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Innovation Group, a global provider of business process services and software solutions to the insurance and property industries has announced the re-signing of a contract in South Africa with the insurer of one of South Africa's top four banks. Innovation Group said that the contract had been re-signed to conform with newly implemented Binder Regulations for the insurance industry in South Africa. The original contract was signed and announced in April 2010 with an expected value of £25m over a five year period. The company said that due to market volume improvements and significant growth in penetration of products co-developed with this client the new forecast for the contract was £37m. The contract is expected to continue to run until 2015 with expected revenues of approximately £8.5m for this financial year escalating to £10m per annum over the next two years, the company added.

the 2014 P/E of 13.4x does not look at all demanding. While a c 10% premium to the average of an albeit imperfect peer group of UK hardware and international storage companies, we feel this is easily justified given the robust cash generation, scope for upside and continued strong earnings growth beyond our forecast period.

Our estimate changes are detailed overleaf. On marginal top line upgrades our 2013 PBT and EPS are increased by 10% with the respective 2014 figures moving up by 11%. Our 2014 forecasts assume 7% growth, but as discussed above, successful penetration of the SATA storage market could drive operationally geared upside in the 2014/15 timescale.

No operational update was given, but to recap, continued delivery to plan should improve the prospect of an upward inflection in growth and margins. The company’s storage business, where the commercialisation of SATA controller chips substantially expands CML’s addressable market, provides the most significant growth opportunity. In wireless, customer launches of products using CML’s chipset solutions, where CML provides modem, RF and sometimes voice coding chips (expanding revenue per device by 2-2.5x) should support a mid- to high-digit growth trajectory. The recent establishment of a Sheffield-based RF and mixed-signal design team, with expertise in wideband RF (to complement the company’s existing narrowband core competence) is a longer-term investment, but should open up a broader range of niche radio markets on a three- to four-year timescale.

Full-year sales are expected to be just over £25m (up c 7.2% y-o-y) and versus our £24.9m estimate. Profit before tax at “circa £5m” is around 10% ahead of our old £4.6m estimate, which we believe is likely to be largely due to strong cost control. Year-end net cash at £8.9m is substantially ahead of our £6.6m estimate.

You in here yet mate........

http://www.investegate.co.uk/camco-clean-energy--cce-/rns/disposal-of-interest-in-camco-south-east-asia/201305070700110472E/

Positive Points: "An encouraging start to the year" was reported. Premium growth of 7% was reported, up from 5% in the last full year. RSA saw continued growth in premiums as it continued to expand business in the likes of the Emerging Markets and Canada. Ten years ago, RSA operated in around 50 countries. Since then, the group's focus has narrowed and RSA now operates a well diversified portfolio in 31 countries. RSA still benefits from a wide geographic footprint that offers exposure to an array of insurance markets around the world. The group's balance sheet was previously reported as strong. Its Insurance Group Directive (IGD) surplus rose to £1.3 billion, up from the £1.2 billion reported at the 2012 full year results. M&A has been a key part of the group's growth. The integration of recent acquisitions in Canada and Argentina were previously reported as being completed. The insurer previously noted that its "decision to rebase the dividend will enable it to invest in opportunities it sees for growth and is in the best interests of its shareholders.

Negative Points: RSA previously cut its final dividend by 33%. It expects a similar reduction in percentage terms for its 2013 payment. Investment income fell 11% to £515 million during the 2012 full year. The group cited low returns currently offered by bond investments. In Q1 2013, Scandinavian premiums proved to be flat. Competition within the group's core UK home market remains intense. A highly competitive market in recent years saw many players slash rates to maintain market share, which the industry claims led to unsustainably low rates that are now rising to more normal levels. The insurance industry is vulnerable to risks arising from exposure to bond markets, movements in interest rates, along with foreign currency exchange rate fluctuation. RSA has ongoing exposure to potential weather and catastrophe losses

Financial Highlights: Premium growth of 7% reported. RSA previously reduced its final dividend payout for 2012 to 3.9p per share, down from 5.82p in 2011, citing low returns on its investments, due to weak bond yields. It expects a similar reduction in percentage terms for its 2013 payment.

First quarter update: The CEO flagged "an encouraging start to the year, with reported premium growth of 7%." The growth in net written premiums had reflected good customer retention together with continued robust rating action. Growth was led by Canada, which had benefited from the 2012 acquisition of L'Union Canadienne, but had also delivered strong organic growth (+7%). Emerging Markets grew by 16% benefitting from acquisitions in Argentina in 2012 and good performances across Asia, Central and Eastern Europe and the Middle East. Scandinavian premiums were flat while the UK & Western Europe grew 1% as the company continued to focus on improving performance in the UK and in Italy. As for the outlook, the CEO noted that "I remain confident in our ability to achieve our targets for 2013" In all, and following a significant cut to its 2012 dividend payment,

Operating profit from ongoing operations rose by 32.9% to £107.5 million compared to Q1 2012. Group actions relating to a targeted £100 million gross annual cost savings in 2014 remained on track. The insurer achieved a successful separation from RBS Group and subsequent IPO of Direct Line Insurance Group on the stock market in early October. In March 2013, RBS Group placed a second tranche of 251.4 million ordinary shares in Direct Line Group with institutional investors. Following the placing, RBS Group's shareholding in Direct Line Group fell to 48.5%. The International division grew its in-force policies to over 1 million in Italy and over 0.5 million in Germany during the period. The Group remains cautious in Italy given the uncertain regulatory backdrop and tough economic environment; however this environment continues to result in reducing claims frequency. Market conditions in Germany are improving and the group has taken advantage of this to grow in the 1 January renewal season, when the majority of German motor policies incept. Over the last 18 months, a number of regulatory reviews and initiatives have been announced by the UK Government, the Ministry of Justice ("MoJ") and the Competition Commission in relation to the motor insurance industry. DirectLine is engaged with major stakeholders and continues to support the introduction of a coherent set of reforms. The group adopts a conservative investment strategy with a mix of cash, government bonds, and corporate debt. As a key part of their business, insurance companies invest the premiums they receive, and investment returns contribute to profit. The insurer benefits from market leading brands and multi-channel distribution. Through its stable of household brands - Direct Line, Churchill, Green Flag, Privilege and NIG - the company provides insurance covering homes, cars, pets, travel and small businesses.

Negative Points: Direct Line operates in a highly competitive insurance environment. UK personal lines markets are expected to remain competitive through the course of 2013, particularly in motor. Over 40% of premiums come from motor insurance. Regulators are investigating the motor insurance market after a probe by consumer watchdogs concluded that ineffective competition was inflating drivers' insurance costs. The group highlighted that together with other industry participants, it has submitted its responses to the Competition Commission's review of practices. Provisional findings from the investigation are currently due to be published in September 2013. Profits will suffer if claims are higher than expected. Over 85% of Direct Line's Gross Written Premium comes from the UK so its fortunes are closely tied to those of the British economy. Insurance is a risk business and as such it is exposed to factors outside its control such as the weather. The group is exposed to underwriting and pricing risk. As a key part of their business, insurance companies invest the premiums they receive, and investment returns contribute to profit. Whilst we believe the group has a conservative investment strategy any investment losses would reduce profits. All investments can fall in value as well as rise, and any losses would reduce profits. A large shift in the bond market prompted by an increase in central bank interest rates, for example, would affect the value of these investments.

Financial highlights: Operating profit from ongoing operations of £107.5 million, up 32.9% on Q1 2012 Gross written premium for ongoing operations fell by 4.5%

First quarter update: The statement disappointed investors, with the share price down by over 1.5% in early trading. While operating profits from ongoing operations rose (+32.9%), a fall in gross written premiums, a result of competitive market conditions, failed to inspire. Accompanying management outlook comments noted that "the UK personal lines markets are expected to remain competitive through the course of 2013, particularly in motor. In this environment the group will continue to target underwriting profitability, even if this is at the expense of volume." Nonetheless, actions relating to a targeted £100 million gross annual cost savings in 2014 remained on track, whilst good growth in the International division, particularly Germany, was highlighted

JRIC is not just about property valuation gains, and potential re-rating and takeover. As an income play, its hearty dividend yield is fully covered and a loan-to-value ratio of 43 per cent is comfortable. And, the yen-sterling exchange rate permitting, the dividend should rise when the rental market turns......

Rents in Japan seem to be bottoming out. The Japanese population is shrinking, yet migration to the big cities and the trend towards smaller households has been exerting pressure on the housing stock in Tokyo, Osaka and Nagoya, which together account for some 87 per cent of JRIC's portfolio. The company's rents fell 0.7 per cent on average for the year to 30 November. Yet that was an improvement on the previous year, when rents fell 1.1 per cent, and falling vacancy rates - down 0.3 percentage points to 4.8 per cent in November - should also support the market. Besides, rental deflation is being offset by an improving investment market. JRIC's portfolio was actually marked up 2.6 per cent last year. The onslaught of quantitative easing is only likely to consolidate investors' interest in real estate. JRIC sold a 14-unit apartment block last month at a 21.5 per cent premium over the year-end valuation. The price gave the buyer a net rental yield of 4.3 per cent, whereas JRIC's portfolio is on average valued at a yield of 5.8 per cent. A potential fly in the ointment is currency risk, as JRIC does not hedge and Mr Abe is committed to devaluing the yen. Last year JRIC's 6p currency loss more than offset a 4p leveraged rise in property prices. While sterling's own weakness offers some protection for UK investors, the currency headwind may well persist.,,,,,,,,,

Japanese real-estate investment trusts (J-Reits) have enjoyed an exceptionally strong start to the year, with the J-Reit index boasting a 45 per cent gain to date aided by a Bank of Japan policy to buy their shares as part of its economic stimulus package. And while shares in Aim-traded Japan Residential Investment Company (JRIC) have benefited a bit, rising 20 per cent in 2013, they have missed out on much of the gain, leaving them looking substantially undervalued compared with Japanese rivals. Indeed, JRIC's largest J-Reit peer, Advance Residence, looks typical of the sector, trading at a 47 per cent premium to book value with a dividend yield of 3.9 per cent. Were JRIC priced at such a multiple, its shares would gain nearly 50 per cent. This highlights its clear attractions as a bid target for J-Reits. Last year the company decided not to pursue various "unsolicited approaches" for its portfolio. Yet it would surely relent at the right price, not least because it faces a continuation vote this autumn. As well as the valuation anomaly, JRIC offers a compelling investment case based on its underlying property portfolio. There have been so many false dawns over the deflationary Japanese economy that UK investors can be forgiven for ignoring the latest glimmers of light. Yet prime minister Shinzo Abe's economic stimulus looks far more radical than its predecessors and one sector likely to benefit is real estat

Standard Life has a strong pipeline of new business generated by pension auto-enrolment, while its business model is far less affected by RDR than its rivals. And, despite the solid growth momentum, helped by rising fee income from strong fund inflows, the shares are not expensive relative to key rivals. Throw in a decent dividend payout and the prospect of more special dividends, and the shares look too cheap. .......but as always dyor good luck

However, the biggest non-UK operation is Canada, where operating profits last year rose by 90 per cent to £355m. Much of this was achieved thanks to a positive investment performance, but fee-based revenue also rose 4 per cent to £172m as a result of a 7 per cent rise in assets under management to £27.8bn. But these improvements only came after new management and a revised product offering turned around the 33 per cent drop in new business sales in the first quarter of 2012, and margins are still lower than elsewhere in the business. Valuing a life assurer is fiendishly complicated, but one of the conventional metrics is the relationship between the share price and the embedded value, which is a measure of the group's potential profits, taking into account an element of as yet unearned premium income on policies already in place. On this score, shares in Standard Life are pretty much trading on an historic premium that's much in line with rivals such as Prudential. However, looking at broker Investec's forecast EV for 2013, shares in Standard Life look cheap, trading at just a 4 per cent premium compared with Prudential's forecast 20 per cent premium. Group finances are in pretty good shape, too, and the surplus of funds held over and above the minimum standard set out in the Insurance Group Directive (IGD) moved up from £3.1bn in the first quarter of last year to £4.2bn. And, in the light of last year's solid cash flow, management announced a special 12.8p-a-share dividend - the shares are already ex-dividend for this payment. The dividend forecast for the current year translates into a yield of 4 per cent, rising to 4.2 per cent or 8.6 per cent, including another special dividend forecast for 2014.