Interim Results

FBD HOLDINGS PLC 1 September 1999 INTERIM RESULTS For the Half Year Ended 30th June 1999 HIGHLIGHTS - 1999 1998 Increase EURO Euro Euro % 000's '000's * Gross premiums written 87,314 75,111 +16% * Operating profit 9,390 7,989 +18% * Operating earnings per share 18.47c 15.99c +16% * Dividend per share 6.50c 5.65c +15% HIGHLIGHTS - IR£ 1999 1998 Increase IR£000's IR£000's % * Gross premiums 68,765 59,155 +16% written * Operating profit 7,395 6,292 +18% * Operating earnings per share 14.55p 12.59p +16% * Dividend per 5.119p 4.45p +15% share Commenting on the results, Mr. Paul O'Callaghan, Chief Executive, stated: 'We have continued to trade strongly in the period. Our operating performance has been very satisfactory'. For Reference: FBD Holdings plc Paul O'Callaghan, Chief Executive Tel: 353 1 409 3200 Philip Fitzsimons, Deputy Chief Executive Tel: 353 1 409 3200 Murray Consultants: Joe Murray / Grainne O'Brien Tel: 353 1 661 4666 FBD HOLDINGS PLC INTERIM STATEMENT FBD Holdings plc is pleased to announce continuing strong operating results for the half year ended 30th June 1999. Profit & Loss Account The Profit & Loss Account for the period has been prepared in accordance with the recent amendment to 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 by 17.5% from Euro 7.989m (IR£6.292m) to Euro 9.390m (IR£7.395m). The profit figure reflects the improvement in our Technical Insurance Account, reduced Investment Returns and broadly similar Other Income/Other Charges, compared to the corresponding 1998 period. The improvement in the Technical Insurance Account is attributable to a better underwriting outcome in the period, with underwriting losses reducing from ?8.821m (IR£6.947m.) to Euro 6.888m (IR£5.425m). This was brought about by a lower loss ratio on our property account, which was partially offset by a deterioration in liability business. Public liability continues to present difficulties. Premium income grew significantly. Gross written premiums at Euro 87.314m (IR£68.765m) were up 16.2% on the 1998 half year figures. This premium growth was achieved across all business classes and reflects an increase in new business volumes, higher insured values and revised premium rates in selected risk categories. The reduction in investment returns from Euro 12.912m (IR£10.169m) to Euro 12.108m (IR£9.536m) mirrors the movement to lower interest rates and lower equity returns in financial markets in recent times. This trend places the focus for insurance companies on underlying underwriting performance to an increasing extent, which we have emphasised in the past. Other income, amounting to Euro 5.079m (IR£4.0m), arises from our non-underwriting businesses, namely, insurance/assurance broking, IFSC activities and property investments in Ireland and abroad. These businesses continue to perform satisfactorily, with our Spanish investments having a particularly successful year. We are also pleased with progress to date on our Guild Street and Enterprise House properties in the IFSC. Our strong operating performance in the first half year offset the negative impact of short-term fluctuations in investment returns on the Group's net asset position. Net assets were Euro 147.6m (IR£116.2m) at 30th June 1999 compared to Euro 148.2m (IR£116.7m) at the beginning of the year. Unrealised losses on investments reflects the weaker performance of the Irish Stock Market, particularly financial stocks, during the period under review. Notwithstanding this situation, the Group has been successful in maintaining the 30% gain in net assets per share achieved in 1998. Interim Dividend The Directors have declared an interim ordinary dividend of Euro 6.5c (IR5.119166p) compared to Euro 5.650334 (IR4.45p) in 1998, an increase of 15%. As a result of the elimination of the tax credit on dividends from 6th April 1999, there is no tax credit attaching to the 1999 interim dividend. The tax credit on the 1998 interim dividend amounted to Euro 0.698356 (IR0.55p). The interim dividend will be paid on 22nd October 1999, to shareholders on the Company's register at close of business on 17th September 1999. Outlook The strong trading performance of the first 6 months has continued into the second half year and we are confident that it will be maintained. Our businesses are being strengthened on an ongoing basis through increased customer focus, through staff recruitment, training and development and through investment in technology. Our margins are being kept under constant review and will be adjusted where warranted. We are looking forward to continuing our growth and broadening our base of business in the new Millennium. PREFACE NOTE TO ACCOUNTS FOR HALF YEAR ENDED 30TH JUNE 1999 The Profit & Loss Account on page 5 is prepared in accordance with the recent amendment to 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. Half year Half Year Year Ended Ended Ended 30/6/99 30/6/98 31/12/98 IR£000's IR£000's IR£000's Profit before taxation as previously reported 16,916 9,396 16,693 Unrealised (losses)/ gains on investments (19,130) 18,192 22,397 _______ _______ _______ (Loss)/profit before taxation - new basis (2,214) 27,588 39,090 Short term fluctuation in investment return 9,609 (21,296) (26,495) ______ _______ _______ Operating profit - new basis 7,395 6,292 12,595 ====== ====== ====== Year Year Ended Ended 31/12/97 31/12/96 IR£000's IR£000's Profit before taxation as previously reported 14,250 14,674 Unrealised (losses)/gains on investments 9,694 2,902 ______ ______ (Loss)/profit before taxation - new basis 23,944 17,576 Short term fluctuation in investment return (17,310) (6,818) _______ _______ Operating profit - new basis 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 the Profit & Loss Account on a long-term basis, gives a more realistic picture of the ongoing operating performance. FBD HOLDINGS PLC GROUP PROFIT AND LOSS ACCOUNT FOR THE HALF YEAR ENDED 30TH JUNE 1999 Half Year Year Half Year Ended Ended Ended 30/6/98 31/12/98 30/6/99 Restated Restated (Unaudited) (Unaudited) (Audited) IR£000's IR£000's IR£000's Turnover 86,896 82,073 166,903 ====== ====== ======= Balance on the general business technical account 2,280 1,699 3,012 Long term investment return 9,536 10,169 20,601 Allocated investment return transferred to the general business technical account (7,705) (8,646) (17,348) Other income 4,000 4,437 8,904 Other charges (716) (1,367) (2,574) _______ _______ _______ Operating profit 7,395 6,292 12,595 Short term fluctuations in investment return (9,609) 21,296 26,495 _______ _______ _______ (Loss)/profit before taxation (2,214) 27,588 39,090 Taxation credit/ (charge) 3,240 (6,224) (7,015) _______ _______ _______ Profit after taxation 1,026 21,364 32,075 Minority interests (165) (104) (60) _______ _______ _______ Profit after taxation and minority interests 861 21,260 32,015 Dividends (2,123) (1,834) (4,505) _______ _______ _______ Retained (loss) /profit (1,262) 19,426 27,510 ======= ======= ======= Pence Pence Pence Earnings per 50p ordinary share 2.08 51.74 77.22 ====== ====== ===== Operating earnings per 50p ordinary share based on long term investment return 14.55 12.59 25.13 ===== ===== ===== Dividend per 50p ordinary share 5.119166 4.45 10.35673 ======== ===== ======== Net assets per 50p ordinary share 267.04 253.38 268.8 ======= ====== ====== FBD HOLDINGS PLC GROUP BALANCE SHEET AS AT 30TH JUNE 1999 As at As at As at 30/6/98 31/12/98 30/6/99 Restated Restated (Unaudited) (Unaudited) (Audited) IR£000's IR£000's IR£000's ASSETS Investments 430,992 406,331 432,285 Reinsurers' share of technical provisions 42,686 38,022 44,392 Debtors 27,258 30,361 22,785 Other assets 21,487 20,616 23,070 Prepayments and accrued income 9,505 17,354 10,770 ______ ______ ______ TOTAL ASSETS 531,928 512,684 533,302 LIABILITIES Technical provisions (386,167) (356,231) (372,719) Provision for other risks and charges (9,700) (13,641) (13,948) Creditors (19,837) (32,843) (29,885) _______ ________ _______ NET ASSETS 116,224 109,969 116,750 ======= ======= ======= CAPITAL AND RESERVES Ordinary Share Capital 20,734 20,605 20,697 Share premium 3,707 3,388 3,623 Reserves 86,297 80,424 86,930 _______ _______ _______ ORDINARY SHAREHOLDERS' FUNDS 110,738 104,417 111,250 Preference share capital 2,436 2,436 2,436 Minority interests 3,050 3,116 3,064 ______ ______ ______ 116,224 109,969 116,750 ======= ======= ======= FBD HOLDINGS PLC STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the half year ended 30th June 1999 Half Year Year Half Year Ended Ended Ended 30/6/98 31/12/98 30/6/99 Restated Restated (Unaudited) (Unaudited) (Audited) IR£000's IR£000's IR£000's Retained (loss) /profit (1,262) 19,426 27,510 Exchange translation 629 (245) (1,823) adjustment _______ _______ _______ Total (losses) /gains recognised in period (633) 19,181 25,687 ====== ====== ====== RECONCILIATION OF MOVEMENT IN ORDINARY SHAREHOLDERS' FUNDS For the half year Half ended 30th June 1999 Year Year Half Year Ended Ended Ended 30/6/98 31/12/98 30/6/99 Restated Restated (Unaudited) (Unaudited) (Audited) IR£000's IR£000's IR£000's Profit after taxation and minority interests 861 21,260 32,015 Less: preference dividends - - (209) _______ ______ _______ Profit attributable to ordinary shareholders 861 21,260 31,806 Dividends (2,123) (1,834) (4,296) New share capital issued 121 237 564 Other recognised gains/(losses) 629 (245) (1,823) _______ _______ _______ (512) 19,418 26,251 Ordinary shareholders' funds at beginning of period 111,250 84,999 84,999 _______ _______ _______ Ordinary shareholders' funds at end of period 110,738 104,417 111,250 ======= ======= =======

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