Lloyd’s of London insurer Beazley, which covers risks ranging from terrorist kidnapping to construction faults, had almost £45million wiped off its share price yesterday as half-year results disappointed investors.
The insurance giant revealed that its profit for the first half had plummeted by 63.8 per cent to £43.9million, after it generated an 80 per cent lower return on its investments – namely US bonds – due to a ‘marked rise’ in US interest rates.
Beazley, which is one of the biggest firms on the Lloyds of London insurance marketplace, added that it was seeing higher claims from some of its property and marine policyholders.
These bumped-up claims – one of which was for more than £3million on a single house – were forcing it to increase its reserves.
Lloyd’s of London insurer Beazley’s profit for the first half has plummeted by 63.8 per cent to £43.9m, after it generated an 80 per cent lower return on its investments
Despite the challenges, chief executive Andrew Horton was generally upbeat, noting the outlook was more positive for the second half of the year and that the dividend was up 5 per cent, consistent with guidance.
He added: ‘Growth in premiums was strongest in our property division, where rates have risen sharply following the heavy catastrophe losses incurred by insurers and re-insurers last year.’
But investors showed their concern, as Beazley’s share price fell 1.5 per cent, or 8.5p, to 549p.
There was little drama on the FTSE 100, which ended the day down 0.07 per cent, or 5.18 points, at 7678.8.
Rises in defensive stocks such as British American Tobacco (up 2.5 per cent, or 98p, to 3960p) and Unilever (up 0.7 per cent, or 31p, to 4361.5p), which proved popular after President Trump criticised the US Federal Reserve for hiking interest rates.
Stock Watch – Symphony Environmental Technologies
Symphony Environmental Technologies, a maker of biodegradable plastic, hit back at the BBC for an item that did not ‘fairly present the scientifically proven benefit’ of its technology.
Shares fell by 27.7 per cent, or 5.75p, to 15p as it tried to explain the benefits of its ‘oxo-biodegradable’ plastic, which breaks down into biodegradable materials when in contact with air.
Symphony said it was ‘surprised’ by a test cited by the BBC, adding that it contradicted its own tests.
He threatened to go ‘whole hog’ on China tariffs. On the FTSE 250, emergency repairs firm Homeserve climbed as it gave out positive signals at its AGM.
Trading between April and July was in line with its outlook, the company said, adding that particularly strong growth was expected in North America.
Shares rose 2.7 per cent, or 26p, to 996p as the meeting passed without incident.
The biggest surprises of the day came from London’s junior market. Clearstar, a business which creates software to speed up background checks on new employees, saw its shares shoot up as broker Finncap upgraded its target price by a third to 80p.
Finncap said the company’s trading update, released earlier this week and revealing the highest-ever revenues for a six-month period, gave ‘greater certainty and confidence in the growth forecast’. Clearstar ended the day just shy of the broker’s target, rising 9.9 per cent, or 7p, to 77.5p.
Sirius Minerals, the fertiliser miner digging a 23-mile transport tunnel under the Yorkshire Moors, climbed 1 per cent, or 0.3p, to 33.7p as it signed long-term supply agreements with two Chinese companies.
Sirius’s chief executive Chris Fraser said that China was a ‘key market’ for its Poly4 fertiliser, which is made from the polyhalite mineral mined in Yorkshire.
Machinery firm 600 Group was engineering its way to success, as it posted double-digit revenue increases in its full-year results.
Revenues climbed by 12 per cent to £5.3million, in a year where 600 Group also managed to agree the sale of £203million of its pension liabilities.
Meanwhile the order books for its components and machinery were stable and industry forecasts were ‘improving’, the firm said, which caused shares to lift 9.1 per cent, or 1.5p, to 18p.
But there were also some negative results in the AIM universe.
Bango, which provides technology for different companies to charge customers through just one bill, slipped 3.2 per cent, or 5.25p, to 156.75p, despite announcing its role in the Vodafone and Amazon’s Prime Video partnership last month.