London Pacific Insurance Capital-Impressive Growth

Rising like the Phoenix

Yes, though the counter did not garner any premium when it went ex-dividend, it is still a good stock worthy of a part of your portfolio.

After ex dividend, it should be at RM13.50 but some weak sellers forced it to slide to RM13.32. Today it is sitting at RM13.40 for a 10 sen loss.

I was just looking at the Annual Report 2011 which I just received. Apparently, LPI derived most of its revenue from fire insurance policies (40.6%) followed  by motor(24.1%), marine, aviation and transit(2.85%); and miscellaneous (32.5%). The premiums received for the year 2011 were RM304,337,000 for fire, RM263,470,000 for motor, Rm38,461.000 for Marine,Aviation and transit and RM 301644,000 for Miscellaneous.

In terms of  performance, net profits attributing to owners of the company amounted to RM154,494,000, a 12% increase over 2010. Earnings per ordinary share rose from 63.8 sen to 70.1%.

As for dividend, LPI  paid out a dividend of 75 sen per share.

Under the section called 'Superior Returns to Shareholders', LPI is proud of its returns. I qoute  some of their 'pride' as follows.

"Over the medium-term period of 5 years,an LPI shareholder purchasing 1000 shares at the price of RM9.35 at the beginning of 2007 would have received gross dividends of RM5,463 and would have 1,600 shares be the end of 2011.At the price of RM13.52 per LPI shares, a shareholder would have RM21,632 along with his gross dividends of RM5,463 making his returns to be RM27,095 or 27.4% for the 5 year period.

Going further back if a shareholder bought and held 1,000 shares of LPI when it was listed and have subscribed to all its rights issue without selling nay, at the end of 2011, that shareholder will have 8,640 shares worth RM116,813. At the same time the shareholder would have received total gross dividend of RM46,230.

As sch with a capital outlay of RM10,730 and subscribing to all rights issues,that shareholder would have secured a remarkable average rate of return of 26.6% annually for 18 years or 1,420% for that said period."

So, do you still think is worth buying LPI today at RM13.40?

This you will know from hindsight many years down the road.

So let us time capsuled it today.