Final Results

FBD Holdings PLC 7 March 2000 FBD HOLDINGS PLC PRELIMINARY ANNOUNCEMENT RESULTS FOR THE YEAR ENDED 31ST DECEMBER 1999 1999 1998 HIGHLIGHTS - EURO Euro 000's Euro 000's - Gross premiums written 179,800 157,006 +14.5% - Operating profit 20,198 15,992 +26.3% - Operating earnings per share 39.08c 31.91c +22.5% - Dividend per share 15.00c 13.15c +14.1% 1999 1998 IR£000's IR£000's HIGHLIGHTS - IR£ - Gross premiums written 141,604 123,652 +14.5% - Operating profit 15,907 12,595 +26.3% - Operating earnings per share 30.78p 25.13p +22.5% - Dividend per share 11.81346p 10.35673p +14.1% Commenting on the results, Paul O'Callaghan, Chief Executive, stated: 'We achieved excellent results during 1999, with Operating Profits up by 26.3% to Euro 20.2m. (IR£15.9m.). An improved underwriting result supported by 14.5% growth in gross premiums written, contributed significantly. We are confident of maintaining and growing our strong indigenous presence in the Irish insurance market'. 7th March 2000 For Reference Telephone No. FBD Paul O'Callaghan, Chief Executive Philip Fitzsimons, Deputy Chief Executive 353 1 409 3200 MURRAY CONSULTANTS Joe Murray/Geraldine Kearney 353 1 6614666 FBD HOLDINGS PLC PRELIMINARY ANNOUNCEMENT FBD Holdings plc is pleased to announce excellent operating results for the year ended 31st December 1999. Profit & Loss Account The Profit & Loss Account for the period has been prepared in accordance with FRS3 'Reporting Financial Performance: Insurance Companies' and in accordance with the SORP 'Accounting for Insurance Business'. (See Accounts Preface Note on page 4). Results for previous accounting periods have been restated on the new basis for comparison purposes. Operating Profits Operating Profits increased significantly from Euro 16.0m. (IR£12.6m.) in 1998 to Euro 20.2m. (IR£15.9m.), a rise of 26.3%. The key feature of the strong profit result was the improvement in our Technical Insurance Account. Our 1999 Technical Insurance Result, Euro 6.6m. (IR£5.2m.), is considerably ahead of the corresponding 1998 figure, Euro 3.8m. (IR£3.0m.). This arises from a much improved underwriting performance which exceeded reduced investment returns attributable to the Account. Our overall underwriting result improved by Euro 4.7m.(IR£3.7m.). An increase in the property contribution of Euro 5.2m. (IR£4.1m.) was offset by a decrease of Euro 1.7m. (IR£1.3m.) on our liability account. This decrease reflects the industry wide trend of increasing public liability claims costs. Our motor underwriting results were similar to 1998. Gross Premiums Written, Euro 180m.(IR£142m.), were up 14.5% on 1998. The increase occurred across all insurance classes, reflecting new business growth, higher insured values and revised premium rates in selected risk categories. Our house insurance portfolio grew substantially in urban areas along with our retail business account. From a small base in 1998, our Dublin business also showed strong growth. Net cash flow from operating activities grew strongly, generating Euro 69m (IR£54m) compared with Euro 39m (IR£31m) previously. Other Income less Charges, Euro 9.4m (IR£7.4m.), is up 16.8% on the previous year's figure. This Income is generated from our insurance/assurance broking operations, our IFSC activities and our property investments. Our most recent property investments in Ireland are in the IFSC, namely Enterprise House, which has been completed and fully let, and Guild House which is nearing completion and is substantially pre-let. Our Spanish investments, Sunset Beach Club and La Cala Resort had a very successful year. The lower interest rates and lower equity returns that prevailed in financial markets throughout 1999 resulted in reduced investment returns of Euro 30.3m. (IR£23.9m.) compared to Euro 32.9m. (IR£25.9m.) in 1998. The downturn in Irish financial stocks and gilts in 1999 was offset by the strong operating performance of the Group ensuring minimal impact on post dividend net asset value. Most of the substantial 30% gain in net assets achieved in the previous year was retained and net assets per share at year end were 3.4% lower at 329.7 cents (259.7p). Dividend In keeping with the Board's progressive dividend policy, the Directors are recommending a final dividend of 8.5c (IR 6.694294p) per share. It is to be paid on the 28th April 2000 to Shareholders on the Company's register at close of business on the 17th March 2000. The final dividend is subject to Witholding Tax (DWT) except for Shareholders who are exempt from DWT and have furnished a properly completed Composite Resident Form to the Company's Registrar. Together with the interim dividend of 6.5c (IR 5.119166p), total dividends amount to 15.0c (IR11.81346p), an increase of 14.1%. Outlook Following recent merger activity in the Irish market, driven by international consolidations, FBD Insurance is the only significant Irish owned and controlled insurance company operating in the domestic market. Over the 30 years of FBD's existence, its singular focus on meeting customer needs has enabled it to grow profitably amidst all of the market consolidations that have occurred over the period. While we continuously review and revise our plans where necessary, in light of changes in the industry, we are confident of maintaining and growing the strong and vital indigenous presence that we represent in the Irish insurance market. The Group is pursuing a clearly defined growth strategy and is investing the necessary resources in infrastructure, staff and business processes to ensure that we deliver on our objectives. Customer care is the hallmark of how we do business at FBD Head Office and throughout our network of 50 local offices. We are continuing to enhance this network and will open our first Dublin city centre office later this year. We currently provide a 1850 telephone service, 24 hours a day, 7 days a week and have had a presence on the Internet for over 12 months. Our E-Commerce offering is under review at present and we see its further development as a key element in our continued growth and success. Each of our businesses have maintained strong trading performances in the year to date and we are confident that the consistent growth levels we have achieved over the years will continue in the future. PREFACE NOTE TO ACCOUNTS FOR YEAR ENDED 31ST DECEMBER 1999 The Profit & Loss Account on page 5 is prepared in accordance with FRS3 'Reporting Financial Performance: Insurance Companies', and in accordance with the SORP 'Accounting for Insurance Business' published in January 1999. Accordingly results for prior accounting periods have been restated: - Unrealised gains/losses on investments are now accounted for in the Profit & Loss Account. - Operating Profits are arrived at using a long-term rate of return on investments. - Short-term fluctuations are calculated and incorporated as an adjustment figure in arriving at profit before taxation. Set out below is a table reconciling profit before taxation as historically reported and operating profit on the new basis. Year Year Year Year Ended Ended Ended Ended 31/12/99 31/12/98 31/12/97 31/12/96 IR£000 IR£000 IR£000 IR£000 Profit before taxation as previously reported. 19,669 16,693 14,250 14,674 Unrealised (losses)/gains on investments: Insurance (26,374) 21,242 9,694 2,902 Non Insurance 1,009 1,155 - - (Loss)/profit before taxation - new basis. (5,696) 39,090 23,944 17,576 Short-term fluctuation in investment return. 21,603 (26,495) (17,310) (6,818) Operating profit - new basis. 15,907 12,595 6,634 10,758 Representative bodies of the insurance industry believe that this new accounting presentation, which reduces the impact of market volatility on investment returns by including them in Operating Profit on a longer term basis, gives a more realistic picture of the ongoing operating performance. IRISH POUNDS GROUP PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 1999 1999 1998 IR£000's IR£000's Turnover 181,113 166,903 Balance on the technical account - general business 5,173 3,012 Investment income 23,914 25,854 Unrealised (losses) / gains on investments (26,374) 21,242 Allocated investment return transferred to the general business technical account (15,804) (17,348) Other income 8,638 8,904 Other charges (1,243) (2,574) Operating profit 15,907 12,595 Short term fluctuations (21,603) 26,495 in investment return (Loss)/ profit before taxation (5,696) 39,090 Taxation 6,115 (7,015) ______ ______ Profit after taxation 419 32,075 Minority interests (161) (60) ______ ______ Profit after taxation and minority interests 258 32,015 Dividends (5,155) (4,505) ______ ______ Retained (loss)/ profit (4,897) 27,510 ====== ====== Pence Pence Operating earnings per 50p ordinary share based on longer term investment return 30.78 25.13 ===== ====== Earnings per 50p 0.06 77.22 ordinary share ===== ===== Dividends per 50p ordinary share 11.81346 10.35673 ======== ======== Net assets per 50p ordinary share 259.7 268.8 ===== ===== IRISH POUNDS GROUP BALANCE SHEET AS AT 31ST DECEMBER 1999 1999 1998 IR£000's IR£000's ASSETS Investments 441,786 432,285 Reinsurers' share of technical provisions 30,226 44,392 Debtors 21,576 22,785 Other assets 22,525 23,070 Prepayments and accrued income 12,524 10,770 ______ ______ TOTAL ASSETS 528,637 533,302 LIABILITIES Technical provisions (385,177) (372,719) Provision for other risks and charges (6,154) (13,948) Creditors (24,126) (29,885) ________ _______ NET ASSETS 113,180 116,750 ====== ======= CAPITAL AND RESERVES Ordinary share capital 20,760 20,697 Share premium 3,746 3,623 Reserves 83,337 86,930 ______ ______ ORDINARY SHAREHOLDERS' FUNDS 107,843 111,250 Preference share capital 2,436 2,436 Minority interests 2,901 3,064 ______ ______ 113,180 116,750 ======= ======= IRISH POUNDS GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER 1999 1999 1998 IR£000's IR£000's Net cash inflow from operating activities 53,968 30,629 Dividends paid (4,805) (4,110) Corporation tax paid (1,910) (1,843) Capital expenditure (2,556) (1,971) Financing (11,812) 1,081 _______ _______ 32,885 23,786 ======= ======= Cash flows were invested as follows (Decrease)/increase in cash holdings (1,115) 1,804 ______ ______ Net portfolio investment Quoted shares (578) 17,228 Quoted debt 80,800 31,754 securities Unquoted shares 399 609 Deposits with banks (67,683) (25,322) Loans and advances 4,809 (5,533) Land and property 16,287 3,468 Leases (34) (222) ______ ______ 34,000 21,982 ______ ______ Net investment of cash flows 32,885 23,786 ====== ====== IRISH POUNDS STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31ST DECEMBER 1999 1999 1998 IR£000's IR£000's Retained (loss) / profit (4,897) 27,510 Exchange translation adjustment 1,304 (1,823) ______ ______ Total (losses)/ gains recognised in year (3,593) 25,687 ====== ====== RECONCILIATION OF MOVEMENT IN ORDINARY SHAREHOLDERS' FUNDS FOR THE YEAR ENDED 31ST DECEMBER 1999 1999 1998 IR£000's IR£000's Profit after taxation and minority interests 258 32,015 Less: preference dividends (235) (209) ______ ______ 23 31,806 Dividends (4,920) (4,296) New share capital issued 186 564 Other recognised gains/(losses) 1,304 (1,823) ______ ______ (3,407) 26,251 Ordinary shareholders' funds at beginning of year 111,250 84,999 ______ ______ Ordinary shareholders' funds at end of year 107,843 111,250 ======= ======= IRISH POUNDS TECHNICAL RESULT BY CLASS OF BUSINESS YEAR ENDED 31ST DECEMBER 1999 Net Net Net Op Earned Claims Expenses Premiums Incurred IR£000's IR£000's IR£000's Direct insurance Motor 72,978 (73,361) (11,678) Liability 19,672 (26,170) (3,273) Fire & Property 22,299 (12,230) (1,895) Other 2,280 (1,864) (295) ______ _______ _______ Total direct 117,229 (113,625) (17,141) insurance Reinsurance acceptances 599 2,633 (326) ______ ______ ______ Total 117,828 (110,992) (17,467) ======= ======= ======== IRISH POUNDS TECHNICAL RESULT BY CLASS OF BUSINESS YEAR ENDED 31ST DECEMBER 1999 Underwriting Allocated Technical Result Inv Result Income IR£000's IR£000's IR£000's Direct insurance Motor (12,061) 9,085 (2,976) Liability (9,771) 4,395 (5,376) Fire & Property 8,174 1,210 9,384 Other 121 157 278 ______ ______ ______ Total direct insurance (13,537) 14,847 1,310 Reinsurance acceptances 2,906 957 3,863 ______ ______ _______ Total (10,631) 15,804 5,173 ======= ====== ====== YEAR ENDED 31ST DECEMBER 1998 Net Net Net Op Earned Claims Expenses Premiums Incurred IR£000's IR£000's IR£000's Direct insurance Motor 65,744 (67,572) (10,237) Liability 17,879 (23,451) (2,936) Fire & Property 19,735 (13,715) (1,934) Other 1,950 (1,835) (312) _____ _______ ______ Total direct insurance 105,308 (106,573) (15,419) Reinsurance acceptances 1,421 932 (5) ______ ______ _______ Total 106,729 (105,641) (15,424) ======= ======== ======= YEAR ENDED 31ST DECEMBER 1998 Underwriting Allocated Technical Result Inv Result Income IR£000's IR£000's IR£000's Direct insurance Motor (12,065) 9,664 (2,401) Liability (8,508) 4,558 (3,950) Fire & Property 4,086 1,305 5,391 Other (197) 159 (38) ______ ______ ______ Total direct insurance (16,684) 15,686 (998) Reinsurance acceptances 2,348 1,662 4,010 ______ ______ ______ Total (14,336) 17,348 3,012 ===== ===== ===== EUROS GROUP PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 1999 1999 1998 Euro 000's Euro 000's Turnover 229,966 211,923 Balance on the technical account - general business 6,568 3,824 Investment income 30,365 32,828 Unrealised (losses)/ gains on investments (33,488) 26,972 Allocated investment return transferred to the general business technical account (20,067) (22,027) Other income 10,968 11,306 Other charges (1,578) (3,269) Operating profit 20,198 15,992 Short term fluctuations in investment return (27,430) 33,642 (Loss)/ profit before taxation (7,232) 49,634 Taxation 7,764 (8,907) ______ ______ Profit after taxation 532 40,727 Minority interests (204) (76) ______ ______ Profit after taxation and minority interests 328 40,651 Dividends (6,546) (5,720) ______ ______ Retained (loss) / protis (6,218) 34,931 ====== ====== Cents Cents Operating earnings per 50p ordinary share based on longer term investment return 39.08 31.91 ===== ===== Earnings per 50p ordinary share 0.08 98.05 ===== ===== Dividends per 50p ordinary share 15.00 13.15 ===== ===== Net assets per 50p ordinary share 329.8 341.3 ===== ===== EUROS GROUP BALANCE SHEET AS AT 31ST DECEMBER 1999 1999 1998 Euro 000's Euro 000's ASSETS Investments 560,953 548,889 Reinsurers' share of technical provisions 38,379 56,366 Debtors 27,396 28,931 Other assets 28,601 29,293 Prepayments and accrued income 15,902 13,675 _____ _____ TOTAL ASSETS 671,231 677,154 LIABILITIES Technical provisions (489,074) (473,256) Provision for other risks and charges (7,814) (17,710) Creditors (30,634) (37,946) ______ ______ NET ASSETS 143,709 148,242 ====== ======= CAPITAL AND RESERVES Ordinary share capital 26,360 26,280 Share premium 4,756 4,600 Reserves 105,816 110,378 _______ _______ ORDINARY SHAREHOLDERS' FUNDS 136,932 141,258 Preference share capital 3,093 3,093 Minority interests 3,684 3,891 ______ ______ 143,709 148,242 ===== ===== EUROS GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER 1999 1999 1998 Euro 000's Euro 000's Net cash inflow from operating activities 68,525 38,890 Dividends paid (6,101) (5,219) Corporation tax paid (2,425) (2,340) Capital expenditure (3,246) (2,502) Financing (14,998) 1,373 ______ _____ 41,755 30,202 ===== ===== Cash flows were invested as follows (Decrease)/increase in cash holdings (1,416) 2,291 ______ ______ Net portfolio investment Quoted shares (734) 21,875 Quoted debt securities 102,595 40,319 Unquoted shares 507 773 Deposits with banks (85,940) (32,152) Loans and advances 6,106 (7,025) Land and property 20,680 4,403 Leases (43) (282) ______ ______ 43,171 27,911 ______ ______ Net investment of cash flows 41,755 30,202 ===== ===== EUROS STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31ST DECEMBER 1999 1999 1998 Euro 000's Euro 000's Retained (loss) / profit (6,218) 34,931 Exchange translation adjustment 1,656 (2,315) _____ _____ Total (losses)/ gains recognised in year (4,562) 32,616 ===== ===== RECONCILIATION OF MOVEMENT IN ORDINARY SHAREHOLDERS' FUNDS FOR THE YEAR ENDED 31ST DECEMBER 1999 1999 1998 Euro 000's Euro 000's Profit after taxation and minority interests 328 40,651 Less: preference dividends (299) (265) _____ _____ 29 40,386 Dividends (6,247) (5,455) New share capital issued 236 715 Other recognised gains/(losses) 1,656 (2,315) ______ ______ (4,326) 33,331 Ordinary shareholders's funds at beginning of year 141,258 107,927 _______ _______ Ordinary shareholders' funds at end of year 136,932 141,258 ====== ====== EUROS TECHNICAL RESULT BY CLASS OF BUSINESS YEAR ENDED 31ST DECEMBER 1999 Net Earned Net Claims Net Op Premiums Incurred Expenses Euro 000's Euro 000's Euro 000's Direct insurance Motor 92,663 (93,149) (14,828) Liability 24,978 (33,229) (4,156) Fire & Property 28,314 (15,529) (2,406) Other 2,895 (2,367) (375) ______ ______ ______ Total direct insurance 148,850 (144,274) (21,765) Reinsurance acceptances 761 3,343 (414) ______ ______ ______ Total 149,611 (140,931) (22,179) ====== ======= ====== EUROS TECHNICAL RESULT BY CLASS OF BUSINESS YEAR ENDED 31ST DECEMBER 1999 Underwriting Allocated Technical Result Inv Income Result Euro 000's Euro 000's Euro 000's Direct insurance Motor (15,314) 11,536 (3,778) Liability (12,407) 5,581 (6,826) Fire & Property 10,379 1,536 11,915 Other 153 199 352 _____ _____ _____ Total direct insurance (17,189) 18,852 1,663 Reinsurance acceptances 3,690 1,215 4,905 _____ _____ _____ Total (13,499) 20,067 6,568 ===== ===== ===== YEAR ENDED 31ST DECEMBER 1998 Net Earned Net Claims Net Op Premiums Incurred Expenses Euro 000's Euro 000's Euro 000's Direct insurance Motor 83,478 (85,798) (12,999) Liability 22,702 (29,777) (3,728) Fire & Property 25,058 (17,415) (2,456) Other 2,476 (2,330) (396) ______ ______ ______ Total direct insurance 133,714 (135,320) (19,579) Reinsurance acceptances 1,804 1,184 (6) ______ _____ _____ Total 135,518 (134,136) (19,585) ===== ===== ===== YEAR ENDED 31ST DECEMBER 1998 Underwriting Allocated Technical Result Inv Income Result Euro 000's Euro 000's Euro 000's Direct insurance Motor (15,319) 12,271 (3,048) Liability (10,803) 5,787 (5,016) Fire & Property 5,187 1,657 6,844 Other (250) 202 (48) ______ _____ _____ Total direct insurance (21,185) 19,917 (1,268) Reinsurance acceptances 2,982 2,110 5,092 _____ _____ _____ Total (18,203) 22,027 3,824 ===== ===== =====

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