Heritage Final Results - 11.3.08
Heritage released its final results today, which are available here
KEY POINTS
- Profit before tax £23.3m (2006: £10.3m) up 126% on last year;
- Gross premium income up 58% to £175.3m (2006: £110.9m);
- Return on equity 26% (2006: 25%);
- Earnings per ordinary share on a fully diluted basis are 21.8p (2006:16.9p);
- Combined ratio 90% (2006: 90%);
- Claims ratio 52% (2006: 53%);
- 25% growth in HUA ownership of managed capacity for 2008 to £174m (54% of overall capacity);
- Progressive dividend policy confirmed for 2008 and beyond;
- Price reductions in some classes, although confident that selective underwriting by our experienced team will yield economic returns.
Richard Pexton, Chief Executive commented:
"As our results show, Heritage has enjoyed an excellent year. Our underwriting teams have made outstanding progress, enhanced by new classes of business in line with our strategy of measured diversification. Market conditions were excellent, although the second half of the year saw increased competition and rate reductions are being seen. We are holding firm on our core value of not sacrificing profit for volume.
A strategic review identified International Property Treaty and Non US General Liability as classes that would significantly enhance and compliment the stability and long term profitability of the underwriting portfolio. I am delighted to report that in late 2007 we recruited high calibre underwriters with considerable experience in each of these classes."
Takeover
Heritage went into an offer period on 06 December 2007 following an approach by Ironshore Inc. The Company is in discussions with potential suitors although there can be no certainty that an offer will be made for the Company. The Company has a bright future, whether as part of a large organisation or as an independent listed vehicle.
Results and Open Year Estimates
2005 Account
Syndicate 1200 0.4%
Syndicate 3245 13.1%
2006 Account
Syndicate 1200 17.5% to 22.5% An early release is being made of 3.65%
Syndicate 3245 12.5% to 17.5% An early release is being made of 4.04%
2007 Account
Syndicate 1200 12.5% to 17.5% An early release is being made of 2.25%
Syndicate 3245 7.5% to 12.5%
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