Proposed Return of Value to Shareholders

RNS Number : 6764E

Randall & Quilter Inv Hldgs PLC

11 April 2011

 



Date:	11 April 2011
On behalf of:	Randall & Quilter Investment Holdings plc
For immediate release

Randall & Quilter Investment Holdings plc

Proposed Return of Value to Shareholders

of

4.45 pence per Existing Ordinary Share

Randall & Quilter Investment Holdings plc ("Randall & Quilter" or the "Company") today announces that it proposes to return 4.45 pence per Existing Ordinary Share to Shareholders.

Return of Value

In addition to generating cash profits from the Group's Insurance Services and Captives divisions, the Company aims to make capital extractions from its insurance investments by managing down the liabilities of its insurance company portfolio and seeking regulatory approval for the release of surplus capital. The quantum and timing of these capital extractions is by nature uncertain but as illustrated by the release of £11 million from Chevanstell Limited in 2008 and the release of $5 million from Goldstreet Insurance Company in 2010, these extractions can be significant. Continuing progress in managing down the liabilities and enhancing the capital efficiency of the portfolio by intra group transfers also bodes well for further releases in the future.

To reflect the source of profits being generated by the Group and to increase the flexibility of the method by which capital is returned to Shareholders, the Company is proposing to make a return of cash to shareholders through the issue of C and D Shares. The proposed Return of Value is in place of the final dividend for the 2010 year but the Company may choose to make future returns of value in addition to or instead of ordinary dividend payments, whilst maintaining its stated policy to grow total cash returns to shareholders by at least 5 per cent. per annum from the base level of 7 pence per share paid for the financial year ended 2009.

The Return of Value will involve the issue to Shareholders of C Shares and/or D Shares which is intended to give Shareholders, where eligible under their prevailing tax regime (such as in the UK), the flexibility to receive a return of cash from the Company as capital or income for tax purposes, or a combination of the two. The Directors believe the Return of Value represents the most efficient and effective way to return cash to Shareholders.

The Return of Value requires the approval of Shareholders, which will be sought at a General Meeting to be held at 110 Fenchurch Street, London EC3M 5JH at 9.30 a.m. on 27 April 2011. The Reduction of Capital included in the Return of Value is subject to the confirmation of the Court.

Current trading and prospects

After a strong first half result in 2010, the Group looks forward to the full year results with some confidence in spite of lower investment returns. Beyond the current year, weak investment markets look to continue to impact the overall Group results, but the Directors believe the service businesses are in good shape and these reliable profit streams (unaffected by investment returns) should enable the Group to maintain its stated distribution policy.

The Group remains optimistic that the development of its new underwriting management and "live" services operations and ability to find and execute value enhancing acquisitions will also provide further opportunities for growth in profitability.

Recommendation

The Board considers the terms of the Return of Value and the resolution to be proposed at the General meeting to be in the best interests of Shareholders as a whole. Accordingly, the Board intends to unanimously recommend that Shareholders vote in favour of the resolution at the General Meeting as the Directors and their connected persons intend to do or procure that their nominee does in respect of their own beneficial holdings amounting to 28,852,078 Existing Ordinary Shares in aggregate, representing approximately 53.7 per cent. of the current issued share capital of the Company (excluding shares held in treasury).

Expected timetable of principal events

Publishing and posting of the circular to Shareholders in respect of the Return of Value	11 April 2011
Latest time and date for receipt of forms of proxy or CREST proxy instructions for the General Meeting	9.30 a.m. on 25 April 2011
General Meeting	9.30 a.m. on 27 April 2011
Record time (for determining entitlement to C Shares and D Shares, the Capital Repayment on the C Shares and the Special Dividend on the D Shares)	5.00 p.m. on 13 May 2011
Credit CREST accounts with interim CREST entitlements in respect of Existing Ordinary Shares	16 May 2011
Existing Ordinary Shares commence trading ex-dividend	16 May 2011
Latest time and date for receipt of Forms of Election or USE instructions from CREST holders in respect of the Alternatives	11.00 a.m. on 24 May 2011
Court hearing to confirm the Reduction of Capital	25 May 2011
Effective date for Reduction of Capital	26 May 2011
Credit CREST accounts with, make BACS payments (with respect to the Dividend Alternative) to mandated accounts in respect of or despatch cheques in respect of the Capital Repayment on the C Shares and the Special Dividend on the D Shares	On or around 2 June 2011

Notes:

1 All references to time in this announcement are to London time unless otherwise stated.

2 The dates and times given in this announcement are based on the Company's current expectations and may be subject to change. If any of the above times or dates should change, the revised times and/or dates will be notified to Shareholders by an announcement on a Regulatory Information Service.

Further information on the Return of Value, together with the notice of the General Meeting at which the relevant resolution to implement the Return of Value will be proposed, will be set out in a circular to Shareholders which is expected to be despatched to Shareholder later today.

Copies of this announcement are, and copies of the circular to Shareholders in relation to the Return of Value will be, available on the Company's website at www.rqih.com.

-Ends-

Enquiries:

Randall & Quilter Investment Holdings plc	www.rqih.co.uk
Tom Booth	Tel: [phone]
Numis Securities Limited
Stuart Skinner (Nominated Adviser)	Tel: [phone]
Charles Farquhar (Broker)	Tel: [phone]
Shore Capital Stockbrokers Limited
Dru Danford / Stephane Auton	Tel: [phone]
Redleaf Communications	r&[e-mail]
Emma Kane/ Alicia Jennings	Tel: [phone]

Notes to Editors:

Since formation, Randall & Quilter has pursued a buy and build strategy to create a comprehensive range of investment activities and services in the global non-life insurance market and is focused on the following four core areas:

·      Insurance Investments;

·      Insurance Services;

·      Underwriting Management; and

·      Captives.

The Group currently:

·      has a portfolio of nine insurance companies in run-off (from the UK, US and Europe) with net assets of c.£74m as at 30 June 2010;

·      has wide service capability in both the 'live' and 'run-off' markets

·      has a team of approximately 300 insurance professionals based in the UK, USA, Bermuda, Canada and Gibraltar; and

·      provides 'turnkey' management services to new Lloyd's syndicate 1897 and manages two RITC ('run-off') syndicates.

The Group was founded by Ken Randall, Executive Chairman and Chief Executive, and Alan Quilter, Group Finance Director who both have extensive experience in the industry including as Head of Regulation of Lloyd's and as Head of the Market Financial Services Group respectively.

Definitions

The following words and expressions bear the following meanings in this announcement unless the context requires otherwise.

"Alternatives"	the Dividend Alternative and the Capital Alternative, or either of them as the context may require;
"Board" or "Directors"	the directors of the Company;
"Capital Alternative"	the allotment and issue of C Shares to be cancelled pursuant to the Reduction of Capital;
"Capital Repayment"	the proposed repayment of 4.45 pence per C Share;
"Court"	the High Court of Justice in England and Wales;
"CREST"	the system for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear UK and Ireland Limited in accordance with the Uncertificated Securities Regulations 2001;
"C Shares"	C Shares of 4.45 pence each in the capital of the Company proposed to be issued to implement the Return of Value;
"D Shares"	the D Shares of 4.45 pence each in the capital of the Company proposed to be issued to implement the Return of Value;
"Dividend Alternative"	the proposed special dividend of 4.45 pence per D Share to be declared and paid in accordance with the Dividend Alternative;
"Existing Ordinary Shares"	ordinary shares of 26/91 pence each in the capital of Randall & Quilter;
"General Meeting"	the General Meeting of the Company (or any adjournment thereof) to be held at the registered office of the Company at 110 Fenchurch Street, London EC3M 5JH at 9.30 a.m. on 27 April 2011;
"Group"	Randall & Quilter and its subsidiary undertakings (as defined in the Companies Act 2006);
"Return of Value"	the transactions comprising the Alternatives;
"Shareholders"	holders of Existing Ordinary Shares; and
"Special Dividend"	a special dividend of 4.45 pence per D Share to be declared and paid in accordance with the Dividend Alternative.

 

END

 

 

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