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Direct Line Group(DLG) Fundamentals


Direct Line Announcement of Offer Price

The offer price has been set at 175 pence per Ordinary Share, implying a total market capitalisation of Direct Line Group £2,625 million.

RBS now owns 65.28% - Holding(s) in Company

Interim Management Statement

Financial highlights

· Operating profit from ongoing operations1 of £347.9 million for the nine months to 30 September 2012, up 3% (nine months to 30 September 2011: £337.8 million)

· In-force policies of 20.1 million, up 4% since the beginning of the year (31 December 2011: 19.4 million) with Motor and Home broadly stable and growth in Rescue and other personal lines

· Combined operating ratio2 for ongoing operations of 99.7% for the nine months to 30 September 2012, an improvement against the nine months to 30 September 2011 (101.9%) driven principally by a significant improvement in the loss ratio

· Annualised return on tangible equity3 ("RoTE") from ongoing operations of 10.6% for the nine months to 30 September (proforma RoTE: 13.5%4)

· Operating profit from ongoing operations for third quarter 2012 of £123.7 million, down 4% compared with third quarter 2011 reflecting lower investment returns partially offset by a better underwriting result; the third quarter 2012 combined operating ratio of 96.9% compared with 100.5% for third quarter 2011, driven by improvements in both the loss and expense ratios

· Net asset value per share of 187.2 pence and tangible net asset value per share of 159.7 pence per share (31 December 2011: 240.9 pence and 216.5 pence, respectively)


Business highlights

· Successful separation from RBS Group and subsequent IPO of Direct Line Group in
early October

· Steps announced to deliver approximately 50% of the 2014 target of £100 million gross annual cost savings5

· Continued rollout of claims transformation plan with over 400,000 Motor and Home claims now on the new claims system. Benefits from plan contributing to prior year reserve releases.

Investec initiates buy Direct Line, target price 210p

Full year results February 2nd.

Canaccord Genuity Buy 223.80 223.60 - 240.00 Initiates/Starts

Preliminary results year ended 31 December 2012

Financial highlights

· 9.3% increase in operating profit from ongoing operations1 to £461.2 million with all five divisions profitable in 2012
· Return to underwriting profit with a combined operating ratio2 of 99.2%, an improvement of 2.6 percentage points
· Return on tangible equity3 of 11.5% and pro forma return on tangible equity3 of 13.4%
· Final dividend of 8 pence per share, implying a pro forma annual payout of 55% of post-tax earnings from ongoing operations. From 2013, aim to raise the dividend annually in real terms

Strategic highlights

· Good progress made towards achieving 15% return on tangible equity target

· New and extended major partnership agreements and expanded presence of Churchill and Privilege to the four major UK price comparison websites

· Delivered benefits through claims and pricing transformation plans contributing to a 3.1 percentage point improvement in the loss ratio to 67.1%

· Announced plans relating to 70% of £100 million gross annual cost saving target with advanced plans for remainder of the proposed savings

· Improved balance sheet efficiency by raising £500 million of long-term subordinated debt and paying £1 billion of dividends to RBS Group pre-IPO. Capital position remains strong with risk based capital coverage of 145% post-final dividend

RBS completes partial sale of DLG ordinary shares

RBS Completes Partial Sale of Direct Line Group Ordinary Shares

Further to the announcement by The Royal Bank of Scotland Group plc ("RBS") on 12 March 2013, RBS has completed the sale of 252.3 million ordinary shares in Direct Line Insurance Group plc ("Direct Line Group") at a price of £2.01 pence per share, raising gross proceeds of £507 million, assuming the over-allotment is exercised in full.

RBS now holds 726.9 million ordinary shares of Direct Line Group, representing 48.5% of the issued ordinary share capital. If the over-allotment option is not exercised, RBS's remaining stake will comprise 749.9 million shares, equivalent to 49.99% of Direct Line Group's issued ordinary share capital.

The sale marks the continuation of RBS's EU-mandated disposal strategy, with cash proceeds being used for general corporate purposes.

Bruce Van Saun, RBS Group Finance Director commented, "We are pleased with the performance of Direct Line Group since the IPO in October 2012. This sale is part of our ongoing delivery against EU commitments and will take our ownership below the 50% level. We continue to execute well against the key milestones in our recovery plan".

1st Quarter Results

Financial highlights

· Operating profit from ongoing operations1 of £107.5 million for the first quarter 2013, up 32.9% (first quarter 2012: £80.9 million)

· Gross written premium for ongoing operations 4.5% lower reflecting competitive market conditions in UK personal lines, partially offset by growth in International

· Combined operating ratio2 for ongoing operations of 98.0% for the first quarter 2013, an improvement of 6.5 percentage points against the first quarter 2012 (104.5%) driven by continued prior year reserve releases and lower claims from weather events

· Annualised return on tangible equity3 from ongoing operations of 12.3% for the first quarter 2013 (first quarter 2012: 7.7%; pro forma4 full year 2012: 13.4%)

· Net asset value per share of 195.3 pence and tangible net asset value per share of 166.0 pence (31 December 2012: 189.1 pence and 161.0 pence, respectively). Tangible net asset value per share of 158.0 pence after deducting the 2012 final dividend of 8 pence per share

Strategic and operational highlights

· Continued momentum in pricing and claims initiatives, contributing to improved underwriting result, including significant prior year reserve releases

· Actions relating to the £100 million gross annual cost savings in 2014 on track. Continue to pursue initiatives to improve efficiency further

· New customer propositions and refreshed advertising campaigns for Direct Line, Churchill and Green Flag

· Good growth in the International division, particularly Germany, and Commercial full-cycle eTrading now live

Merrill Lynch Buy 211.80 220.00 235.00 Upgrades

StockMarketWire.com
Direct Line Insurance Group will announce its results for the six months to the end of June will be released on 2 August 2013.

Exane BNP Paribas Neutral 221.10 225.80 - 233.00 Reiterates

Half Yearly report

Sale of Direct Line Life & proposed capital return

Direct Line Insurance Group plc ("Company"), the holding company of the "Direct Line Group" (or the "Group"), announces that it has reached a binding agreement with Chesnara plc ("Chesnara") for the sale of Direct Line Group's UK closed life insurance business, Direct Line Life Insurance Company Limited ("DLL").

Total sale proceeds of £62 million, which include a pre-closing dividend of £23 million, represent 85% of the embedded value of DLL at 30 June 2013. In the financial year ended 31 December 2012, DLL reported a profit after tax of £6.9 million. Direct Line Group is expecting to recognise a gain on disposal of approximately £12 million. The transaction is conditional on the approval of Chesnara shareholders and of relevant regulatory authorities, which is currently expected within 60 business days.

The proceeds of the sale of DLL represent inorganic capital generation and the Company's Board of Directors believes that in this instance it is appropriate to return the sale proceeds to shareholders. Assuming the sale completes as expected, the Board intends to declare a special interim dividend of 4.0 pence per share shortly after completion of the sale. The sale of DLL and the proposed subsequent dividend are not expected to have a material impact on Direct Line Group's capital position.
Separately, the Group is reviewing opportunities to offer its customers access to appropriate life products and is currently testing a distribution only 'white-label' pilot for term assurance.

Direct Line Insurance Group plc

Direct Line Insurance Group plc (Direct Line Group) is headquartered in Bromley, Kent; it has operations in the UK, Germany and Italy.

Through its number of well known brands Direct Line Group offers a wide range of general insurance products to consumers. These brands include; Direct Line, Churchill and Privilege. It also offers insurance services for third party brands through its Partnerships division. In the commercial sector, its NIG and Direct Line for Business operations provide insurance products for businesses via brokers or direct respectively.

In addition to insurance services, Direct Line Group continues to provide support and reassurance to millions of UK motorists through its Green Flag breakdown recovery service and TRACKER stolen vehicle recovery and telematics business.

3rd Quarter Results

Financial highlights

· Operating profit1 of £417.8 million for the first nine months of 2013, up 20.1% (first nine months 2012: £347.9 million)

· Operating profit1 of £131.2 million for the third quarter of 2013, up 6.1% (third quarter 2012: £123.7 million)

· Gross written premium1 4.3% lower for the first nine months of 2013, reflecting competitive market conditions in UK personal lines, partially offset by growth in International and Commercial

· Combined operating ratio1,2 of 95.4% for the first nine months of 2013, an improvement of 4.3 percentage points against the same period last year (99.7%) arising from improved underwriting, including lower costs, as well as fewer claims from major weather events

· Annualised return on tangible equity3 from ongoing operations of 16.8% for the first nine months of 2013 (first nine months 2012: 10.6% and pro forma4 13.5%). Annualised RoTE normalised for claims from major weather events of approximately 15%5

· Net asset value per share of 187.9 pence and tangible net asset value per share of 155.8 pence

Strategic and operational highlights

· Good progress across each of the Group's strategic priorities and towards its target of a 15% return on tangible equity and its full year 2013 target of a 98% combined operating ratio

· Improved customer propositions, including the roll-out of telematics products with one in five new Direct Line motor policies with drivers aged under 25 now including telematics

· Cost saving programmes progressing well and on track to meet target to reduce the cost base6 to approximately £1,000 million in 2014

· First stage of IT migration from RBS Group delivered with new data centres established which offer more flexibility to progress digital plans

· Announcement on 8 October for the sale of the UK closed life insurance business and intention to pay a special interim dividend of 4.0 pence per share following completion

Credit Suisse Outperform 228.90 - - Reiterates

Numis Buy 228.90 265.00 265.00 Retains

Direct Line Insurance Group has completed the sale of Direct Line Life Insurance Co to Chesnara. Direct Line Insurance says proceeds of the sale will be returned to shareholders via a special interim dividend of 4.0p per share.

Lovely sustained breakout.

Technically excelent, just look at the
lower indicators, couldnt ask for more
than that.

Gone long.......large position.

Further confirmation of breakout today....

Long may it continue!

hope the weather doesn't spoil the fun.