This morning Genworth Mortgage Insurance Australia (ASX: GMA) reported its full-year results for the period ending December 31 2018. Below is a summary of the results with comparisons to the prior corresponding year
- Statutory net profit of $75.7m, compared to $149.2m
- Adjusted net profit of $93.9m, compared to $171.7m
- Gross written premiums of $460.2m, compared to $369m
- Final fully franked dividend of 9 cents per share
- Total 2018 dividends of 21 cents per share
- Two on-market share buy-backs completed over 2018 worth $149m
- New share buy-back announced today worth up to $100m
As a provider of lenders' mortgage insurance Genworth suffered a tough 2018 due to falling confidence in the housing market and as investors lose confidence due to regulatory changes among other factors.
As a result of the tough housing conditions the market has sold the stock off to the point that it now offers a 8.9% trailing yield plus the tax effective benefits of franking credit. However, this will mean little if the company is forced to cut its dividend in 2019.
For the year ahead it is forecasting that net earned premium will be within a +5% to -5% range on 2018 on a full year loss ratio between 45% to 55%.
Investors liked the news to send the stock up 3.5% to $2.34 today.
