RE: Interesting to see27 Jul 2020 15:09
Think DLG's UL business hasn't shined brightly for a few years and so it was mostly held by income trusts/funds for the dividend. When that dividend was then suspended the share price fell and is yet to recover to where it was prior to COVID.
This was not helped by the fact that the messaging from the BOD in the RNSs have all been based on worst case scenarios, giving no reason for taking a quick glance at this any reason to think it'll do well.
However, as per my previous posts, the market are in for a surprise on Tuesday because:
1) They only suspended the dividend due to pressure from the regulators, not out of necessity.
2) DLG are primarily a motor insurer, and therefore will have benefited massively from coronavirus, as premiums stayed roughly the same whilst losses must be far far less than usual. Even now but especially during the lockdown.
3) I'd be surprised if the Travel losses are half as significant as they were first expecting because the purchased reinsurance to cover them for the near-enough the first £20m of losses. [and they have no Business Interruption insurance exposure which will inflict massive losses on many other insurance companies (Hiscox, RSA, Eccles, etc) if the FCA case doesn't go their way.] I believe they've overstated the travel losses 2 fold at the minimum.
All of which points to the dividend being reinstated, and - in line with their dividend policy - a special dividend seems almost certain. It's either that or a big share buyback scheme. Either way it's going to be great news.
Have consequently purchased ~600 more shares today.
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