Final results for the year ended 31st December 2018

29 April, 2019

The Board of Randall & Quilter Investment Holdings Ltd. (AIM: RQIH), the specialist non-life Legacy insurance investor and capacity provider to US and European MGA business, announces the Group’s final results for the year ended 31 December 2018.

Highlights

• Pre-tax profit from continuing operations up 45% to £14.3m (2017: £9.8m).
• 17% increase in net tangible assets per share to 123.6p (2017: 105.3p).
• Total distributions of 9.2p per share (2017: 8.9p) including a proposed final distribution of 5.6p per share.
• 5.0% return on tangible equity.
• Oversubscribed new share issue in March 2019 of £103.5m (after costs and expenses).
• Issue and public listing of $70m subordinated debt.
• Execution of strategy to simplify the business.
• Successful launch of Program Management in both the USA and Europe with 30 contracts already secured which are expected to generate gross written premiums (“GWP”) of $500m per annum.
• Accredited Europe rated A- (Excellent) and Accredited USA upgraded to A- VIII by A.M. Best.
• Agreed acquisition of Global Re – our largest ever Legacy transaction costing $80.5m and expected to complete in H1 2019.
• Completion of 17 new Legacy acquisitions and reinsurances in the year.
• Strong contribution through commutations and net claims releases from existing Legacy portfolios.
• Excellent pipeline of new business opportunities in both Legacy and Program Management.
• Ideally positioned for Brexit regardless of final outcome.

Commenting on the results for the year, Ken Randall, Group Chairman and CEO said:

“I am pleased to report a 45% increase in the pre-tax profit for continuing operations which was achieved despite the deferral of significant Legacy transactions, now expected to complete in 2019 (including Global Re).

“The current year has begun positively with regulatory approval received for the change of control of Global Re, which will complete in the next few days, and our investment portfolio having fully recovered the unrealised losses experienced in December 2018.

“Accredited, our Program Management business in the USA and Europe is benefitting from A.M. Best rating upgrades and by the end of 2018 had secured contracts with MGAs which are anticipated to generate annualised written premiums of $500m. The strong growth momentum seen throughout 2018 has continued into 2019 although, as previously indicated, there will be a natural time lag before the Group’s results will reflect full credit for earned commissions on the premiums underwritten.

“The upheaval caused by Brexit is also benefitting Accredited Europe which is domiciled in Malta and has regulatory approval to establish a UK branch office. Accredited thus is well placed to provide “Brexit solutions” whatever the final Brexit outcome.

“Our Legacy pipeline remains very active with continuing evidence that insurers are increasingly turning to run off specialists to offload discontinued portfolios of insurance business in order to improve their capital efficiency and reduce costs of managing non-core activities.

“Our ability to grow the business has been significantly enhanced by the issue of $70m subordinated debt in December 2018 and the oversubscribed new equity raise of £103.5m in March 2019”.

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