LPI’s FY10 net profit up 9.4%, cash reserves jump to RM600m

LPI Capital Bhd’s net profit for the whole year ended Dec 31, 2010 rose 9.37% to RM137.91 million from RM126.09 million a year earlier mainly due to higher underwriting profit.

In an announcement to Bursa Malaysia here yesterday, the general insurance underwriter said revenue rose 7.68% to RM752.07 million for FY10 from RM698.46 million a year ago due to higher gross premiums underwritten. Earnings per share rose to 63.83 sen from 58.75 sen.

LPI had declared a second interim single-tier dividend amounting to 45 sen per share for the fourth quarter ended Dec 31 (4QFY10), which is higher than 41.25 sen for the same period a year earlier.

In total, dividend was 55 sen for FY10, lower than 67.5 sen in the previous year. Net assets per share meanwhile stood at RM5.27.

At yesterday’s closing price of RM13.90, the stock was traded with a gross dividend yield of 4%.

Notably, LPI’s gross cash jumped to a sizable RM600.07 million on Dec 31, 2010 compared with RM221.41 million a year ago.

A look at the balance sheet suggests that, apart from the retention of FY10 profits, the sharp jump in cash reserves was also partly due to a decline in loans and receivables (excluding insurance receivables) to RM190.29 million from RM437.79 million a year ago.

For 4QFY10, LPI’s net profit rose 5.63% to RM36.94 million from RM34.97 million a year ago, while revenue rose 6.64% to RM190.75 million from RM178.88 million. Earnings per share rose to 16.77 sen from 16.30 sen.

“Barring unforeseen circumstances, prospects for LPI group for the year 2011 should be satisfactory,” it said.

LPI’s major shareholder is Public Bank Bhd chairman Tan Sri Teh Hong Piow, with a 16.7% stake. As at Dec 31, 2010, the company’s investments in quoted shares amounted to RM724.9 million, a bulk of which was invested in Public Bank shares. - by Yantoultra Ngui Yichen, theedgemalaysia.com.