Insurer Lancashire Holdings saw shares rise nearly 10 percent in early trading on Thursday, with higher revenues partially offsetting a decline in profit for the fourth quarter.
Net profit after tax declined to $51.1 million from $54.4 million in the prior-year quarter, with earnings per share falling to $0.25 from $0.27 last year. However, total revenue rose to $153.4 million, up from $144.6 million the year before.
The group’s chief executive office, Alex Mahoney, said the year had been “turbulent” both politically and economically, adding that it had been particularly “challenging” for the insurance market. He added that “against this background, I am particularly pleased with the results for both the fourth quarter and the full year.”
He continued, “These results prove that, even in the current difficult times, we have relevance, our model works and is resilient. At 1 January, in line with our expectations and previous communication, we successfully renewed our core book across the Group, including at our Lloyd’s platform”.
However, operating earnings per share were flat with the year-ago period at $0.23 and the group’s net loss ratio for the fourth quarter was 32.6 percent, compared to 18.3 percent in the same period last year.
Alongside the results, Peel Hunt confirmed its ‘add’ rating on Lancashire Holdings on Thursday. In a note issued to investors, they had a £7.10 ($8.87) price target on the stock, indicating a potential upside of 4.34 percent from the company’s current price.
In his statement, Mahoney concluded: “Whilst we expect market conditions to remain difficult for the foreseeable future, which requires discipline and patience to navigate, our strategy has the ability to respond across the insurance cycle.”
“We are well equipped to meet the needs of our clients and to generate acceptable returns for investors, whilst having the flexibility to capitalise quickly on new opportunities as they arise.”
Lancashire Holdings shares are currently trading up 9.52 percent at 745.00 (0908GMT).