Genworth Mortgage Insurance Australia Limited (ASX: GMA) has reported a statutory net profit after tax of $47.8 million and Underlying NPAT of $22.3 million for 2019 March quarter, in line with the company’s full-year guidance and reflecting the seasonal increase in the loss ratio historically experienced by the company’s’ business.
GMA’s shares were up 3.347% in the intraday trade as on 1 May 2019.
The company today reported its first quarter financial results for the FY19 in which it reported New Insurance Written (NIW) of $4.3 billion, up 24% on pcp, reflecting growth in Genworth’s traditional LMI flow and bulk business. However, the company’s Gross Written Premium (GWP) decreased by 50.4% to $86.3 million in 1Q19. The company’s loss ratio for 1Q FY19 was 55.3%, down by 60 bps from 1Q18. In the first quarter of FY19, the company’s Net Earned Premium increased by 8.2% to $72.9 million which includes $4.5 million of unearned premium that was released as part of the company’s lapsed policy initiative in 1Q19.
The company has also reconfirmed its FY19 guidance with FY19 Net Earned Premium (NEP) expected to be in between -5% to +5% of FY18 NEP and the full year loss ratio expected to be in the range of 45%-55%.
In February 2019, the company commenced a new on-market share buy-back of up to $100 million. As at 31 March 2019, the company acquired 11.8 million shares which are valued at $29.4 million. The company is planning to put a resolution to shareholders at the Company’s Annual General Meeting in May 2019 to consider and approve future possible buy-backs of up to 100 million shares over the next 1 year period.
While providing an update on the company’s Genworth economic outlook the company informed that the economic growth in 1Q19 was consistent with 2H18 trends, reflecting softer growth rates compared with 1H18. The company believes that Perth will continue to experience challenging market conditions throughout 2019 resulting from the flow-on effect of the end of the mining boom.
While commenting on the company’s outlook, the company’s Chief Executive Officer and Managing Director, Ms Georgette Nicholas told that the company is focused on maintaining the momentum of its strategic program of work by implementing initiatives that grow the company Gross Written Premium and diversify its revenue streams. The company believes that it is well capitalized, and it is on a track record of delivering strong profits and capital returns to shareholders.
Today, the company has also announced the retirement of Ms Georgette Nicholas from her role as Chief Executive Officer and Managing Director of Genworth. She will continue in her current role of CEO & MD until someone else takes up her role.
In the past six months, the share price of the company increased by 9.63% as on 30 April 2019. At the time of writing, i.e., on 1 May 2019, the stock of the company was trading at a price of A$2.470, up by 3.347% during the day’s trade with the market capitalisation of ~A$1.02 Billion.
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