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Monday, March 27, 2023

Panda founder adds to FBD stake after insurer upgrades profit outlook

Panda Waste founder Eamon Waters has increased his stake in FBD Group to 12pc, continuing to build a position in the Dublin-listed insurer that has already delivered stellar returns for him.

retaw Private Equity, Mr Waters’ personal investment vehicle, acquired control of an additional 1.91pc of FBD on Friday, mainly through the purchase of ordinary shares, according to stock market filings.

He now owns 10.45pc of the company outright and controls another 1.55pc indirectly via contracts for difference, derivative instruments that allow the holder to profit from price movements in the underlying asset without having to own it.

Mr Waters’ aggressive buying over the last year has given him an investment in FBD worth €59m and a potentially influential holding in the tightly held stock.

His latest purchase coincided with the partial sell down of Protector Forsikring’s position from 9pc to 7.56pc.

The Norwegian insurance company, which rapidly built a large stake in FBD in 2021 as other shareholders sold out of frustration with the lack of dividends, has been reducing its exposure in the stock in recent months.

It had increased its holding in FBD to 10.2pc last January just before a positive earnings update by the group sent shares soaring by 22pc to €10.30. At the time it was the second-largest shareholder, a position now held by Sretaw.

FBD shares traded as high as €14 on Friday, meaning Protector booked a tidy profit on the deal. The company said in 2021 that it was a financial investor in FBD and was not interested in acquiring the Irish insurer.

Last month FBD surprised the market with a trading update indicating annual profits for 2022 would hit €70, more than twice analyst expectations.

The group also said it would establish consistent dividend payments before considering a larger return of capital in the form of buybacks.

FBD attributed its performance was due to lower claims frequency and benign weather conditions.

This is the second year in a row that FBD has delivered a positive earnings surprise and came despite investment losses of €10m and a steep writedown of €90m on FBD’s bond portfolio, indicating a robust commercial performance for the insurer.

The update prompted a price target upgrade by Davy to €15 a share.

Mr Waters sold Beauparc Utilities, the owner of Panda, to Australia’s Macquarie Infrastructure Fund in 2021 for €1.4bn.

Soon after, he began rolling his gains into new investments, including FBD and Dublin-listed hotel operator Dalata.

Sretaw’s first notified an interest in FBD at the end of July 2022, when it reported owning just over 5pc of the company. The firm accelerated its stakebuilding in the following months, spending millions to lift its increase its position to 10.1pc from 6pc during September.

At the time, shares in FBD were hovering at just over €10, meaning the value has increased by nearly 40pc in just six months.

Mr Waters has had a similar run in Dalata, where Sretaw owns 2.83pc through ordinary shares and derivatives.

FBD publishes its 2022 earnings report this Friday.

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