Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


QBE - First Take: QBE Feeling Pressure On Margin Constraints


QBE - First Take: QBE Feeling The Pressure On Margin Constraints

On first blush, headline figures came in broadly in-line, with net profit (reported) up 8% on last year at $761 million. Gross written premium was also stronger year-on-year, higher by 1% to $18.43 billion dollars. Final dividend was slightly better due to franking, with QBE reporting a $0.10 fully-franked dividend versus a $0.11 25% franked dividend on consensus.

However, expected headline figures were around $891 million for reported NPAT, and $18.48 billion for written premium. The number get murkier still with insurance margins up year-on-year at 8.0% versus 7.1%, however they are just below the consensus of 8.1% with some calling for margins of 8.6%. The main question being asked is; where can the increases in margins come from?

Management’s margin guidance of 11% was reconfirmed today; some margin increases are expected to come from ‘transformation program’ costs which should add 1% to 1.5%. However this has surely been taken into account on the results today, therefore the additional increases to the forecasted margin are hard to find.

Guidance was also vague, and based on what we have just seen for FY12, there is downside risk to FY13. The US and Australian guidance looks like it has been squeezed again, margin guidance looks high, and costs are up; do not be surprised to see downgrades to guidance over the course of the year.

However, the new management team does look like its ‘clearing the decks’ with restricting of the portfolio and the will to attack costs head on, and that may just hold back the guidance downgrades. Only time will tell.

EVAN LUCAS
Market Strategist
www.igmarkets.com

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Tax: GST Threshold For Online Purchases Won't Lower Before 2018

The government wants to lower the threshold on online purchases which qualify for GST from mid-2018, but says more work is needed and there will be no change without public consultation. More>>

ALSO:

North Canterbury: Government Extends Drought Classification

The government has extended a drought classification for the eastern South Island until the end of the year, meaning the area will have officially been in drought for almost two years, the longest period for such a category. More>>

ALSO:

Negotiations Fail: Christchurch Convention Centre Build To Proceed Without PCNZ

After protracted negotiations, the government has ditched the construction consortium it picked to build Christchurch's replacement convention centre, which it now anticipates delivering at least two years behind the original schedule. More>>

ALSO:

Ruataniwha: Greenpeace Launches Legal Challenge Against $1b Dam Plan

Greenpeace NZ is launching a legal challenge against a controversial plan to build a dam that’s set to cost close to $1 billion and will pollute a region’s rivers. More>>

ALSO:

Inequality: Top 10% Of Housholds Have Half Of Total Net Worth

The average New Zealand household was worth $289,000 in the year to June 2015, Statistics New Zealand said today. However wealth was not evenly distributed, with the top 10 percent accounting for around half of total wealth. In contrast, the bottom 40 percent held 3 percent of total wealth. More>>

ALSO:

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news