SNT
SNT
SNT - Santam Limited - Operational update: following its AGM, 29 May 2007
SANTAM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1918/001680/06)
(Share Code: SNT & ISIN: ZAE000006854)
SANTAM LIMITED
OPERATIONAL UPDATE TO SHAREHOLDERS FOLLOWING ITS ANNUAL GENERAL MEETING 29 MAY
2007
Annual General Meeting - Operational update to shareholders
This serves as a general communication to Santam shareholders with regards to
the business environment to date. As mentioned with the announcement of our 2006
financial results in February of this year, pricing and underwriting margins in
the South African short-term insurance market remain under pressure. The
corrective actions taken since last year started to yield positive results on
our personal lines and commercial portfolios. Adverse weather and severe drought
conditions have placed strain on our crop business. Santam`s overall growth of
quality business is in line with expectations for the period, whilst the
underwriting result for the year to date is pleasing.
The company`s investment portfolio performed well, in line with the strong local
equity market, contributing to better than expected headline earnings.
Shareholders are reminded of the inherent volatility of underwriting and
investment activities.
To date, good progress has been made with the envisaged capital management
actions. The voluntary buy back programme resulted in 5.88% of the shares being
bought back at R102 per share, reducing capital by R711 million. The R600
million subordinated debt issue was successfully placed on 8 May 2007. Non-
redeemable preference shares have been created, but given the volatility and
uncertainty in this market, the company decided to delay the decision to raise
preference share capital. The intention remains to manage the South African
solvency margin down to approximately 40%.
The scheme of arrangement in terms of section 311 of the Companies Act, 1973
(Act 61 of 1973), as amended, between Santam and its shareholders pursuant to
Santam`s Broad-Based Black Economic Empowerment ("BBBEE") ownership initiative
("the BBBEE transaction") became operative on 21 May 2007. The cost of the BBBEE
transaction will result in a charge to the income statement in terms of IFRS 2,
the International Financial Reporting Standard for Share-based payments. Details
of the BBBEE transaction are in the process of being determined. Once these have
been finalised, the amount and timing of the income statement charge, and the
effect of the income statement charge on the net asset value of the company, if
any, will be determinable.
The next set of results will be the interim results for 2007 to be published on
21 August 2007
CAPE TOWN
29 MAY 2007
Sponsor:
Investec Bank Limited
Date: 29/05/2007 10:12:06 Produced by the JSE SENS Department.
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