UK Insurer. Business in Life and General segment with main contributor from Life Insurance.
Good solvency ratio at 194% above target range of 160-180%. Stable balance sheet; upgraded to AA- by S&P. Liquidity measured by centre cash is good which support deleveraging plan.
Cost cutting in progress to reduce operating expenses and full review of group and business strategy in progress. Sold Asian operation which will yield some net returns and further boost the balance sheet strength. Net debt is current 300M vs centre cash of 2.3 B
Consistent dividend payment for last 3 years and is progressing increasing. Current yield is ~7% which is attractive.
Interest coverage is 8x based on operating profit which is healthy and show signs of increasing compared to FY18. Current price is close and slightly lower than NAV of $4.3 pound.
Low risk asset portfolio and well diversified into mainly bond and debt assets. decreasing leverage from 37% in 2016 to 29% currently, reducing interest expenses, driving higher future profit with stable and good ratings from the agency.
Debt maturity is well spaced out with average of 500-800M yearly from 2020 to 2038 onwards. Year 2021 will have 900M maturity and 1.3B maturity in 2022. Total debt on hand is ~7B vs shareholder assets of 92B. Does not appear to be overstretch in terms of leverage.
Majority of business still comes from UK. Probably affected by Brexit.
No comments:
Post a Comment