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Lancashire Holdings (GB:LRE)
:LRE
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Lancashire Holdings
(LSE:LRE)
77Outperform
Lancashire Holdings (LRE) vs. S&P 500 (SPY)
Market Cap
£1.32B
Dividend Yield3.29%
Average Volume (3M)1.02M
Price to Earnings (P/E)5.2
Beta (1Y)0.98
Revenue Growth14.46%
EPS Growth-2.98%
CountryUK
Employees426
SectorFinancial
Sector Strength79
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)1.05
Shares Outstanding244,010,010
10 Day Avg. Volume823,191
30 Day Avg. Volume1,022,649
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)N/A
Price to Sales (P/S)1.00
Price to Cash Flow (P/CF)4.10
P/FCF Ratio3.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
708.67pPrice Target Upside30.99% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Lancashire Holdings Business Overview & Revenue Model
Company DescriptionLancashire Holdings Limited, together with its subsidiaries, provides specialty insurance and reinsurance products in London, Bermuda, and Australia. The company operates through five segments: Property and Casualty Reinsurance, Property and Casualty Insurance, Aviation, Energy, and Marine. It offers property direct and facultative, property political risk and sovereign risk, and property terrorism and political violence insurance products, as well as property reinsurance services; and aviation AV52, aviation consortium, airline hull and liability, and satellite insurance products. The company also provides marine hull, total loss only, mortgagees interests insurance, mortgagees additional perils, excess protection and indemnity, marine war, and builder's risks; and energy insurance products covering upstream, downstream and onshore operational, and upstream construction all risks business. In addition, it offers general insurance, support, insurance agent, and insurance mediation services. The company was incorporated in 2005 and is headquartered in Hamilton, Bermuda.
How the Company Makes MoneyLancashire Holdings makes money primarily through underwriting insurance and reinsurance policies across its specialized sectors. The company's revenue model is centered around collecting premiums from policyholders in exchange for providing coverage against specific risks. Key revenue streams include insurance premiums from sectors such as property, energy, marine, and aviation, where the company leverages its expertise in underwriting complex and high-value risks. Additionally, Lancashire Holdings benefits from its investment portfolio, where it manages assets to generate investment income, thereby enhancing overall profitability. Strategic partnerships with brokers and insurance agents, as well as maintaining a disciplined approach to risk selection and capital management, contribute significantly to its earnings.
Lancashire Holdings Financial Statement Overview
Summary
Lancashire Holdings has demonstrated strong revenue growth and cash flow generation, with robust profitability metrics. The absence of EBIT is a concern, but overall, the balance sheet is stable with controlled leverage and effective cash management.Income Statement
Lancashire Holdings has shown strong revenue growth with a Revenue Growth Rate of 19.5% year-over-year from 2023 to 2024. The Gross Profit Margin remains robust at 100% due to the nature of the insurance industry. However, the absence of EBIT in the latest year could be a concern, though EBITDA Margin holds at 24.8%. Net Profit Margin is solid at 21.5%, indicating profitability improvements.82
Very Positive
Balance Sheet
The company's balance sheet shows a solid equity position with an Equity Ratio of 34.1%. The Debt-to-Equity Ratio is stable at 0.31, indicating manageable leverage. ROE stands at 21.5%, demonstrating effective equity utilization. However, the overall asset base has slightly decreased, which could be a point of concern.75
Positive
Cash Flow
Cash flow performance is strong with a Free Cash Flow Growth Rate of 33.2% from 2023 to 2024. The Operating Cash Flow to Net Income Ratio is 1.79, indicating efficient operations generating cash. Free Cash Flow to Net Income Ratio is 1.76, reflecting strong cash conversion capabilities.88
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.20B | 1.50B | 1.25B | 1.01B | 751.10M | 540.80M | Gross Profit |
| 1.20B | 1.50B | 1.25B | 1.01B | 751.10M | 540.80M | EBIT |
| 369.80M | 0.00 | 369.80M | 26.40M | -79.10M | -11.10M | EBITDA |
| -37.10M | 371.30M | 364.50M | 12.40M | -42.90M | 26.20M | Net Income Common Stockholders |
| 321.50M | 321.30M | 321.50M | -3.30M | -61.60M | 4.20M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.88B | 3.13B | 2.88B | 548.80M | 517.70M | 432.40M | Total Assets |
| 3.90B | 4.38B | 3.90B | 4.75B | 4.07B | 3.55B | Total Debt |
| 471.30M | 469.30M | 471.30M | 469.40M | 463.60M | 348.40M | Net Debt |
| -285.60M | -215.00M | -285.60M | -79.40M | -54.10M | -84.00M | Total Liabilities |
| 2.39B | 2.89B | 2.39B | 3.48B | 2.66B | 2.01B | Stockholders Equity |
| 1.51B | 1.49B | 1.51B | 1.27B | 1.41B | 1.54B |
| Cash Flow | Free Cash Flow | ||||
| 432.30M | 566.40M | 425.30M | 312.80M | 239.90M | 80.90M | Operating Cash Flow |
| 441.90M | 573.80M | 441.90M | 323.80M | 243.80M | 80.90M | Investing Cash Flow |
| -54.30M | -251.90M | -54.30M | -194.90M | -186.80M | -260.10M | Financing Cash Flow |
| -185.40M | -386.10M | -185.40M | -90.80M | 32.80M | 287.30M |
Lancashire Holdings Technical Analysis
Negative
541.00
Price Trends
580.36
Negative
604.19
Negative
586.57
Negative
Market Momentum
-3.29
Negative
49.20
Neutral
83.68
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:LRE, the sentiment is Negative. The current price of 541 is below the 20-day moving average (MA) of 567.00, below the 50-day MA of 580.36, and below the 200-day MA of 586.57, indicating a bearish trend. The MACD of -3.29 indicates Negative momentum. The RSI at 49.20 is Neutral, neither overbought nor oversold. The STOCH value of 83.68 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:LRE.
Lancashire Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | £9.04B | 13.62 | 56.17% | 4.19% | 34.86% | 95.18% | |
79 Outperform | £5.21B | 6.10 | 26.32% | 1.58% | 7.79% | 9.99% | |
77 Outperform | £1.32B | 5.16 | 21.23% | 3.29% | 14.46% | -2.98% | |
68 Neutral | £2.25B | 58.73 | 3.77% | 9.72% | -15.48% | -91.10% | |
64 Neutral | $13.44B | 9.41 | 9.19% | 4.92% | 16.30% | -8.66% | |
63 Neutral | £3.40B | 23.33 | 5.97% | 2.25% | 26.11% | -29.43% | |
51 Neutral | £1.09B | ― | -2.09% | 6.54% | 6.08% | ― |
* Financial Sector Average
Performance Comparison
GB:LRE
Lancashire Holdings
556.00
45.38
8.89%
GB:BEZ
Beazley
874.00
232.38
36.22%
GB:HMSO
Hammerson plc R.E.I.T.
231.40
-26.13
-10.15%
GB:ADM
Admiral
3,020.00
464.49
18.18%
GB:DLG
Direct Line Insurance
266.80
81.55
44.02%
GB:BRBY
Burberry
661.00
-476.17
-41.87%
Lancashire Holdings Earnings Call Summary
Earnings Call Date: Mar 6, 2025 | % Change Since: -9.96% | Next Earnings Date: Aug 6, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed outlook. While Lancashire achieved strong financial performance in 2024 with record ROE and premium growth, the impact of significant loss events like the California wildfires and anticipated rate softening pose challenges for 2025. The company's ability to return capital to shareholders and expand geographically highlights resilience, but the loss environment and competitive pressures weigh on future prospects.Highlights
Record Return on Equity (ROE)
Lancashire delivered an impressive ROE of 23.4% for 2024, showcasing the effectiveness of their growth and diversification strategy.
Premium Growth
The company achieved an 11% growth in premiums for 2024, exceeding their guidance of 10%, and has more than tripled premiums since 2017.
Strong Underwriting Performance
Lancashire's combined ratio was 80% on a discounted basis and 89.1% on an undiscounted basis, reflecting strong underwriting results despite significant weather and large risk losses.
Capital Returns to Shareholders
Lancashire returned $354 million to shareholders in 2024 and declared a special dividend of $0.25 per share.
Investment Returns
The investment portfolio generated a return of 5%, driven by high yields and strong performance of risk assets.
Geographic Expansion
Lancashire successfully launched a U.S. platform, contributing to year-on-year growth and positioning for future expansion.
Lowlights
Impact of California Wildfires
The wildfires in Los Angeles are expected to result in a net loss of $145 million to $165 million, significantly affecting the financial outlook for 2025.
High Catastrophe Losses
Natural catastrophe losses were approximately $145 billion in 2024, contributing to a challenging loss environment.
Rate Softening Expected
For 2025, Lancashire anticipates the first year since 2017 to see marginal rate softening, indicating a more competitive environment.
Baltimore Bridge Disaster
The Baltimore bridge loss was a significant large risk event impacting the insurance service result for 2024.
Company Guidance
During the Lancashire Full Year 2024 Earnings Conference Call, key guidance metrics were highlighted. The company reported a strong return on equity (ROE) of 23.4% for 2024, despite facing significant industry losses, and projected an ROE in the mid-teens for 2025, considering similar loss levels as in 2024 plus an estimated $145 million to $165 million impact from the California wildfires. Premiums grew by 11.3%, surpassing their guidance of approximately 10%, and the combined ratio was 80% on a discounted basis and 89.1% on an undiscounted basis. The investment portfolio generated a return of 5%, while the diluted book value per share increased by 23.4%. The company returned $354 million to shareholders through dividends and retained a healthy balance sheet with a solvency ratio of around 250% after accounting for the California wildfire loss. Looking ahead, Lancashire anticipates low single-digit growth in gross written premiums for 2025, with a focus on specialty reinsurance lines and the U.S. platform, while maintaining underwriting discipline amidst a dynamic external environment.Lancashire Holdings Corporate Events
Shareholder MeetingsFinancial DisclosuresRegulatory Filings and Compliance
Lancashire Holdings Announces 2025 AGM and Publishes 2024 Annual Report
Neutral
Mar 28, 2025
Lancashire Holdings Limited has announced its 2025 Annual General Meeting (AGM) scheduled for April 30, 2025, at its head office in Bermuda. Shareholders can attend in person or via a dedicated telephone conference line, with voting rights determined by the register of members as of April 23, 2025. The company has also published its 2024 Annual Report, which is available on its website and through the National Storage Mechanism. This announcement is part of Lancashire’s regulatory obligations and may contain price-sensitive information.
Executive/Board ChangesBusiness Operations and Strategy
Lancashire Holdings Grants Executive Share Awards
Neutral
Mar 17, 2025
Lancashire Holdings Limited has announced the granting of Restricted Share Awards (RSS awards) as nil-cost options over common shares to its top executives. These awards are part of the company’s Long Term Incentive Performance and Deferred Annual Bonus plans, aimed at incentivizing key management figures such as Alex Maloney, Natalie Kershaw, and Paul Gregory. The awards are structured to vest over a period of time, contingent on performance conditions and continued employment, reflecting the company’s strategy to align executive interests with long-term shareholder value.
Executive/Board ChangesBusiness Operations and Strategy
Lancashire Holdings Announces Strategic Board Committee Appointments
Neutral
Mar 6, 2025
Lancashire Holdings Limited has announced several key appointments to its board committees, effective from March 5, 2025. Nathalie Rachou, Linda Ventresca, Bob Cox, and Matthew Narbett have been appointed to various committees, with Rachou expected to become Chair of the Investment Committee following the company’s Annual General Meeting in April. These appointments are likely to impact the company’s strategic direction and governance, potentially influencing its market positioning and stakeholder relations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.