (2012: £2.8m), which includes parent company overheads and the costs associated with the Group’s recent redomicile to Bermuda.

Commenting on the results, Ken Randall, Chairman and Chief Executive Officer of the Group said:

”The Group has delivered a solid result during 2013 which was in line with management expectations despite the impact of slow premium development on its active managed syndicates and a weaker result than originally anticipated in its Underwriting Management Division. As reported at the half year stage, a further profit of £1.5m in respect of Alma Insurance has been reallocated as a prior year adjustment as required by international accounting standards, showing the solid performance in 2013 in a less favourable light.

“We look forward to the future with confidence. Our strong legacy and servicing pipelines continue to offer prospects for profitable development, including in the short term. We have a strong presence in the market for legacy insurance assets although the exact timing of such acquisitions is always difficult to predict. While it has taken longer than planned to build our live underwriting platform, we remain confident that the overall strategy provides a firm foundation for strong, sustainable growth in the future.”

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