R&Q Group’s final results for 2009 saw a rise in income but reduced profits due to cost of acquisitions and the Equitas settlement. Total group income was up 17 per cent at £26.4 million (2008: £22.5 million) while profit before tax fell to £0.26 million (2008: £8.76 million). Total group net investment income was £11.4 million (2008: £12.0 million) a return of 4.1 per cent.
Chairman and CEO Ken Randall said: ‘The group as a whole delivered a small pre-tax profit of £0.26 million in 2009 and maintained its total dividend for the year at 7.0p per share (equivalent to a yield of 6.5 per cent as at 28 April). This was achieved despite the substantial settlement paid to Equitas, continued volatility in the investment markets and tougher trading conditions in the run-off servicing arena. It is proof therefore of the strength of our diversified business model.
‘During 2009 Randall & Quilter re-emerged as an active acquirer of run-off portfolios and I am pleased to report that the outlook for our investment activities remains encouraging. In particular, we are pursuing a number of attractive opportunities to purchase reinsurance debt and to manage and capitalise specialist Lloyd’s syndicates, including providing RITC for open year syndicates,’ said Randall.
‘As well as increasing the efficiency and marketing of our core run-off service operations to counter competitive pressures, we have firmly established the group in broker run-off and expanded our live market services offering to help drive the service division’s future organic growth. We expect that profitability of the insurance services division will be restored in 2010 and the foundations laid for future growth. We also continue to pursue the purchase of a number of complementary service businesses in the UK, US and beyond.’
Randall added that while the outcome of the dispute with Equitas had been disappointing and made a significant impact on the 2009 results, it had at the same time removed a long standing source of legal and financial uncertainty from the group. Overall, he said, the business remained in good shape and he was ‘very optimistic about the group’s prospects.’