Our opinion on the current state of CLIENTELE(CLI)Clientele Life (CLI) is a small insurance company selling short- and long-term policies and underwriting insurance products. Their products are sold through agents and brokers as well as through tele-sales.
On 3rd November 2023, the company announced that it had acquired 1Life Insurance for R1,914bn, to be paid by issuing 117,815,756 ordinary shares in Clientele.
In its results for the year to 30th June 2024, the company reported headline earnings per share (HEPS) and net profit down 4%. The company said, "The total net insurance service result increased by 4% to R171.6 million. The total net investment result of R254.9 million is double the prior year figure. Net insurance finance income is 19% higher than the prior year at R207.3 million. Revenue from contracts with customers increased by 11% to R380.4 million."
In a trading statement for the six months to 31st December 2024, the company estimated that HEPS would increase by between 2% and 17%. The company said, "...shareholders are encouraged to appreciate the noteworthy impact of the once-off recognition of a bargain purchase gain of R469 million arising from the fair value measurement at the date of acquisition of 1Life."
The share trades on a P:E of 12,7, which seems cheap to us. The share is heavily traded enough for most private investors. In our opinion, this share continues to represent reasonable value at the current P:E. It should benefit directly as and when the South African economy improves as a result of the newly appointed government of national unity (GNU).
CLI trade ideas
Our opinion on the current state of CLIENTELE(CLI)Clientele Life (CLI) is a small insurance company that offers short- and long-term policies and underwrites insurance products. These products are sold through agents, brokers, and tele-sales. On 3rd November 2023, the company announced its acquisition of 1Life Insurance for R1.914 billion, paid through the issuance of 117,815,756 ordinary shares in Clientele.
In its results for the year ending 30th June 2024, Clientele reported a 4% decline in headline earnings per share (HEPS) and net profit. The company stated, "The total net insurance service result increased by 4% to R171.6 million. The total net investment result of R254.9 million is double the prior year figure. Net insurance finance income is 19% higher than the prior year at R207.3 million. Revenue from contracts with customers increased by 11% to R380.4 million."
Clientele Life trades at a price-to-earnings (P/E) ratio of 10.3, which appears relatively cheap. The share is also heavily traded enough to accommodate most private investors. In our view, the share continues to offer reasonable value at this P/E ratio. It stands to benefit from an improving South African economy, particularly with the formation of the newly appointed government of national unity (GNU).
Our opinion on the current state of CLIENTELE(CLI)Clientele Life (CLI) is a small insurance company that sells short- and long-term policies and underwrites insurance products. Their offerings are distributed through agents, brokers, and tele-sales. On 3rd November 2023, the company announced its acquisition of 1Life Insurance for R1.914 billion, to be paid through the issuance of 117,815,756 ordinary shares in Clientele.
In its results for the six months ending 31st December 2023, Clientele reported a 35% drop in headline earnings per share (HEPS) and a return on shareholders' interest of 9%. The company stated, "Insurance revenue is 5% lower than the previous period at R972.5 million (2022: R1 billion), mainly as a result of a lower release of the Contractual Service Margin ("CSM") and Risk Adjustment ("RA"). Higher than expected withdrawal experience in the 2023 financial year ending 30 June 2023 resulted in a downward adjustment to the CSM compared to the restated prior period."
In a trading statement for the year ending 30th June 2024, the company estimated that HEPS would fall by between 30% and 35%. However, the company noted, "As a counterpart to the negative variances above, the impact of IFRS 17 is also expected to result in an increase in the Group's Net Asset Value to between R1.8 billion and R2.4 billion. The Group remains in a sound solvency and liquidity position and has continued to generate strong positive cash flows."
The share trades on a price-to-earnings (P/E) ratio of 10.2, which seems reasonably priced. The share is also actively traded enough to attract private investors. In our view, Clientele Life continues to represent good value at the current P/E ratio and is well-positioned to benefit from any improvement in the South African economy, especially in light of the newly appointed government of national unity (GNU).
Our opinion on the current state of CLIClientele Life (CLI) operates as a small insurance company, offering both short- and long-term policies and underwriting insurance products. Their distribution channels include agents, brokers, and tele-sales.
A significant development for the company was its acquisition of 1Life Insurance for R1.914 billion, to be paid through the issuance of 117,815,756 ordinary shares in Clientele. This acquisition likely aimed to expand Clientele's market reach and product offerings.
However, in its financial results for the six months ending December 31, 2023, Clientele reported a decline in headline earnings per share (HEPS) by 35%. The company attributed this decrease to lower insurance revenue, which was down 5% compared to the previous period. This decline was mainly due to a lower release of the Contractual Service Margin (CSM) and Risk Adjustment (RA), driven by higher-than-expected withdrawal experience.
Despite the decline in earnings, the company's price-to-earnings (P/E) ratio stands at 6.6, which appears cheap relative to its earnings. This may present an opportunity for investors seeking undervalued stocks. Moreover, the share is traded heavily enough to accommodate most private investors.
Overall, Clientele Life may offer reasonable value at its current P/E ratio, especially considering its potential to benefit from improvements in the South African economy. However, investors should carefully consider the impact of the acquisition of 1Life Insurance and monitor the company's financial performance and market position.
Our opinion on the current state of CLIClientele Life (CLI) operates as a small insurance company specializing in the sale of short- and long-term policies and underwriting insurance products. The company distributes its products through agents, brokers, and tele-sales channels.
In its financial results for the year ending 30th June 2023, Clientele Life reported a 15% increase in headline earnings per share (HEPS) and achieved a return on average shareholders' interest of 43%. Additionally, the company attained a return on embedded value of 12%. Clientele Life highlighted the challenging trading environment marked by factors such as low economic growth, persistent load-shedding, and difficulties in premium collections.
On 3rd November 2023, Clientele Life announced the acquisition of 1Life Insurance for R1.914 billion, to be funded by issuing 117,815,756 ordinary shares in Clientele. Despite anticipating a decline in HEPS ranging between 37% and 57% in the trading statement for the six months ending 31st December 2023, the company emphasized its sound solvency and liquidity position, with continued strong positive cash flows.
Trading at a price-to-earnings (P:E) ratio of 7.8, the company's shares appear attractively priced. Moreover, Clientele Life's shares witness sufficient trading activity to accommodate most private investors. From our perspective, the current valuation offers reasonable value, with potential for direct benefits as the South African economy shows signs of improvement. Investors should consider these factors when evaluating investment opportunities in Clientele Life.
Our opinion on the current state of CLIClientele Life (CLI) is a small insurance company selling short- and long-term policies and underwriting insurance products. Their products are sold through agents and brokers as well as by tele-sales. In its results for the year to 30th June 2023 the company reported headline earnings per share up 15% and a return on average shareholders’ interest of 43%. The return on embedded value was 12%. The company said that the trading environment was characterised by a "...backdrop of a continuing challenging trading environment, characterised by low economic growth, ongoing load-shedding and challenges in the premium collections environment". On 3rd November 2023 the company announced that it had acquired 1Life Insurance for R1,914bn to be paid by the issue of 117,815,756 ordinary shares in Clientele. The share trades on a P:E of 7,49 which seems cheap to us. The share is heavily traded enough for most private investors. In our opinion, this share represents reasonable value at the current P:E. It should benefit directly as the South African economy improves.
CLIENTELE LTD - Monthly Observation In the search for alpha, CLI pops up with a 13.5% return so far year to date.
Monthly candles continuing to push new highs. Price will need to remain above R10 support level.
-- MANAGE YOUR RISK - -
Disclaimer: All ideas are my opinion and should not be taken as financial advice.