The company will also receive 4.25% of Gibson Li’s reserve annual recurring fees and potential performance fees for at least six years, transforming the legacy insurance division into a primarily recurring fee-based business.
According to R & Q, assuming Gibson Re’s capital is about $ 140 million, the execution rate group fee income exceeds $ 140 million and the group’s pre-tax operating profit is 9 It is expected to exceed $ 10 million (about £ 60 million). By 2023, $ 300 million will be fully utilized.
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William Spiegel, executive chairman of the company, said: “This change reduces our reliance on capital markets to support growth.”
“The launch of Gibson Re simplifies our legacy insurance revenue model from rugged underwriting and seasonality to predictable, high-quality recurring commission income,” he added. “The key is to reduce the capital intensity of legacy insurance to free up capital, support previously announced progressive dividend policies, and reduce reliance on the stock market for additional financing.”
On the financial side, the company’s program management continued to grow strongly for the six months to June 30, with total premiums (GWP) reaching $ 890 million and annual membership revenue. Reached $ 50 million (about £ 36.1 million). ), Increases by 80% and 135% respectively.
During the period, pre-tax operating profit also surged from 1100% to $ 20 million on an annual basis, and the pre-tax operating margin increased from 7.5% to 40%. As a result of these positive results, R & Q has raised its program management GWP target for 2023 from $ 1.5 billion to $ 1.75 billion.
Meanwhile, the company’s legacy insurance line completed eight transactions in the first half of 2021. Of the company’s legacy insurance pipeline, which has over $ 1 billion in reserves, traditionally about 70% of transactions were completed in the second half of the year. fiscal year.
R & Q also confirmed that it will pay an interim dividend of 2.0p per share on October 12, 2021. Dividends will be paid to registered shareholders on September 24, 2021 and the corresponding ex-dividend date will be September 23, 2021.
Spiegel said he intends to increase the total annual dividend from 4p per share in 2020 in line with the progressive dividend policy.
“Given that the projected operating profit before tax for fiscal year 2021 will be affected by the transition to ordinary fee income, the dividend payment rate will be 25% to 50% of the Company, covered by the surplus capital generated by the establishment. It could go far beyond the scope of Gibson Re, “he said.