(Alliance News) - Randall & Quilter Investment Holdings Ltd on Wednesday proposed an interim dividend despite a sharp fall in first half pretax profit due to Covid-19.
Randall & Quilter is a Bermuda-based holding company for a group of companies which operate in the non-life run-off insurance sector.
Randall & Quilter's net asset value per share at June 30 increased year-on-year by 3% to 151.5 pence from 147.2p.
The company posted pretax profit for the half ended June 30 of GBP581,000, plummeting from GBP33.1 million a year prior. Goodwill on bargain purchase was down to GBP4.3 million from GBP42.9 million a year before.
Pretax operating profit however increased 30% to GBP10.4 million from GBP8.0 million year-on-year.
The company said its first half results were impacted by Covid-19 due to the a reduction in total investment returns, delays in on-boarding new Program Management business and by a change in the mix of Legacy transactions.
The group saw a return on tangible equity of 23%, up from 16% a year before.
The company said: "Our investment portfolio is comprised almost entirely of high-quality fixed-income investments. Only 3% of our portfolio is invested in below investment grade bonds, and the portfolio has a duration of 1.7 years.
"However, as a consequence of negative market reactions to the economic uncertainty that prevailed during the early months of the pandemic, we recognised GBP7.1 million of net realised and unrealised losses in the first half of this year compared with GBP8.8 million of gains in the first half of 2019. These losses in the first half of 2020 substantially reversed themselves in the second half of the year."
The company declared an interim dividend of 3.8p per share, unchanged on prior year.
Going forward, the company believes it is well positioned to take advantage of opportunities to drive further profitable growth for the group.
Randall & Quilter shares were down 3.9% at 156.99 pence each in London on Wednesday.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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R&Q Insurance (RQIH)