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IDQ
IDQ
IDQ - Indequity Group Limited - Abridged Audited Group Results for the year
ended 30 Septemeber 2011
Indequity Group Limited
Registration number: 1998/015883/06
Incorporated in the Republic of South Africa
"Indequity" or "the Group" or "the company"
Share code: IDQ
ISIN: ZAE000016606
ABRIDGED AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 SEPTEMEBER 2011
ABRIDGED GROUP STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER
2011
30 Sep 30 Sep
2011 2010
Audited Audited
R`000 R`000
ASSETS
Property and equipment 465 342
Intangible assets 534 530
Subrogation and salvage recoveries 2 263 2 705
Reinsurance portion of insurance contract 23 20
provisions
Deferred tax asset 66 80
Loans and receivables 306 243
Cash and cash equivalents 15 987 13 767
Total assets 19 644 17 687
EQUITY
Capital and reserves attributed to the
company`s equity holders
Share capital 24 24
Share premium 13 663 13 554
Contingency reserve 3 104 2 758
Accumulated loss (4 178) (7 514)
Equity attributed to equity holders of the 12 583 8 822
parent
Minority interest 1 100 1 100
Total equity 13 683 9 922
LIABILITIES
Loans payable - 219
Insurance contract provisions 3 292 3 242
Tax payable 142 16
Dividends payable 3 3
Trade and other payables 2 524 4 285
Total liabilities 5 961 7 765
Total shareholders` equity liabilities 19 644 17 687
ABRIDGED GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR
ENDED 30 SEPTEMBER 2011
30 Sep 30 Sep
2011 2010
Audited Audited
R`000 R`000
Gross written premium 32 28 555
196
Less: reinsurance premium (1 166) (981)
Net written premium 31 030 27 574
Change in provision for unearned premiums,
net of reinsurance (4) (27)
Net insurance premium revenue 31 026 27 547
Other income 504 660
Investment income 711 682
Total revenue 32 241 28 889
Claims incurred, net of reinsurance (14 649) (14 315)
Administration Expenses (10 124) (9 666)
Acquisition costs (2 430) (2 023)
Finance costs (2) (34)
Profit before taxation 5 036 2 851
Taxation (1 354) (629)
Profit for the year 3 682 2 222
Total comprehensive income for the year 3 682 2 222
Profit attributable to:
Equity holders of the parent 3 682 2 222
Minority interest - -
3 682 2 222
Earnings attributed to the equity holders
Basic earnings per share (cents) 31.33 18.10
Diluted earnings per share (cents) 30.98 18.10
Dividends per share (cents)
- Ordinary shares - -
- A-Class preference shares - -
ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30
SEPTEMBER 2011
Ordinar Preferen Share Non- Accumula Minori Total
y ce Premiu distribut ted loss ty
shares shares m able and Intere
Contingen st
cy
reserves
R`000 R`000 R`000 R`000 R`000 R`000 R`000
Balance at 14 049 2 485 (6 946) 14 244
30 September
2009 12 12 4 632
Changes in Equity for the year
ended 30 September 2010
Treasury (495) - - (495)
shares - - -
acquired
Unbundling - - (2 517) (6 049)
transaction - - (3
532)
- - 2 222 2 222
Total
comprehensiv
e income for
the year
ended 30 - - -
September
2010
- 273 (273)
Transfer to -
contingency
reserve - - -
Dividends
paid - - - - - - -
Balance at 13 554 2 758 (7 514) 9 922
30 September
2010 12 12 1 100
Changes in Equity for the year
ended 30 September 2011
- - 3 682 3 682
Total
comprehensiv
e income for
the year
ended 30 - - -
September
2011
- 346 (346) -
Transfer to
contingency
reserve - - -
- 79
Ordinary 79 -
shares
distributed
by Employee
Share
Incentive
Purchase - - -
Scheme
Balance at 13 633 3 104 (4 178) 13 683
30 12 12 1 100
September
2011
ABRIDGED CONDENSED GROUP STATEMENT OF CASH FLOWS FOR THE YEAR
ENDED
30 Sep 30 Sep 2010
2011
Audited Audited
R`000 R`000
Net cash from operating activities 2 679 2 771
Net cash from investing activities (240) (378)
Net cash used in financing activities (219) (780)
Net increase in cash and cash 2 220 1 613
equivalents
Cash and cash equivalents at 13 767 12 154
beginning of year
Cash and cash equivalents at end of 15 987 13 767
year
SEGMENT ANALYSIS - BUSINESS SEGMENTS
No segment analysis has been prepared as the group is only involved
in insurance activities, which are managed as a whole. There is no
segmented information reported to management.
CONDENSED NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED
30 SEPTEMBER 2011.
ACCOUNTING POLICIES AND BASIS OF PREPARATION
The annual financial statements from which these abridged financial
statements
have been derived have been prepared in accordance International Financial
Reporting Standards ("IFRS"), the AC 500 standards as previously issued by
the Accounting Practices Board, the JSE listing requirements and the
Companies Act of South Africa.
The annual financial statements have been prepared on the historical cost
basis except for financial instruments classified as at fair value through
profit or loss assets which are recognized at fair value.
The accounting policies have been applied consistently to all periods
presented in these financial statements and agree with those principal
policies used in the preparation of the 30 September 2010 annual financial
statements. The accounting policies have been applied consistently by all
Group entities.
HEADLINE EARNINGS PER SHARE AND DILUTED HEADLINE EARNINGS PER SHARE
Year ended Year ended
30 30
September September
2011 2010
Audited Audited
Headline earnings per share (cents) 31,33 18,10
Headline earnings R`000 3 682 2 222
Weighted average number of ordinary
shares in issue 11 753 333 12 273 762
Diluted headline earnings per share 30,98 18,10 15,84
(cents)
Headline earnings R`000 3 682 2 222
Weighted average number of ordinary
shares in issue 11 886 817 12 273 762
COMMENTS ON RESULTS
In its second year as a standalone short-term insurance business Indequity
is once again pleased to report very satisfactory results. Group profit
before taxation increased from R2,9 million in 2010 to R5 million in 2011.
As our stakeholders may recall, we do not measure our progress and our
success by the size of our operation, but rather by how successfully we
utilize the capital resources at our disposal. For this reason, one of the
primary yardsticks we use in measuring our performance is the return on
capital achieved. In the year under review our pre-taxation return on
capital was an outstanding 50,8% for Indequity Group and an equally
pleasing 40,7% for Indequity Specialised Insurance Ltd, the Group`s
licensed short-term insurer. Also noteworthy is the fact that the
insurance operations generated cash of R5,5 million for the year.
INSURANCE OPERATIONS
As any television viewer may testify, the insurance marketplace has become
crowded and fiercely competitive. As a result, premiums are under constant
pressure with insurance companies using any and all tactics in order to
lure clients. Against this background, Indequity has remained focused on
attracting the "right" business at sensible premiums. Consequently, growth
in turnover was limited to 12,8% over the prior year. Although this may
appear disappointing, we believe that our disciplined approach is the only
prudent long term strategy to build and maintain a superior quality
insurance business.
With the market pressure on premiums, cost control becomes vitally
important. Indequity has succeeded remarkably in this arena with claims
costs as a percentage of net premium written being 47,2% for the year.
This should be compared with industry averages of approximately 61% for the
same period-a truly outstanding performance!
Administration expenses as a percentage of net premium written also
improved by approximately 7% over 2010.
As has become customary, we again wish to summarize the progress made by
the insurance business since commencement of the business in 2002, through
the following graph and statistics:
2003 2004 2005 2006 2007 2008 2009 2010 2011
R`000 R`000 R`000 R`000 R`000 R`000 R`000 R`000 R`000
Net Earned
Premium 1 094 3 315 6 961 10 15 22 24 27 31
729 668 068 836 574 030
Underwriting
Profit 259 1 149 2 252 5 523 6 507 8 059 9 995 13 16
259 381
Profit -3 -1 -2 298 1 056 729 2 535 2 851 5 036
before tax 541 565 284
PROSPECTS
As far as the general personal lines and business insurance operations are
concerned, we anticipate that the business environment will remain highly
competitive. Therefore, growth will remain under pressure and the same
business considerations as outlined above will continue to be pertinent.
We again commit to place emphasis on building a quality long-term
sustainable business and as a result we will continue to follow the same
disciplined approach in these operations, than we had in the past.
In order to continue to deliver superior growth and the corresponding
financial results for our stakeholders, management have spent considerable
time over the past year in developing novel, innovative products to
compliment the Group`s existing product offerings. The first of these was
launched early November 2011.
Although it is still in its infant phase, the market response to what we
believe is a truly revolutionary product, has been quite phenomenal.
Although we realize that converting this optimism into tangible results
will require huge input, we are nevertheless very excited about the longer
term potential of this new product offering for our stakeholders.
In conclusion, now that group operations have been simplified and with the
solid foundation that has to date been established, management are
optimistic about the group`s future prospects and intend to build on the
successes of the past.
CONCLUSION
We wish to express our gratitude to our stakeholders for their continued
support and faith in Indequity and its management over many years. We
trust that their patience will be well rewarded over time.
We also wish to thank our management and employees for their commitment,
dedication and perseverance without which such outstanding results would
not have materialized.
Finally, we wish to express our sincerest gratitude to our Chairman Mr.
Chris Meyer, who has indicated his intention to step down as Chairman and
as a director of Indequity at the company`s following AGM. Chris has been
a cornerstone of Indequity since its establishment and has been a guiding
light in the Group`s evolution and success. We wish to thank him for his
invaluable guidance, wisdom and support over many years and wish him the
very best in his subsequent endeavors.
AUDIT OPINION
The annual financial statements have been audited by Grant Thornton. Both
the financial statements and the unqualified audit opinion are available
for inspection at the registered office of Indequity.
DIVIDEND
No ordinary dividend has been declared for the year under review.
NOTICE TO MEMBERS OF ANNUAL GENERAL MEETING
Notice is hereby given that the annual general meeting of members of
Indequity Group Limited will be held at the registered office, First Floor,
Cascade House, corner 14th Avenue and Hendrik Potgieter Road, Constantia
Kloof, at 10:00 on
6 February 2012.
ON BEHALF OF THE BOARD
TC Meyer L J van Rensburg Johannesburg
Chairman Chief Executive Officer 2 December 201
Directors: TC Meyer*, AV van Jaarsveldt* (British), LJ van Rensburg, JF
Zwarts*,
G Williamson* (* non-executive) Company secretary: S Haripersad
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: (+2711) 475-0816
Fax: (+2711) 475-0877 Website: www.indequity.com
Johannesburg
6 December 2011
Sponsor: KPMG Services (Pty) Ltd
Date: 06/12/2011 10:05:01 Produced by the JSE SENS Department.
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