Some good news at last from Real Insurance PLC!
After several years of frustrating results and (serious) losses, the company has announced pre-tax profit of K241 Million against a pre-tax loss of K157M (and several years of loss in succession)! The company also registered its highest ever growth rate (59%) since its listing on the Malawi Stock Exchange registering a written premium of K2.070 billion against K1.303 billion in 2012 and against a the budget target of K1.9 billion). These are impressive results considering that the Malaŵian economy [only] grew by 4.3% in 2013 (compared to 1.9% in 2012)
Last year at the company's Annual General meeting (AGM), the company announced that it had hired a new manager to turn things around. The new manager seemed to know his trade and impressed the gathering of the shareholders. It was the least acrimonious AGM in the loss making years of the company that I had attended. The manager even got an ovation! The new manager promised to turn around the company and institute some changes and shake things up and put his neck on the chop[ping block should he fail in his first year! Risky but impressive!
When the half-year results of the company were announced, indications were that indeed the company had turned a corner. The Chairman and his Board must therefore be commended for the bold changes that they instituted last year, including the firing of the last non-performing manager. In fact the company had the misfortune of hiring managers who were not conversant with the local insurance market, something that had been brought to their attention several AGMs earlier!
The company has announced that despite making a healthy profit, it will not declare any dividend because the company is still not healthy enough. Indeed it would be foolhardy to do so because the company has no reserves, any such reserves would be in the negative because of the string of successive losses in the previous years.
So the non-payment of dividends may be the only negative news that may dampen the market's reception of the results but the turn-around is good for the company and the Malawi Stock Exchange. However, let us see how the market reacts!
As a shareholder of Real Insurance PLC Malawi, I can only encourage the Board and Management to keep track of the positive changes they have instituted so that the company can soon start declaring dividend for its very patient shareholders! At least the corner has been turned.