24 May, 2021
Randall & Quilter Investment Holdings Ltd. (AIM-RQIH), the leading non-life global specialty insurance company focusing on the Program Management and Legacy Insurance businesses, today announces its results for the year ended 31 December 2020.
Record Pre-Tax Operating Profit driven by Strong Operating Results Across Business Segments
Accelerated Growth for the Group
Breakthrough Year for Program Management
Record Year for Legacy Insurance
Capital and Dividend
Franchise and Platform
Q1 2021 Update
Commenting on the results for the year, Executive Chairman William Spiegel, said:
“2020 was a challenging year and the pandemic tested the resilience of our employees and our business model. Our team responded with agility and confidence in a dynamic market environment and this was demonstrated by our record 2020 operating results.
“Since joining R&Q, I have experienced first hand the esprit de corps that exists between our employees based across our eight global offices. All our employees contribute to the entrepreneurial and pioneering spirit that R&Q is known for and which we demonstrated once again last year. What our 2020 results demonstrate is that the difficulties of last year – not least the “work from home” phenomenon – did not hamper our ability to deliver on behalf of our clients and ultimately our shareholders.
“I believe 2020 at R&Q can best be described as a year of accelerated growth. Our Legacy Insurance business reported its strongest year ever and our Program Management business, after just four years, became profitable. With both of our businesses profitable, we now have the foundation to continue accelerating our growth and delivering sustainable earnings in the years to come. We also added a complementary business to Program Management when we made a 35% investment in Tradesman Program Managers, one of our core MGA program management partners. This investment increases our exposure to fee-related profits and we anticipate exploring further opportunities to emulate this approach with other MGAs to whom we provide program management services.
“Very early in 2020 it was clear to us that the pandemic would result in significant structural changes to our markets, and that this would create highly attractive and accretive opportunities for R&Q. In order to execute on these, we raised £173 million ($225 million) of new capital, which we were able to deploy effectively in both the legacy and program markets.
We remain in the enviable position of competing in growing markets that offer us the opportunity to reinvest our capital at high rates of return, creating long term shareholder value. With significant growth opportunities in front of us, our business will continue to consume capital over the near term, particularly our Legacy Insurance business. Over time, however, we expect our Program Management business to create enough free cash flow to make us capital self-sufficient.
“While we are in growth mode and remain capital consumptive, we are adopting a progressive cash dividend policy with a payout ratio of between 25% and 50% of our Pre-Tax Operating Profit, the best proxy for cash earnings. While the precise payout percentage may vary year on year, we intend to grow the total amount of the annual cash dividend from the FY 2020 level of 4 pence per share. This dividend policy will allow us the flexibility to carefully balance the allocation of our capital between reinvesting in profitable opportunities, providing an attractive and growing dividend to our shareholders and minimising the need to raise external capital.
“2020 was a year like no other we have witnessed in our lifetime and it continues into 2021. Yet, despite all this turmoil, it was a very strong year for R&Q. I would like to personally thank Ken Randall and Alan Quilter, the two founders of R&Q, for having confidence in me and guiding and mentoring me over the past 17 months. I also want to thank all our stakeholders for their unwavering support during these unprecedented times: our shareholders, our customers, our regulators, our rating agencies, our board and most importantly our loyal and dedicated employees. I am so proud of what we achieved in 2020 under trying conditions. I cannot wait to see what we can accomplish over the next few years as the world returns to a more normal state.”
Our shareholders presentation is available here.
As part of its commitment to open communication with all of its shareholder base, R&Q will also provide a live presentation and Q&A via the Investor Meet Company platform at 3pm on 24 May 2021. Registration details can be accessed via:
Questions can be submitted pre-event via the IMC dashboard or at any time during the live presentation via the ‘Ask a Question’ function.
Click here for the full press release.
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