| Thu 8 Feb 2001, 0:00 | | Sa Eagle - Audited Results |
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SOUTH AFRICAN EAGLE INSURANCE COMPANY LIMITED
Registration number 1965/006764/06
Audited results and dividend declaration for the year ended 31 December 2000
Highlights
Gross premium income + 10,4%
Operating income + 50,8%
Normal dividends + 18,6%
Commentary
Improved trading conditions and a return to normal weather patterns in the
latter part of the year contributed to improving underwriting trends after the
poor start due to the severe storms and floods in January and February 2000.
These circumstances have resulted in a reduction in the underwriting loss from
R59,5 million in 1999 to R16,5 million in 2000. However, the motor account
continues to give concern and further rating action is being taken to rectify
its performance.
Gross premium income grew by 10,4% with particularly strong growth in the
latter part of the year following
the major consolidations in the market and the launch of Golden Eagle, the
company's 'e-commerce' business to business initiative.
The restructuring costs of R43,2 million (1999 - R37,0 million) are in respect
of costs incurred or committed to and relate to the implementation of work flow
methods, e-commerce initiatives and improved management information systems
which will, when complete, greatly enhance the effectiveness and efficiencies
of the company. Benefits achieved by the project to date are reflected in only
a marginal increase in the expense base from 1999.
Special dividends totalling R596,8 million were paid out of retained earnings
during the year, resulting in a reduction in the solvency margin of the company
from 110,0% in 1999 to 62,7% at the end of 2000. The solvency margin remains
well in excess of the statutory minimum requirement of 25% reflecting the
ongoing financial strength of the company.
Despite the return of excess capital to shareholders, investment income has
grown by 4,9% in the year. This growth has, however, been helped by the receipt
of a number of special dividends and the fact that the full impact of the
payment of the company's special dividends on investment income will only be
reflected in 2001.
The net realised surplus on disposal of investments of R184,7 million (1999 -
R132,6 million) was influenced by the company's requirement to liquidate assets
to fund the payment of special dividends.
Headline earnings after adjusting for the impact of secondary tax on companies
(STC) on the special dividends and restructuring costs
have increased 46,1% to 893,0 cents per share (1999 - 611,4 cents per share).
Given the continuing strong financial position of the company the directors
have increased the total dividend (excluding the special dividends paid) for
the year by 18,6% to 700 cents per share (1999 - 590 cents per share).
Dividend declaration No 59
1. The directors have declared a final dividend of 450 cents per share (1999 -
400 cents per share) payable to shareholders registered on 9 March 2001 making
a total for the year of 700 cents per share (1999 - 590 cents per share),
before special dividends paid during the year of 4 900 cents per share (1999 -
Nil).
2. The dividend is payable on 23 March 2001 and funds will be transferred
electronically to shareholders' bank accounts, or cheques will be posted on or
about that date.
By order of the Board
D W White (Chairman)
NVBeyers (Managing Director)
Johannesburg, 7 February 2001
Summarised income statement
31 Dec 31 Dec
R'000 Note 2000 1999
GROSS WRITTEN PREMIUM 1 867 318 1 691 366
Underwriting loss 2 (16 467) (59 464)
Investment income 3 169 992 162 120
Investment expenses (4 463) (5 559)
149 062 97 097
Restructuring cost (43 225) (37 000)
NET REALISED surplus on
disposal of investments 184 671 132 599
OPERATING INCOME
before taxation 290 508 192 696
Taxation 4 (101 896) (3 271)
NET INCOME after taxation 188 612 189 425
Outside shareholders'
interest therein (1 878) (849)
Net income attributable
to members 186 734 188 576
Dividends - Normal 5 (30 448) (71 859)
- Special (596 796) -
(DEFICIT)/RETAINED INCOME (440 510) 116 717
Abridged balance sheet
31 Dec 31 Dec
R'000 Note 2000 1999
ASSETS
Investments 6 980 010 1 494 522
Fixed assets 50 559 49 877
Current assets 508 240 446 607
Deposits and cash
at bankers 453 091 579 346
TOTAL ASSETS 1 991 900 2 570 352
EQUITY AND LIABILITIES
Capital and reserves 978 251 1 592 902
Minority interest 20 176 3 786
Deferred taxation 15 376 17 360
Technical provisions 702 471 730 336
Current liabilities 275 626 225 968
TOTAL EQUITY AND LIABILITIES 1 991 900 2 570 352
Notes
31 Dec 31 Dec
2000 1999
1. Determination of headline
earnings
Net income attributable to members 186 734 188 576
After-tax adjustment for:
- Net realised surplus on disposal
of investments and fixed assets (182 834) (140 006)
- Reverse provision for restructuring cost (24 710)
- Provision for restructuring cost 12 112 24 710
Headline earnings (8 698) 73 280
Headline earnings per share - cents (71,4) 601,7
Earnings per share before
STC on special dividends and costs
of restructuring - cents 893,0 611,4
Dividend per share - cents - Normal 250 590
- Special 4 900 -
Number of shares in issue 12 179 500 12 179 500
Net asset value per share - cents 8 032 13 079
Solvency margin - % 62,7 110,0
2. Underwriting loss after
charging/(crediting)
Depreciation 18 076 16 842
Loss/(surplus) on disposal of fixed assets 372 (741)
3. Investment income
Interest 125 317 120 208
Dividends 44 675 41 912
Total investment income 169 992 162 120
4. Taxation
The taxation charge of R101,9 million
includes STC of R81,6 million
(R74,6 million in respect of
special dividends).
5. Dividends declared after year end
The dividend declared after year end
has not been recognised in the income
statement for the current year, but the
related secondary tax on companies has
been included in the amount for taxation,
as prescribed by Generally Accepted
Accounting Practice.
6. Investments
Fixed properties 52 734 50 538
Mortgages and loans 19 303 24 200
Government and other
approved securities 192 411 426 416
Public boards, annuities and
other fixed interest securities 120 150
264 568 501 304
Listed shares 625 409 904 180
Unlisted shares 90 033 89 038
Total investments 980 010 1 494 522
Transfer Secretaries
Mercantile Registrars Limited, 8th Floor, 11 Diagonal Street
Johannesburg, 2001
Registered Office
South African Eagle Insurance Company Limited.
5th Floor, SA Eagle House, 70 Fox Street, Johannesburg, 2001
