Advent Capital

Q1 profit

Excluding Reinsurance to Close, gross premiums written rose 41% in Sterling terms

Encouraging view of underwriting conditions

5x estimated EPS and a 34% discount to net tangible assets leaves shares looking too cheap

Results

2008 results show loss due to greater than expected costs from Hurricane Ike

New estimates for 'average' hurricane season in 2009 of £18.1m PBT

This leaves shares on only 3x PER and trading at 52% discount to tangible NAV

Revised estimates

Company revises their cost estimate of Hurricane Ike upwards on changes in estimates from lead insurers

Business plan to take account of £ decline vs $

No dividend now expected this year, but estimated yield of over 9% in 2009 and a PER then of under 4x reflect significant undervaluation

Weathers the storms

Advent achieves underwriting profit despite impact of hurricanes

Ultra-safe investment portfolio generates profits in quarter and throughout year

Improved prospects for 2009

Low PER, high yield, discount to NAV means cheap

Q2 results and bid approach

Unsolicited takeover approach

Second quarter provided substantial growth in earned premiums and underwriting profit

In our view a reasonable price soley based on fundamentals would be in excess of its net tangible assets of 240p