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IDQ
IDQ
IDQ - Indequity Group Limited - Unaudited condensed consolidated interim
results for the six months ended 31 March 2011
Indequity Group Limited
Incorporated in the Republic of South Africa
Registration number: 1998/015883/06
Share Code: IDQ
ISIN: ZAE000016606
("Indequity" or "the Group")
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS
ENDED 31 MARCH 2011
OUR PRIMARY OBJECTIVE
The primary objective of the group is to create prosperity for all our
stakeholders over the longer term. The creation of prosperity is therefore
deeply rooted in Indequity`s distinctive culture and rich heritage of
integrity, stability, and passion; underpinned by an uncompromising
determination to achieve excellence in everything we do. We consider
prosperity to be both a tangible and an intangible asset in people`s lives
and regard it as an integral part of Indequity.
NATURE OF BUSINESS
The group`s operations are focused on the short term insurance industry.
Indequity Specialised Insurance Limited, a wholly owned subsidiary within the
Indequity Group, is registered as a short-term insurer with the Financial
Services Board. Indequity offers a broad spectrum of personal and business
insurance services to the professionally qualified, affluent and risk-aware
members of society.
We focus on the delivery of unique specialised risk solutions to our select
client base by way of our two extraordinary products.
1. Unique-Cover, a specialised short-term insurance cover for the individual
with unique needs.
2. Probiz, a distinctive short-term insurance policy that offers peace of
mind to the professional`s business.
Indequity is confident that its unique business model will ensure above-
average growth in earnings and net asset value per share over the longer
term.
GROUP ACTIVITIES
Insurance
Short-term insurance underwriting
General short-term insurance products to the professional and affluent
private client markets:
Personal lines
Business insurance
FINANCIAL REVIEW
Indequity Group Limited`s results reflect an exceptional first half of the
financial year, particularly when compared to the results of the first half
of 2010. The earnings showed a significant improvement, as both headline
earnings per share and earnings per share showed an increase of 933% in
comparison to 2010.
Taking into consideration the difficult economic conditions that persisted
and claim costs that came under pressure as a result of increased hail and
flooding claims, the underwriting result for the first six months of R 7,068
million was exceptional when compared to the R 4,473 million achieved during
the first half of 2010, which is an increase of 58% year on year.
Consolidated profit before tax for the first six months of R2,399,000
increased by 328% when compared to consolidated profit before tax for the
same period of the prior financial year of R560,000. Profit before tax for
the full year ended 30 September 2010 was R2,851,000. This exceptional growth
can be attributed to an improvement in the profitability of the insurance
operations due to an increase in premiums written and exceptional cost and
claims management.
The continued improvement and growth of Indequity over this period resulted
in an increase in Cash and cash equivalents from R 13,3 million at 31 March
2010 to R 16,2 million at 31 March 2011, an increase of R 2,9 million.
PROSPECTS
Although management remains optimistic about the prospects for the second
half of the year, the extraordinary growth pattern will be difficult to
maintain given increasing competition in the industry as well as the inherent
uncertainty of any insurance business. The company will continue its efforts
to optimise profitability with a focus on building a superior quality
business, building on successes of the past and improving efficiencies.
Indequity is well positioned to face current challenges with its unique
product and quality business.
Condensed Consolidated Interim Statement of Financial Position
31 March 31 March 30
2011 2010 September
2010
Audited
Unaudited Unaudited
R`000 R`000 R`000
ASSETS
Property and equipment
295 362 342
Intangible assets
531 531 530
Subrogation and salvage recoveries
2,538 2,482 2,705
Reinsurance portion of insurance
contract provisions 21 19 20
Deferred tax asset
80 - 80
Loans and receivables
328 179 243
Cash and cash equivalents
16,179 13,282 13,767
Total Assets
19,972 16,855 17,687
EQUITY
Capital and reserve attributed to the company`s
equity holders
Share capital
24 24 24
Share premium
13,554 11,837 13,554
Contingency reserve
2,930 2,625 2,758
Accumulated loss
(5,959) (6,911) (7,514)
Equity attributed to equity holders
of the parent 10,549 7,575 8,822
Minority interest
1,100 1,100 1,100
Total Equity
11,649 8,675 9,922
LIABILITIES
Loans payable
219 359 219
Insurance contract provisions
3,820 3,909 3,242
Tax payable
674 324 16
Dividends payable
3 3 3
Trade and other payables
3,607 3,585 4,285
Total Liabilities
8,323 8,180 7,765
Total shareholders` equity and
liabilities 19,972 16,855 17,687
Condensed Consolidated Interim Statement of Comprehensive Income
31 March 31 March 30
2011 2010 September
2010
Audited
Unaudited Unaudited
R`000 R`000 R`000
Gross
written premium 15,744 13,952 28,555
Less: reinsurance premium
(560) (483) (981)
Net premium written
15,184 13,469 27,574
Change in provision for unearned
premiums, net of reinsurance (21) - (27)
Net insurance premium revenue
15,163 13,469 27,547
Other income
172 120 660
Investment income
325 304 682
Total revenue
15,660 13,893 28,889
Claims incurred, net of reinsurance
(7,421) (7,935) (14,315)
Administration Expenses
(4,654) (4,376) (9,666)
Acquisition costs
(1,171) (1,003) (2,023)
Finance costs
(15) (19) (34)
Total Expenses
(13,261) (13,333) (26,038)
Profit/(loss) before taxation
2,399 560 2,851
Taxation
(672) (385) (629)
Total comprehensive income for the
period 1,727 175 2,222
Profit/(loss) attributable to:
- Equity holders of the parent
1,727 175 2,222
- Minority interest
- - -
1,727 175 2,222
Earnings attributable to the equity
holders
Basic earnings per share (cents)
14.77 1.43 18.10
Diluted earnings per share (cents)
14.77 1.43 18.10
Dividends per share (cents)
- Ordinary shares
- - -
- A Class preference shares
- - -
Condensed Consolidated Interim Statement of Cash Flows
31 March 31 March 30
2011 2010 September
2010
Audited
Unaudited Unaudited
R`000 R`000 R`000
Net cash from/(used in) operating
activities 2,497 1,655 2,771
Net cash from investing activities
(85) 3,644 (378)
Net cash from/(used in) financial
activities - (4,171) (780)
Net increase in cash and cash
equivalents 2,412 1,128 1,613
Cash and cash equivalents at
beginning of period 13,767 12,154 12,154
Cash and cash equivalents at end of
period 16,179 13,282 13,767
Condensed Consolidated Interim Statement of Changes in Equity
Share Accumulated Contingenc Minority Total
capital y
and loss reserve Interest
premium
R`000 R`000 R`000 R`000 R`000
Balance as at 1
October 2009 14,073 (6,946) 2,485 4,632 14,244
Changes in
Equity for the
year ended 30
September 2010
Total
comprehensive - 2,222 - - 2,222
income for the
year ended 30
September 2010
Treasury shares
acquired (495) - - - (495)
Unbundling
transaction - (2,517) - (3,532) (6,049)
Transfer to
contingency - (273) 273 - -
reserve
Balance at 30
September 2010 13,578 (7,514) 2,758 1,100 9,922
Total
comprehensive - 1,727 - - 1,727
income for the
6 months ended
31 March 2011
Transfer to
contingency - (172) 172 - -
reserve
Balance at 31
March 2011 13,578 (5,959) 2,930 1,100 11,649
Balance as at 1
October 2009 14,073 (6,946) 2,485 4,632 14,244
Total
comprehensive - 175 - - 175
income for the
6 months ended
31 March 2010
Transfer to
contingency - (140) 140 - -
reserves
Treasury shares
acquired (805) - - - (805)
Treasury shares
sold 1,086 - - - 1,086
Incentive
shares issued 7 - - - 7
Minority
interest - - - (3,532) (3,532)
unbundled
Share premium
used to finance (2,500) - - - (2,500)
unbundling
Balance as at
31 March 2010 11,861 (6,911) 2,625 1,100 8,675
Headline Earnings per Share and Diluted Headline Earnings per Share
6 months 6 months Year ended
ended ended
31 March 31 March 30
2011 2010 September
2010
Unaudited Unaudited Audited
Headline earnings per share
(cents) 14.77 1.43 18.10
Diluted headline earnings per
share (cents) 14.77 1.43 18.10
Number of shares
- in issue
13,170,000 13,170,000 13,170,000
- weighted average
11,688,910 12,254,559 12,273,762
- diluted
11,688,910 12,254,559 12,273,762
The number of shares has been used in the calculation of earnings per share,
diluted earnings per share and headline earnings per share.
ACCOUNTING POLICIES AND PREPARATIONS
The principal accounting policies applied in preparing the condensed interim
financial statement for the six months ended 31 March 2011 are consistent
with those of the annual financial statement for the year ended 30 September
2010. The interim financial statements were prepared in accordance with the
recognition, measurement, presentation and disclosure requirements of
International Financial Reporting Standards ("IFRS"), IAS 34 - Interim
Financial Reporting and in compliance with the Listing Requirements of the
JSE Limited.
The financial information has been prepared in accordance with IFRS`s that
are currently effective. This may differ from interpretive guidance from the
International Financial Reporting Interpretation Committee of International
Accounting Standards Board.
SEGMENT INFORMATION
No segment analysis has been prepared for the six months as the group`s
operations are focused only on short-term insurance activities.
DIVIDENDS
In accordance with the Group`s insurance operations` current cash
requirements, no interim dividends have been declared to ordinary
shareholders.
ON BEHALF OF BOARD
LJ van Rensburg TC Meyer Johannesburg
Chief Executive Officer Chairman 13 May 2011
Directors: LJ van Rensburg, TC Meyer*, JF Zwarts*, G Williamson*, AV van
Jaarsveldt* (British),
CM Koekemoer (*non-executive)
Company secretary: S Haripersad Transfer secretary: Link Market Services
South Africa (Pty) Ltd
Sponsor: KPMG Services (Pty) Ltd Registered address: First Floor, Cascade
House, Constantia Office Park, CNR 14th Avenue and Hendrik Potgieter Road,
Constantia Kloof, 1709 Postal address: PO Box 5433, Weltevredenpark, 1715
Telephone: (+27 11) 457 0816 Fax: (+27 11) 475 0877
Date: 13/05/2011 11:12:59 Produced by the JSE SENS Department.
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