Sector movers: Amlin encounters profit taking
The non-life insurance stocks are seeing a spot of profit-taking this morning, perhaps inspired by Beazley director Johnny Rowell, who shipped out £2.8m worth of shares in the company yesterday after the group reported record profits on Tuesday.
Amlin is the sector's major casualty after its results yesterday. Perfect conditions in the underwriting market enable the Lloyds insurer to rack up bumper profits in 2007 even though premiums fell slightly.
Profits in the year to December jumped by 30% to £445m, buoyed by an underwriting contribution of £355m, up from £268m, and a combined ratio, the measure of underwriting profitability, at a record 63% - anything below 100% indicates an underwriting profit. Investment returns increased by 36.4% to £157m.
Gross premiums for the year fell from £1.113bn to £1.044bn with net earned premiums down slightly from £974m to £972m.
'These results are exceptional and reflect a combination of strong pricing conditions, low catastrophe claims and good investment returns," chief executive Charles Phillips said, though he added that underwriting returns may have peaked in the short term.
Even so, he expects Amlin will continue to deliver "more than acceptable returns for shareholders and our strong balance sheet supports a growing dividend going forward."
Paper group Mondi edges higher today after its decent results yesterday got lost in the welter of major company announcements.
Profits for the year surged by 71% as it raised margins due to improved efficiencies across the business and increased prices.
Pre-tax profit surged to €382m from €223m before on revenue that increased 9% to €6.2bn.
Operating margins were 8.0% against 6.6% the prior year as a result of improved pricing environment and benefits of operational efficiencies, in particular €167m of cost-savings.
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The group said it improved performances across all business areas as increased pricing, focus on operational efficiency and the benefits of restructuring actions all contributed to the financial outcome.
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