Final Results
FBD Holdings PLC
05 March 2003
PRELIMINARY ANNOUNCEMENT
RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2002
2002 2001
HIGHLIGHTS €000's €000's
• Gross premiums written
325,809 247,959 +31.4%
• Operating profit 37,531 30,184 +24.3%
cent cent
• Operating earnings per share 75.34 59.59 +26.4%
• Dividend per share 22.00 19.50 +12.8%
• Net assets per share 510.13 485.51 +5.1%
Commenting on the results, Paul O'Callaghan, Chief Executive, stated:
'Strong performances across all areas of Group activity have produced excellent
operating results. Gross premium written increased by 31.4 per cent to €325.8m,
reflecting the competitiveness of our product offerings in the market. Operating
profit and earnings have grown strongly following an improved underwriting
performance. After years of substantial losses, motor underwriting appears to
have benefited from the positive initiatives introduced by the Industry and the
Government. We are confident of strengthening and consolidating all of our
businesses further in the current year.'
ENDS 5th March 2003
For Reference Telephone No.
FBD
Paul O'Callaghan, Chief Executive
Philip Fitzsimons, Deputy Chief Executive 01 409 3200
Murray Consultants
Joe Murray/ 01 498 0300
Geraldine Kearney
FBD HOLDINGS PLC
PRELIMINARY ANNOUNCEMENT
FBD Holdings plc announces a 24 per cent increase in Operating Profits at €37.5m
for the year ended December 31st, 2002, compared with €30.2m in the previous
year. This improvement was helped by a reduction in Underwriting Losses which
fell from €15.1m to €5.3m. This is reflected in an increase in profit on the
technical insurance account from €9.7m in 2001 to €22.0m in the year ended
December 2002. The latter account also benefited from an increase in
attributable investment income, up €2.5m at €27.3m
Gross premiums written increased by 31.4 per cent to €325.8m. This substantial
growth reflects strong flows of new business from the small to medium sized
business sector and from the home insurance market.
Operating earnings per share rose by 26.4 per cent to 75.34c.
A final dividend of 12.9c per share is being recommended which combined with the
interim dividend amounts to 22c, up 12.8% on 2001.
Insurance Underwriting
Underwriting losses reduced by €9.8m to €5.3m. This arises from a reduction in
losses on motor of €12.1m to €10.2m and a €3.4m improvement in the contribution
from property. The reduction in motor losses is encouraging against a background
of losses totalling €93.8m in the previous 5 years. Liability underwriting
losses continued to increase, rising €3.3m.
FBD's experience in motor reflects the positive impact of the initiatives
introduced by both the Insurance Industry and the Government to tackle the
underlying causes of poor underwriting results. This trend must continue to
achieve any long term effect on motor underwriting performance. With investment
returns unlikely to revert to historic highs, the focus on lowering the claims
loss ratio will continue.
Other Financial Services
The contribution of the Group's other financial services businesses, which
include FBD Brokers, Abbey Finance, FBD Securities, FBD Life and FBD IFSC,
amounted to €3.3m., an increase of 32% on 2001. A feature of the past year was
the success of FBD Brokers in overcoming some of the difficulties which
underwriting capacity shortfalls created for all brokers of large industrial,
commercial and corporate risks.
Property/Leisure
The Group's property and hotels/leisure division added €9.0m. (€10.1m. in 2001)
to the year's profits. This division includes the Tower Hotel Group in Ireland
and in Spain, Sunset Beach Hotel and La Cala Resort, in addition to property
development interests in Ireland and abroad. In September 2002 the Group
increased its shareholding in the Tower Hotel Group from 50% to 75%.
Accordingly, the Tower's post acquisition results have been consolidated into
the Group's figures for the year. The completion and hand over of 60 Los Altos
apartments at La Cala is scheduled for the first half of 2003
Balance Sheet
Total assets at year end exceeded €1bn., having grown by 23.9% from €877.9m. to
€1,087.8m. Ordinary shareholders' funds amounted to €208.9m. compared to
€202.0m. at the end of 2001. The growth in shareholders' funds has been set back
by the fall in equity values, despite the Group's strong operating performance.
The buy-back of Company shares in the open market also reduced shareholder net
equity by €3.6m. However, the share buy-back enhanced the net asset value of the
remaining shares. Net asset value per share was 510.13 cent at year-end.
Dividend
The excellent results enabled the Company to maintain its dividend growth policy
and accordingly, the Board is recommending a final dividend of 12.9 cent per
share. It will be paid on 2nd May 2003 to shareholders on the Company's Register
at the close of business on 14th March 2003. The final dividend is subject to
withholding tax (DWT) except for shareholders who are exempt from DWT and have
furnished a properly completed Composite Resident Form to the Company's
Register.
Together with the interim dividend of 9.10 cent, the total dividend per share
amounts to 22.0 cent, an increase of 12.8%.
Outlook
The Group continues to make significant progress in the current year and is
performing in line with targets.
The trend towards improved underwriting results, which emerged in 2002, augurs
well for the future. However, this is dependent on there being no repetition
within the industry of the unwarranted price cutting which occurred in past
cycles, to the ultimate detriment of insurers and customers. FBD is committed to
controlling costs as an essential element in keeping premium increases to the
economic minimum. Price stabilisation of motor insurance will depend on a
continuance of the positive experience, which has followed the introduction of
the penalty points system late last year. If the positive trend delivers
acceptable loss ratios, it is realistic to hope for reductions in premiums in
the short to medium term. An upturn in equity markets is also awaited after the
prolonged downward experience. This would benefit results significantly.
FBD will strengthen and consolidate further all of its businesses in the coming
year and is confident of maintaining its profitable growth record into the
future.
FBD Update
Insurance
• Key areas for continued growth for FBD Insurance will include:
• The Dublin market and larger urban centres where we now have an increased
presence.
• Small to medium sized businesses all around the country.
• The home insurance market where we are competitively priced.
• At year end, FBD employed 1,550 staff. Of these, 750 were employed in
insurance/financial services and the remainder employed in property/hotels/
leisure, in Ireland and abroad.
• FBD Insurance, with 50 branch offices nationwide, has the largest direct
distribution network of any insurer in Ireland. New premises in Drogheda and
Tralee are planned for 2003.
• The Dublin business unit of FBD Insurance has established itself as one of
the leading providers of insurance to SMEs in Dublin city. The unit
currently has 7 customer service executives in the field and plans are in
hand to expand the team.
• Diversification of FBD's customer base continued in 2002. Commercial
business represented 50% of premium income, with agri-related business and
home insurance representing 38% and 12% respectively.
• The IT networking of FBD's branch offices is now fully completed and has
enhanced the service we deliver to customers. Further developments designed
to maintain our reputation for personalised customer care are being
undertaken.
Property/Leisure
• The Tower Hotel, Waterford, has undergone a major refurbishment programme
over the past eighteen months.
• At Faithlegg House Hotel in Co. Waterford, major improvements to its 18
hole championship golf course were completed.
• At La Cala Resort on the Costa del Sol, work has commenced on the latest
residential building project - the Colinas del Golf 32 unit, villa and
townhouse development.
• Development of a third golf course at La Cala is proceeding according to
plan. The first 9 holes will be playable in October of this year, with the
remaining 9 holes scheduled to be available in October 2004.
• The final phase of a major renovation programme at Sunset Beach Hotel in
Benalmadena, Spain, was completed during the year and has attracted
increased interest from golf groups and families in Ireland and elsewhere.
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31ST DECEMBER 2002
2002 2001
€000's €000's
Turnover 421,612 342,604
====== ======
Balance on the technical account
- general business 22,015 9,667
Longer term investment return 30,293 27,878
Allocated investment return transferred to the general business technical
account (27,281) (24,755)
Other income 12,667 17,770
Other charges (163) (376)
_______ _______
Operating profit Note 1 37,531 30,184
Short term fluctuations in investment return (12,356) (1,502)
_______ _______
Profit before taxation 25,175 28,682
Taxation (4,206) (2,815)
_______ _______
Profit after taxation 20,969 25,867
Minority interests (627) (323)
_______ _______
Profit after taxation and minority interests 20,342 25,544
Dividends (9,243) (8,413)
_______ _______
Retained profit 11,099 17,131
====== ======
Cent Cent
Operating earnings per 60c ordinary share based on longer term investment
return 75.34 59.59
====== ======
Earnings per 60c ordinary share 48.76 60.47
====== ======
Dividend per 60c ordinary share 22.00 19.50
====== ======
Net assets per 60c ordinary share 510.13 485.51
====== ======
Note 1 - Operating profit by activity €000's €000's
Insurance/Reinsurance 25,340 17,635
Financial services 3,258 2,460
Property and Hotels/Leisure 8,933 10,089
_______ _______
37,531 30,184
====== ======
GROUP BALANCE SHEET
AS AT 31ST DECEMBER 2002
2002 2001
€000's €000's
ASSETS
Investments 938,688 765,884
Reinsurers' share of technical provisions 67,204 37,461
Debtors 41,790 35,509
Other assets 20,973 17,195
Prepayments and accrued income 19,153 21,892
__________ __________
TOTAL ASSETS 1,087,808 877,941
LIABILITIES
Technical provisions (736,083) (594,957)
Provision for other risks and charges (11,671) (13,320)
Creditors (113,695) (59,821)
__________ __________
NET ASSETS 226,359 209,843
======== ========
CAPITAL AND RESERVES
Ordinary share capital 25,125 25,090
Share premium 5,367 5,266
Reserves 178,436 171,667
_________ _________
ORDINARY SHAREHOLDERS' FUNDS 208,928 202,023
Preference share capital 2,923 2,923
Minority interests 14,508 4,897
_________ _________
226,359 209,843
======== ========
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31ST DECEMBER 2002
2002 2001
€000's €000's
Net cash inflow from operating activities 167,139 103,895
Dividends paid (8,704) (7,879)
Corporation tax paid (6,148) (6,587)
Capital expenditure (1,814) (5,395)
Financing (3,129) (821)
_________ ________
147,344 83,213
======== =======
Cash flows were invested as follows
(Decrease) increase in cash holdings (3,860) 2,842
_________ ________
Acquisition of subsidiary 9,000 -
_________ ________
Net portfolio investment
Quoted shares 27,643 (18,737)
Quoted debt securities (207,331) 113,652
Unquoted shares 2,565 1,757
Deposits with banks 270,536 (33,984)
Loans and advances 32,889 (2,579)
Land and property 15,902 20,262
_________ ________
142,204 80,371
_________ ________
Net investment of cash flows 147,344 83,213
======== =======
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31ST DECEMBER 2002
2002 2001
€000's €000's
Retained profit 11,099 17,131
Exchange translation adjustment (717) 274
__________ ________
Total recognised gains relating to the year 10,382 17,405
Prior year adjustment - 20,475
__________ ________
Total gains and losses recognised since annual report for year ended 31st
December 2001 10,382 37,880
======== =======
RECONCILIATION OF MOVEMENT IN
ORDINARY SHAREHOLDERS' FUNDS
FOR THE YEAR ENDED 31ST DECEMBER 2002
2002 2001
€000's €000's
Profit after taxation and minority interests 20,342 25,544
Less: preference dividends (282) (282)
_______ ________
20,060 25,262
Dividends (8,961) (8,131)
New share capital issued 136 68
Adjustment on renominalisation of preference share capital - 170
Other recognised (losses) gains (717) 274
Repurchase of ordinary shares (3,613) (889)
_______ ________
Net addition to shareholders' funds 6,905 16,754
Ordinary shareholders' funds at beginning of year as originally reported
202,023 164,794
Prior year adjustment - 20,475
_______ ________
Ordinary shareholders' funds at end of year 208,928 202,023
====== =======
TECHNICAL RESULT BY CLASS OF BUSINESS
YEAR ENDED 31ST DECEMBER 2002
Net Earned Net Claims Net Op Underwriting Allocated Technical
Premiums Incurred Expenses Result Inv Income Result
€000's €000's €000's €000's €000's €000's
Direct insurance
Motor 144,041 (136,060) (18,154) (10,173) 17,040 6,867
Liability 53,456 (59,202) (8,111) (13,857) 8,121 (5,736)
Fire & Property 39,273 (22,729) 1,592 18,136 1,920 20,056
Other 3,555 (2,542) (385) 628 200 828
_______ ________ _______ ________ ________ _______
Total direct insurance 240,325 (220,533) (25,058) (5,266) 27,281 22,015
====== ======= ====== ======= ======= ======
YEAR ENDED 31ST DECEMBER 2001
Net Earned Net Claims Net Op Underwriting Allocated Technical
Premiums Incurred Expenses Result Inv Income Result
€000's €000's €000's €000's €000's €000's
Direct insurance
Motor 120,448 (124,687) (18,040) (22,279) 15,050 (7,229)
Liability 36,295 (40,643) (6,173) (10,521) 6,839 (3,682)
Fire & Property 32,760 (17,804) (202) 14,754 1,633 16,387
Other 3,152 (1,977) (371) 804 180 984
_______ ________ _______ ________ ________ _______
Total direct insurance 192,655 (185,111) (24,786) (17,242) 23,702 6,460
Reinsurance acceptances
209 2,129 (184) 2,154 1,053 3,207
_______ ________ _______ ________ ________ _______
Total 192,864 (182,982) (24,970) (15,088) 24,755 9,667
====== ======= ====== ======= ======= ======
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 12 minutes ago WH Smith
- 32 minutes ago Staffline Group
- 57 minutes ago Manchester & London Investment Trust
- 1 hour ago Associated British Foods
- 1 hour ago Centaur Media