More on Brit Insurance Holdings
Brit Insurance Holdings: H1 statement
Brit Insurance Holdings, the UK general insurer, said that its results for the half year to June 2005 will be “materially ahead” of market expectations. The better results are due to favourable trading conditions, a low levels of claims and a good investment performance.
Pre-tax profit for the first half of 2005 are likely to be in the region of £110m. The company reported pre-tax profits of £52.5m for the same period last year. The company also benefited from switching to IFRS (International Financial Reporting Standards) which resulted in favourable exchange rate adjustments.
The company warned that in the second half “it is unlikely that all the positive factors experienced in the first half of the year will be repeated”.
British Insurance Holdings is the second general insurer to indicate a strong first half, driven by low claims and good investment returns. We have noted weaker rate renewal rates stemming from higher levels of competition in the market that dampen the longer term outlook.
The share trades at 87.25p, on a prospective PE (2005 earnings) of 8.5x at the upper end of the sector range. The yield is an attractive 7.8%.
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