telegraph share tip5 Jan 2014 18:43
James Quinn, Financial Editor
RSA GROUP
To say RSA Group hasn’t had the best of finishes to the year would be an understatement.
In the past month, the FTSE 100 insurer has issued its third profit warning in quick succession, parted company with its chief executive and seen its credit rating downgraded by S&P.
On top of that it has faced calls from investors to put itself up for sale, while the executive chairman, Martin Scicluna, works out which parts of the businesses to sell in order to generate in the region of £500m of capital.
So why then are the shares worth looking at? Well, it’s a risk, perhaps a big risk, but if Scicluna does what he says he will do, and makes capital his number one priority, by the end of 2014, RSA will begin to look very different.
Leaner, more agile, and with a more manageable cost structure, investors should begin to fall in love with it again. Clearly, it will take some time – if ever – before RSA goes back to being the dividend heavyweight it once was, but for investors looking for share price growth, RSA could be a risky, but potentially lucrative, choice.