Interim Results
FBD Holdings PLC
27 August 2003
INTERIM RESULTS ANNOUNCEMENT
For half year ended 30th June 2003
2003 2002
FINANCIAL HIGHLIGHTS €000's €000's
•Turnover 217,540 172,328
•Net earned premium 141,194 114,641
•Operating profit 61,767 17,323
Cent Cent
•Operating earnings per share 126.18 35.03
•Dividend per share 10.60 9.10
FBD Holdings plc, announces continued profit growth for the period ended 30th
June 2003. An increase of 16.5% in the interim dividend has been declared.
Commenting on the interim results, Philip Fitzsimons, Chief Executive said;
'Turnover at the Group increased by over 26% for the first six months while
operating profit was €61.8m compared to €17.3m for the same period last year.
Each of the Group's business divisions - Insurance Underwriting, Financial
Services and Property/Leisure contributed to this performance.'
'In relation to the underwriting outcome for the Insurance company, the positive
sales figures so far in 2003, allied to the strong growth in sales in 2002
(31%), supported by FBD's ongoing expansion into urban and commercial markets,
has resulted in a significant increase in earned premium in the period under
review. This premium growth combined with substantial savings in pre 2003 injury
claims in particular, plus a fall in accident frequency in the current year,
resulted in a turnaround in the underwriting result (from a loss of €4.3m in the
first half of 2002 to a profit of €32.2m in this period). It is a most welcome
result against a background of underwriting losses of almost €94m on the motor
account over the previous five years. In light of the improving underwriting
climate, FBD implemented reductions of 10% on car and home insurance premiums
and 7.5% on property rates for shops, pubs and other retail outlets in recent
months. FBD continues to monitor claims trends and if the current improved
environment is maintained, further reductions in premiums are anticipated.'
'The ongoing positive performance of our Property / Leisure businesses is most
satisfactory, particularly in light of current market challenges in the Hotels
industry, as is the increased contribution from our Financial Services
businesses.'
ENDS 27th August 2003
For Reference
Telephone
FBD
Philip Fitzsimons, Chief Executive 01 4093200
Murray Consultants
Joe Murray/Geraldine Kearney 01 4980300
FBD HOLDINGS PLC
INTERIM STATEMENT
FBD Holdings plc is pleased to announce excellent results for the half year
ended 30th June 2003.
Group operating profit increased significantly to €61.8m., compared to €17.3m.
in the half year 2002. Each of the Group's business divisions - Insurance
Underwriting, Financial Services and Property/Leisure - contributed to this
performance.
The resultant operating earnings per share amounts to 126.18 cent (35.03 cent,
June 2002). Net assets per share grew to 615.87 cent from 510.13 cent at 31st
December 2002.
Insurance Underwriting
FBD Insurance gross premium written in the half year to 30th June 2003 amounted
to €177.8m. (€154.1m). Insurance operating profit increased to €48.7m.
(€10.7m.). The major reason for this increased profitability was the improvement
in the technical insurance result, €46.8m. compared to €9.0m last year.
Investment income accounted for €14.6m. (€13.2m) of the technical insurance
result.
The technical result reflects the improvement in underwriting performance in all
classes of business, particularly in motor and property. The underwriting result
is most welcome particularly in light of the fact that FBD sustained losses of
almost €94m on its motor account over the previous five years. The underwriting
results overall show a turnaround from a loss of €4.3m in first half of 2002 to
a profit of €32.2m in the first half of 2003. This turnaround is attributable to
two key factors; firstly, the growth in earned premium, from €114.6m. to
€141.2m. and secondly, the reduction in claims incurred from €106.6m. to €93.7m.
The growth in premium arises from the positive sales performance in 2003,
combined with the very strong sales growth in 2002 (31%), with the latter sales
coming through as earned income in the current period. This reflects the ongoing
success of FBD Insurance in penetrating the urban and commercial markets. In
relation to claims, and specifically personal injury claims, the charge to the
Profit & Loss Account reflects considerable savings that have emerged on pre
2003 claims, in particular. These savings are a direct consequence of the lower
level of claims settlements being experienced since the end of last year. It
also coincides with a fall in injury accident frequencies in the current year.
Whilst these claim trends are most noticeable in our motor portfolio, similar
trends are emerging in our employers' liability and public liability accounts.
The latter have proven to be difficult historically with accumulated
underwriting losses of over €53m in the last five years but we are hopeful that
the improvements that are occurring will continue. In relation to property
insurance, the favourable weather conditions in the year to date have benefited
the account.
Property & Leisure
This division, which embraces the Group's interests in the Tower Hotel Group in
Ireland and La Cala Resort and Sunset Beach Hotel in Spain, reported a doubling
of operating profits (€10.2m. compared to €5.1m. in the corresponding period
last year). The increase is due, in the main, to profits on the sale of the Los
Altos apartments at La Cala, Spain.
The overall performance of this division is satisfactory in what have been
volatile times for the Hotels industry in particular, both in Ireland and Spain,
due to world-wide political and economic uncertainty.
Financial Services
Our Financial Services Businesses - which include general and life insurance
brokerages - all performed well in the first half. These and other fee earning
financial services activities reported increased operating profits, doubling
from €1.5m. to €2.9m. in the period.
Balance Sheet
Ordinary shareholders' funds increased by €45.5m. to €254.4m. during the period.
This increase was achieved despite a fall in the value of the Group's fixed
interest investments at the end of the period as a result of rising yields. This
is reflected in the negative short-term fluctuation of €6.4m. in the Profit &
Loss Account.
Interim Dividend
The Directors have decided to increase the interim dividend to 10.6 cent,
compared to 9.1 cent in 2002, an increase of 16.5%.
The interim dividend will be paid on 3rd October 2003 to shareholders on the
Company Register at close of business on 5th September 2003. The interim
dividend is subject to withholding tax (DWT), except for shareholders who are
exempt from DWT and have furnished a properly completed Capital Composite
Resident Form to the Company's Registrar.
Outlook
The outlook for the Group for the remainder of 2003 and beyond is very
encouraging.
On the insurance front, it is evident that the determination of insurers,
Government and customers to tackle the fundamental problems that have for so
long bedevilled the industry has begun to deliver returns. We welcome the
commitment of the Oireachtas Joint Committee on Enterprise and Small Business to
act as a watchdog to see that critical initiatives in the areas of legislation,
fraud elimination and accident prevention are implemented, early and
effectively. The establishment of the Personal Injuries Assessment Board (PIAB)
and the introduction of a book of quantum, which would establish injury awards
at levels that enable premiums to be reduced still further, are essential to
advancing the agenda. It is also essential that the remit of the PIAB be
extended at the earliest possible date to embrace not only employers' liability
injury claims but also public liability and motor.
Last March, FBD signalled its determination to respond, by way of premium
reductions, to the improving claims environment if the favourable trends were
maintained. The Company is pleased to report that it has already delivered on
this promise with reductions, to date, totalling 10% in base car and house
insurance premiums, and 7.5% in retail property rates.
The process of monitoring and analysing claim trends is ongoing and FBD's
premium pricing will be responsive, as it always has, to its underwriting
experience. It is by reference to this that long term sustainable value can be
delivered to customers and shareholders alike. If the current favourable claim
trends are maintained, further premium reductions will be forthcoming. Against
this background FBD Insurance will continue to pursue its ambitious growth
targets while maintaining its current cost efficient structure, which delivers
one of the lowest cost to income ratios in the Irish Insurance Industry.
The Group is optimistic that the progress achieved in its other financial
services activities in the year to date will be maintained.
On the Property and Leisure side, the Group is committed to furthering its
development plans in the months ahead. FBD continues its investment programme in
the Tower Hotel Group (75% owned by FBD) and in its Spanish interests.
Earlier this year the Tower Group announced plans to build a new 4 Star Hotel
and Country Club in Castleknock, County Dublin. This is a joint venture with
Monarch Properties Ltd, who will develop an 18-hole championship golf course to
complement the hotel. The hotel is scheduled for completion in December 2004.
At La Cala, Mijas, Spain, the building of 32 villas and townhouses is well
underway. Known as Colinas del Golf, the development will prove attractive to
owners seeking top quality golf front residences. Also at La Cala, work on the
new third golf course is well advanced and the target date for opening the
course is Spring 2005.
The progress achieved in the first half year augurs well for the future.
ENDS
FBD DEVELOPMENTS
•FBD Insurance relocated to purpose built offices in Tralee earlier this
year and will complete a similar move in Drogheda before year-end. A number
of additional new locations are currently being considered for FBD Offices.
•Roll out of a comprehensive on-line computerisation programme for all of
FBD's 50 local offices has been completed and further initiatives to
maximise the opportunities for improved customer service and additional
efficiencies, presented by this investment, are well advanced.
•FBD continues to cater for its large base of farming business while at
the same time expanding its presence in the small to medium businesses and
retail sectors. Large urban areas are a key target for continued growth
along with Dublin where FBD now has a firm base of business. The house
insurance market is also targeted for growth.
•FBD Brokers, who are the largest insurance providers to the food and
dairy processing sectors, continue to grow their base of corporate customers
in medium to large manufacturing, wholesale and distribution businesses.
•FBD Life & Pensions continues to grow as an independent advisor to a
broad spectrum of individuals and businesses, with a network of financial
advisors strategically located around the country, assisting customers in
making key decisions in relation to investments, pensions, protection and
mortgages.
FBD HOLDINGS PLC
GROUP PROFIT AND LOSS ACCOUNT
For half year ended 30th June 2003
Half Year Half Year Year
Ended Ended Ended
30/6/03 30/6/02 31/12/02
(Unaudited) (Unaudited) (Audited)
€000's €000's €000's
Turnover 217,540 172,328 421,612
========= ========= ========
Balance on the Note 1 46,771 8,957 22,015
technical account -
general business
Longer term 16,366 14,809 30,293
investment return
Allocated
investment return
transferred to the
technical account -
general business (14,597) (13,239) (27,281)
Other income 13,227 6,855 12,667
Other charges - (59) (163)
--------- --------- --------
Operating profit Note 2 61,767 17,323 37,531
Short term (6,407) (3,205) (12,356)
fluctuations in --------- --------- --------
investment return
Profit before 55,360 14,118 25,175
taxation
Taxation (6,297) (2,607) (4,206)
--------- --------- --------
Profit after 49,063 11,511 20,969
taxation
Minority (127) (209) (627)
interests --------- --------- --------
Profit after 48,936 11,302 20,342
taxation and
minority
interests
Dividends (4,379) (3,718) (9,243)
--------- --------- --------
Retained profit 44,557 7,584 11,099
========= ========= ========
Cent Cent Cent
========= ========= ========
Operating earnings
per 60c ordinary
share based on
longer term
investment return 126.18 35.03 75.34
========= ========= ========
Earnings per 60c 119.39 27.35 48.76
ordinary share ========= ========= ========
Dividend per 60c 10.60 9.10 22.00
ordinary share ========= ========= ========
Net assets per 60c 615.87 502.49 510.13
ordinary share ========= ========= ========
FBD HOLDINGS PLC
GROUP BALANCE SHEET
As at 30th June 2003
As at As at As at
ASSETS 30/6/03 30/6/02 31/12/02
(Unaudited) (Unaudited) (Audited)
€000's €000's €000's
Investments 1,007,078 815,898 938,688
Reinsurers' share of 65,104 48,022 67,204
technical provisions
Debtors 55,333 49,632 41,790
Other assets 17,942 17,709 20,973
Prepayments and accrued 26,043 26,261 19,153
income ---------- --------- --------
TOTAL ASSETS 1,171,500 957,522 1,087,808
LIABILITIES
Technical provisions (776,452) (655,755) (736,083)
Provision for other risks and (10,732) (13,560) (11,671)
charges
Creditors (112,489) (74,519) (113,695)
---------- --------- --------
NET ASSETS 271,827 213,688 226,359
========== ========= ========
CAPITAL AND RESERVES
Ordinary share capital 25,125 25,125 25,125
Share premium 5,367 5,367 5,367
Reserves 223,917 175,309 178,436
---------- --------- --------
ORDINARY SHAREHOLDERS'
FUNDS 254,409 205,801 208,928
Preference share capital 2,923 2,923 2,923
Minority interests 14,495 4,964 14,508
---------- --------- --------
271,827 213,688 226,359
========== ========= ========
FBD HOLDINGS PLC
GROUP CASH FLOW STATEMENT
For half year ended 30th June 2003
Half Year Half Year Year
Ended Ended Ended
30/6/03 30/6/02 31/12/02
(Unaudited) (Unaudited) (Audited)
€000's €000's €000's
Net cash inflow from 81,055 40,398 167,139
operating activities
Dividends paid (5,453) (4,859) (8,704)
Corporation tax paid (4,063) (4,858) (6,148)
Capital expenditure (1,595) (1,060) (1,814)
Financing 2,658 3,573 (3,129)
---------- --------- ---------
72,602 33,194 147,344
========== ========= =========
Cash flows were invested as follows
Increase (decrease) in cash 4,599 (3,533) (3,860)
holdings ---------- --------- ---------
Acquisition of subsidiary - - 9,000
---------- --------- ---------
Net portfolio investment
Quoted shares 16,578 646 27,643
Quoted debt securities 193,383 40,949 (207,331)
Unquoted shares (939) 713 2,565
Deposits with banks (137,793) (42,761) 270,536
Loans and advances (1,116) 26,095 32,889
Land and property (2,110) 11,085 15,902
---------- --------- ---------
68,003 36,727 142,204
---------- --------- ---------
Net investment of cash flows 72,602 33,194 147,344
========== ========= =========
FBD HOLDINGS PLC
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For half year ended 30th June 2003
Half Year Half Year Year
Ended Ended Ended
30/6/03 30/6/02 31/12/02
(Unaudited) (Unaudited) (Audited)
€000's €000's €000's
Retained profit 44,557 7,584 11,099
Exchange translation (469) (331) (717)
adjustment ---------- --------- --------
Total gains recognised in 44,088 7,253 10,382
period
========== ========= ========
RECONCILIATION OF MOVEMENT IN ORDINARY SHAREHOLDERS' FUNDS
For half year ended 30th June 2003
Half Year Half Year Year
Ended Ended Ended
30/6/03 30/6/02 31/12/02
(Unaudited) (Unaudited) (Audited)
€000's €000's €000's
Profit after taxation and 48,936 11,302 20,342
minority interests
Less: preference dividends - - (282)
---------- --------- --------
Profit attributable to 48,936 11,302 20,060
ordinary shareholders
Dividends (4,379) (3,718) (8,961)
New share capital issued - 136 136
Other recognised losses (469) (331) (717)
Reissue (purchase) of 1,393 (3,611) (3,613)
ordinary shares ---------- --------- --------
45,481 3,778 6,905
Ordinary shareholders' funds
at beginning of period 208,928 202,023 202,023
---------- --------- --------
Ordinary shareholders' funds 254,409 205,801 208,928
at end of period ========== ========= ========
FBD HOLDINGS PLC
SUPPLEMENTARY INFORMATION
For half year ended 30th June 2003
Half Year Half Year Year
Ended Ended Ended
30/6/03 30/6/02 31/12/02
(Unaudited) (Unaudited) (Audited)
€000's €000's €000's
Note 1 - Technical Result
-----------------------------
Gross written premiums 177,795 154,059 325,809
========= ========= ========
Net earned premiums 141,194 114,641 240,325
Net claims incurred (93,749) (106,582) (220,533)
Net operating expenses (15,271) (12,341) (25,058)
--------- --------- --------
Underwriting result 32,174 (4,282) (5,266)
Allocated investment 14,597 13,239 27,281
income
--------- --------- --------
Technical result 46,771 8,957 22,015
========= ========= ========
Note 2 - Operating Profit by Activity
-----------------------------------------
Insurance Underwriting 48,704 10,669 25,340
Financial Services 2,855 1,536 3,258
Property and Leisure 10,208 5,118 8,933
--------- --------- --------
61,767 17,323 37,531
========= ========= ========
This information is provided by RNS
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Friday, 22nd November 2024
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