From the AFR, Genworth has launched its IPO:
Lead broker Goldman Sachs said the Australian business was worth $1.9 billion to $2.4 billion, or 0.8-to-1-times the company’s book value.
It forecast Genworth to record $235 million net profit after tax in the 2014 financial year, and said the valuation implied an eight-to-10-times on a price-to-earnings basis.
…Goldman Sachs said Genworth had been able to increase prices in four of the past six years, which had driven a significant increase in the return generated by policies written since 2010.
That’s the main argument in favour of the business. It has a lot of pricing power as a duopoly. However, as I’ve said before, this baby is for the wild at heart given it insures the highest risk mortgages in Australian housing. The Australian operations data is available here.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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