R&Q profits grow fivefold

Randall & Quilter reported H1 income was up more than 50% with pre-tax profit growing almost fivefold from £1.2m to £5.8m. It promised to return £1.6m to shareholders through a share scheme.

H1 financial highlights (2009 in brackets)

• Total Group £16.1m (£10.6m)
• Profit before tax of £5.8m (£1.2m)
• Return of cash through proposed new B share scheme equivalent to 2.9p per share (2.8p, paid in the form of an interim dividend)
• Net assets of £80.3m (31 Dec 2009: £76.2m*)
• Profits for the Insurance Services division £3.6m (£1.9m)
• Net insurance provisions released £4.8m (£2.7m)
• Total Group net investment income £4.6m (£3.6m)

Ken Randall, chairman and chief executive officer said: "I am delighted that the Group delivered a strong pre-tax profit for the half year of £5.8m. This was in part attributable to a particularly good result from the Insurance Services division that delivered a pre-tax profit of £3.6m.

Syndicate 3330

“As anticipated, the division benefited during the period from significant profit commission earned in respect of the management of syndicate 3330. All operating divisions however performed better or in line with expectations.

“We look forward to the full year results with some confidence. We do not however expect the relatively strong investment performance in the first half to be repeated in the second half, given that interest rates and corporate bond spreads have moved to unexpectedly low levels.

“Any further profit commission in respect of syndicate 3330 in the remainder of the year is also likely to be significantly lower.

Reliable profit stream

“Beyond the current year, weak investment markets look set to continue to impact on the overall Group result but the service businesses are in good shape and these reliable profit streams (unaffected by investment returns) will enable the Group to maintain its stated distribution policy.

“We remain optimistic that the development of our new underwriting management and 'live' servicing operations and our ability to find and execute value enhancing acquisitions will also provide further opportunities for growth in profitability."