esure Group plc (LON:ESUR) today announced interim results for the six months ended 30 June 2018 and proposed acquisition by a subsidiary of funds managed by Bain Capital Private Equity LLP
Headline results
· Gross written premiums up 12.0% to £440.3m (1H 2017: £393.3m)
· In-force policies up 8.5% to 2.449 million (1H 2017: 2.258 million)
· Profit before tax of £36.1m (1H 2017: £45.1m) includes an impact of £14m from adverse weather related claims costs in the Home and Motor accounts; excluding these costs profit before tax is £50.1m (1H 2017: £45.1m)
· Solvency coverage(1) of 154% (1H 2017: 157%)
Proposed Acquisition
· The Board is pleased to have reached agreement with Blue (BC) Bidco Limited, a wholly owned subsidiary of funds managed by Bain Capital Private Equity (Europe) LLP on the terms of a recommended all cash offer for the entire issued and to be issued ordinary share capital of esure Group plc by Bidco.
· Consequently, Bidco has today announced its firm intention to make an offer for esure under Rule 2.7 of the Takeover Code. A copy of the Bidco announcement is available on the esure website at www.esuregroup.com
· Under the terms of the Proposed Acquisition, each esure shareholder will be entitled to receive 280p in cash for each esure share held, representing a premium of approximately 37 per cent. to the closing price per esure Share of 204 pence on 10 August 2018 (being the last business day prior to the possible offer announcement released by esure on 13 August 2018)
· In light of the Proposed Acquisition, the Board is not recommending the payment of an interim dividend (1H 2017: 4.1 pence per share)
Sir Peter Wood, Chairman, said: “The first half of 2018 demonstrates that esure continues to deliver profitable growth and it is pleasing to see that we have grown our market share in motor during this period.
“Alongside these results, I’m pleased to be announcing the Proposed Acquisition today, because it is a great outcome for shareholders, for the company, and for customers. Since its IPO in 2013, esure has grown to nearly 2.5 million in-force policies, delivered more than £800 million of annual gross written premiums, and returned just under £300 million to shareholders in dividends as well as the considerable value delivered to shareholders through the demerger of GoCompare.”
Darren Ogden, Interim Chief Executive Officer, said: “The first half of 2018 has seen continued growth in premiums and polices in a period impacted by exceptional weather costs.
“The Motor account grew strongly, underpinned by the Group’s footprint expansion programmes which now account for over 400,000 in-force policies. In addition, the Home account returned to growth in the month of June, aided by the Group’s investment in its underwriting and data capability. The Group will remain disciplined in its rating actions as it targets 3 million in-force policies by 2020.
“The UK suffered a number of adverse weather events in the first half of 2018 and these contributed to exceptional costs of £14m in the Home and Motor accounts. I would like to thank colleagues for their hard work and dedication in supporting our customers during these difficult times.
“The Group remains well placed to continue delivering profitable growth in 2018.”
