Conduit shares rise as Q1 top-line growth exceeds analysts' expectations

By Ryan Hewlett

May 14 - (The Insurer) - Shares in Conduit Holdings rose more than 8% in early trading on Wednesday after the reinsurer reported top-line growth of 15% for the first quarter and confirmed Neil Eckert is to continue as CEO.

The London-listed stock initially rose by 11.8% to 388.00 pence apiece shortly after the opening bell before modestly paring back the gains to trade 8.9% higher at 379.50 pence as at 11.00 a.m. BST.

The share price remains down by around 20% for the year to date and almost 26% below its December 2020 IPO value.

Wednesday’s gains came after a pre-markets trading statement in which the firm reported a 17% year-on-year increase in reinsurance revenue to $213 million. Gross written premiums increased 15% to $410 million, ahead of analysts' expectations.

Conduit Re also announced its first share buyback, which Panmure Liberum's Abid Hussain said was a signal of management's "confidence in the business".

“At the current share price, the stock now represents deep value," he said.

Hussain also welcomed the appointment of Eckert as CEO. Eckert, who co-founded the reinsurer and previously served as chairman, had held the role on an interim basis since late March following the departure of Trevor Carvey.

“He was the natural choice as a founder with deep sector expertise and intimate knowledge of the business,” Hussain said.

Conduit Re announced in March that it was purchasing additional reinsurance cover to reduce earnings volatility for the remainder of the year. The cost of the additional cover led management to reduce its return on equity guidance for 2025 to between high single digits and low double digits.

Berenberg analyst Michael Huttner said this was "of significant value to investors".

"We stress the significance of the $50 million buyback. Conduit is delivering on its commitment when it listed in 2020 to manage its capital for attractive recurring total shareholder returns, and we believe it will also review its capital management flexibility in the future," Huttner said.