LSE:LRE

Stock Analysis Report

Executive Summary

Lancashire Holdings Limited provides specialty insurance and reinsurance products worldwide.


Snowflake Analysis

Proven track record with adequate balance sheet.


Similar Companies

Share Price & News

How has Lancashire Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LRE's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

8.5%

LRE

8.9%

GB Insurance

8.6%

GB Market


1 Year Return

-4.4%

LRE

-30.0%

GB Insurance

-19.4%

GB Market

Return vs Industry: LRE exceeded the UK Insurance industry which returned -38.6% over the past year.

Return vs Market: LRE exceeded the UK Market which returned -25.9% over the past year.


Shareholder returns

LREIndustryMarket
7 Day8.5%8.9%8.6%
30 Day-8.8%-7.0%-3.5%
90 Day-16.3%-27.5%-23.0%
1 Year-3.8%-4.4%-22.6%-30.0%-15.5%-19.4%
3 Year0.7%-5.9%-17.6%-32.0%-8.8%-19.9%
5 Year30.4%-1.4%-8.4%-31.6%4.2%-19.0%

Price Volatility Vs. Market

How volatile is Lancashire Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Lancashire Holdings undervalued compared to its fair value and its price relative to the market?

38.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LRE (£6.05) is trading below our estimate of fair value (£11.56)

Significantly Below Fair Value: LRE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LRE is poor value based on its PE Ratio (12.6x) compared to the Insurance industry average (11.8x).

PE vs Market: LRE is poor value based on its PE Ratio (12.6x) compared to the UK market (12.3x).


Price to Earnings Growth Ratio

PEG Ratio: LRE is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: LRE is overvalued based on its PB Ratio (1.3x) compared to the GB Insurance industry average (1.2x).


Next Steps

Future Growth

How is Lancashire Holdings forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

9.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LRE's forecast earnings growth (9.2% per year) is above the savings rate (0.5%).

Earnings vs Market: LRE's earnings (9.2% per year) are forecast to grow slower than the UK market (15.4% per year).

High Growth Earnings: LRE's earnings are forecast to grow, but not significantly.

Revenue vs Market: LRE's revenue (10.9% per year) is forecast to grow faster than the UK market (2.6% per year).

High Growth Revenue: LRE's revenue (10.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LRE's Return on Equity is forecast to be low in 3 years time (12.5%).


Next Steps

Past Performance

How has Lancashire Holdings performed over the past 5 years?

-40.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LRE has high quality earnings.

Growing Profit Margin: LRE's current net profit margins (23.9%) are higher than last year (8.4%).


Past Earnings Growth Analysis

Earnings Trend: LRE's earnings have declined by -40.3% per year over the past 5 years.

Accelerating Growth: LRE's earnings growth over the past year (214.4%) exceeds its 5-year average (-40.3% per year).

Earnings vs Industry: LRE earnings growth over the past year (214.4%) exceeded the Insurance industry 4.5%.


Return on Equity

High ROE: LRE's Return on Equity (9.9%) is considered low.


Next Steps

Financial Health

How is Lancashire Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: LRE's short term assets ($1.5B) exceed its short term liabilities ($1.1B).

Long Term Liabilities: LRE's short term assets ($1.5B) exceed its long term liabilities ($777.1M).


Debt to Equity History and Analysis

Debt Level: LRE's debt to equity ratio (27.2%) is considered satisfactory.

Reducing Debt: LRE's debt to equity ratio has increased from 24.4% to 27.2% over the past 5 years.

Debt Coverage: LRE's debt is not well covered by operating cash flow (10.6%).

Interest Coverage: LRE's interest payments on its debt are well covered by EBIT (6.9x coverage).


Balance Sheet


Next Steps

Dividend

What is Lancashire Holdings's current dividend yield, its reliability and sustainability?

1.88%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: LRE's dividend (2.02%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (2.66%).

High Dividend: LRE's dividend (2.02%) is low compared to the top 25% of dividend payers in the UK market (7.4%).


Stability and Growth of Payments

Stable Dividend: LRE's dividend payments have been volatile in the past 10 years.

Growing Dividend: LRE's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (25.6%), LRE's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LRE's dividends in 3 years are forecast to be covered by earnings (80.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.9yrs

Average management tenure


CEO

Alex Maloney (45yo)

6s

Tenure

US$3,053,772

Compensation

Mr. Alexander Terence Maloney, also known as Alex, served as the Chief Executive Officer at Cathedral Capital Holdings Limited. Mr. Maloney has been the Group Chief Executive Officer of Lancashire Holdings ...


CEO Compensation Analysis

Compensation vs Market: Alex's total compensation ($USD3.05M) is above average for companies of similar size in the UK market ($USD1.85M).

Compensation vs Earnings: Alex's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Alexander Maloney
Group CEO & Director6yrsUS$3.05m0.34% $4.4m
Natalie Kershaw
Group CFO0.083yrno datano data
Denise O'Donoghue
Chief Investment Officerno datano datano data
Sophie Serjeant
Investor Relations & Corporate Communicationsno datano datano data
Colin Alexander
Director of Complianceno datano datano data
Christopher Head
Head of Corporate Affairs & Legal Counsel and Company Secretaryno datano datano data
Paul Gregory
Group Chief Underwriting Officer5.92yrsno datano data
Ben Readdy
Group Chief Actuaryno datano datano data
Hayley Johnston
Chief Underwriting Officer & Reinsurance Manager of Lancashireno datano datano data
Steve Yeo
Group Head of Claimsno datano datano data

5.9yrs

Average Tenure

46.5yo

Average Age

Experienced Management: LRE's management team is seasoned and experienced (5.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Alexander Maloney
Group CEO & Director6yrsUS$3.05m0.34% $4.4m
Natalie Kershaw
Group CFO0.083yrno datano data
Robert Lusardi
Non-Executive Director3.75yrsUS$175.00k0.0040% $51.1k
Peter Clarke
Non-Executive Chairman of the Board3.92yrsUS$350.00k0.030% $383.4k
Simon William Fraser
Senior Independent Non-Executive Director6yrsUS$255.00k0.00050% $6.4k
Michael Dawson
Non-Executive Director3.42yrsUS$175.00k0.0075% $95.9k
Samantha Hoe-Richardson
Non-Executive Director7.17yrsUS$238.64k0.0027% $34.2k
Sally Angela Williams
Non-Executive Director1.25yrsUS$168.88k0.00071% $9.1k

3.8yrs

Average Tenure

55yo

Average Age

Experienced Board: LRE's board of directors are considered experienced (3.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Lancashire Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Lancashire Holdings Limited
  • Ticker: LRE
  • Exchange: LSE
  • Founded: 2005
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: UK£1.287b
  • Shares outstanding: 201.45m
  • Website: https://www.lancashiregroup.com

Number of Employees


Location

  • Lancashire Holdings Limited
  • Power House
  • 7 Par-la-Ville Road
  • Hamilton
  • HM 11
  • Bermuda

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LRELSE (London Stock Exchange)YesOrdinary SharesGBGBPDec 2005
LCSH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDDec 2005
LRELBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPDec 2005
LNHDB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 2005

Biography

Lancashire Holdings Limited provides specialty insurance and reinsurance products worldwide. The company operates through five segments: Property, Energy, Marine, Aviation, and Lloyd’s. It offers aviation insurance solutions; coverage for upstream operational and construction all risks related to wind, earthquakes, and floods, as well as standalone business interruption coverage; and coverage in marine portfolio, including marine hull, total loss only, mortgagees interests insurance, mortgagees additional perils, excess protection and indemnity, marine war, and builder’s risks to high-profile accounts, cruise vessels, and liquid natural gas carriers. The company also provides property reinsurance solutions comprising worldwide property catastrophe excess of loss and territorial specific retrocession; and terrorism and political risk solutions consisting of war and strike, riots, civil commotion, confiscation, expropriation, nationalization, deprivation, political violence, and currency inconvertibility/non transfer, as well as contract frustration cover against sovereign and quasi sovereign entities. In addition, it offers general insurance, insurance management, support, and insurance mediation services. The company was founded in 2005 and is headquartered in Hamilton, Bermuda. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/10 02:24
End of Day Share Price2020/04/09 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.