Novae Group scrapped its interim dividend after the company fell into a loss amid still challenging industry conditions, although it continued to make progress on its sale to AXIS Capital.
Nonetheless, according to analysts it continued to make headway in its efforts to return to the black and shed its unprofitable units.
The speciality insurance group saw its combined ratio worsen over the six months to 30 June from a restated first half 2016 level of 89.3% to 94.7%, excluding those businesses which it had already exited.
That drove the company to a loss before tax of £14.0m, in comparison to restated profits before tax of £65.3m for the comparable year-ago period.
"Our strategy since 2015 has been to re-engineer our underwriting portfolio in the face of a deteriorating soft market which has tested even the largest industry players, and our result for H1 2017 should be seen in that context," said Novae boss Matthew Fosh.
Including the aforementioned units, the combined ratio rose even more steeply, from 95.7% to 101.6%. However, analysts at ShoreCap said the combined ratio of 94.7% excluding the exited lines of business was "robust" and compared favourably to the 128.4% CoR at its Exited Division.
Adding to the pain, foreign exchange
losses amounted to £10.1m, versus a gain of £25.9m one year ago, while investment income declined from £28.4m in the comparable period of 2016 to £17.3m. Nevertheless, Novae said its first half performance on this front had in fact exceeded its plans.
Gross written premiums grew by 16.7% to £598.8m or by 6.8% at constant exchange rates.
However, rising gross premiums at its Property and MAPS divsions were offset by falling premiums in a number of poorer performing classes, the company said in a statment.
AIM-listed Novae also incurred extraordinary charges of £1.7m during the period as opposed to none in 2016.
Regarding the cash offer tabled by AXIS Capital on 5 July, management said "significant progress" was being made with respect to a transaction and that completion was expected to take place in the last quarter of 2017.
"With the stock trading at a c50% premium to the end June 2017 NTAV of 474p we recommend that investors accept Axis' bid of 700p and move on. We do not anticipate a counterbid or an increased offer from Axis," said ShoreCap's Eamonn Flanagan.
As of 1505 BST shares
of Novae were edging lower by 0.14% to 704.0p.