Post results thoughts6 Sep 2024 16:11
Having read through Adam Winslow's first set of results, the outlook appears very promising in my view. As alluded to previously by Guitarsolo, there has been an element of kitchen sinking early into his tenure. This had to happen though because DLG was in a mess + over-paying its dividend.
The critical thing is that he is laying the foundations for DLG to recover, assuming a fair wind in the insurance world (i.e. no major catastrophes), especially re claims. Sensibly, with the red telephone + nodding dog making DLG and Churchill amongst the most recognisable brands in UK insurance, he is putting the company on the Price Comparison Websites. Whilst these PCW policies will offer far lower profits due to the ridiculous margins / 'commissions charged' by PCWs (they are just glorified insurance agents), PCWs will give DLG the maximum exposure + allow them to pick up lots of the sort of business that they want (i.e. little in pets, travel etc.). In the process, the balance sheet can be re-built.
In the meantime, do not lose sight of 3 things...
First, as Winslow cleans up DLG, the company is as vulnerable as it is going to be to a takeover because he'll have done much of the hard work before the benefits accrue. As the true extent of any turnaround will not show up until 2025 at the earliest, potential bidders could be circling for what remains a decent insurance business, but which has lost its way.
Second, Winslow has brought in two other strong Board members, with insurance backgrounds, and this too lays the foundations for an improvement in fortunes.
Finally, perhaps most importantly, Adam W. will have insurance running through his blood, not just from his days at Generali + Aviva, but also his Dad, Peter Winslow CBE, was CE of BGL, the insurance holding company for comparethemarket.com, Budget (+ previously Beagle). The controlling shareholder of BGL is the South African, Douw Steyn, who is in the Times Rich List. Peter Winslow and family cannot be far off being included in this publication themselves because following the sale of 30% of BGL to the Canadian Pension Plan in 2018, for £600m, his alleged 5% equity stake became worth £100m. Prior to this, the Winslows already owned two houses in Holland Park + Adam himself lives in Hampstead. What helped to make BGL so profitable were those incredibly irritating Russian meerkats promoting comparethemarket.com. However, a little more digging reveals that a top 10 brand in France in recent years, courtesy of the BGL marketing / PR machine, has been a furry ferret. What does DLG already have, to leverage on the marketing side - the red telephone + nodding dog.
In summary, The Winslow family is loaded + so Adam will not have moved to DLG for the money. This will be about putting down his mark in the insurance industry, to match the feats of his Dad. Given time, I would put my money on him doing so + this is why I recently became a shareholder again. The upside could be considerable fo
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