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IDQ
IDQ
IDQ - Indequity Group Limited - Indequity Group Limited interim results March
2012
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
INDEQUITY GROUP LIMITED INTERIM RESULTS MARCH 2012
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
31 March 31 March 30
2012 2011 September
2011
Unaudited Unaudited Audited
R`000 R`000 R`000
ASSETS
Property and equipment
417 295 465
Intangible assets
534 531 534
Subrogation and salvage 2 2 2
recoveries 232 538 263
Reinsurance portion of insurance
contract provisions 33 21 23
Deferred tax asset
46 80 66
Loans and receivables
105 328 306
Cash and cash equivalents 19 16 15
043 179 987
Total Assets 22 19 19
410 972 644
EQUITY
Capital and reserve attributed to the
company`s equity holders
Share capital
24 24 24
Share premium 13 13 13
645 554 633
Contingency reserve - 2 3
930 104
Accumulated profit/(loss) (5 (4
775 959) 178)
Equity attributed to equity 14 10 12
holders of the parent 444 549 583
Minority interest 1 1 1
100 100 100
Total Equity 15 11 13
544 649 683
LIABILITIES
Loans payable - -
219
Insurance contract provisions 4 3 3
914 820 292
Tax payable
181 674 142
Dividends payable
3 3 3
Trade and other payables 1 3 2
768 607 524
Total Liabilities 6 8 5
866 323 961
Total shareholders` equity and 22 19 19
liabilities 410 972 644
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
31 March 31 March 30
2012 2011 September
2011
Audited
Unaudited Unaudited
R`000 R`000 R`000
Gross written premium 17 15 32
332 744 196
Less: reinsurance premium (749) (1
(560) 166)
Net premium written 16 15 31
583 184 030
Change in provision for unearned
premiums, net of reinsurance (7) (21) (4)
Net insurance premium revenue 16 15 31
576 163 026
Other income
117 172 504
Investment income
459 325 711
Total revenue 17 15 32
152 660 241
Claims incurred, net of reinsurance (8 (7 (14
241) 421) 649)
Administration Expenses (4 (4 (10
854) 654) 124)
Acquisition costs (1 (1 (2
350) 171) 430)
Finance costs -
(15) (2)
Total Expenses (14 (13 (27
445) 261) 205)
Profit before taxation 2 2 5
707 399 036
Taxation (858) (1
(672) 354)
Total comprehensive income for the 1 1 3
period 849 727 682
Profit/(loss) attributable to:
- Equity holders of the parent 1 1 3
849 727 682
- Minority interest - - -
1 1 3
849 727 682
Earnings attributable to the equity
holders
Basic earnings per share (cents) 31.33
15.64 14.77
Diluted earnings per share (cents)
15.55 14.77 30.98
Dividends per share (cents)
- Ordinary shares
- -
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
Share Accumulated Contingency Minority Total
capital
and loss reserve Interest
premium
R`000 R`000 R`000 R`000 R`000
Balance as at 1 13 578 (7 514) 2 758 1 100 9
October 2010 922
Changes in Equity for
the year
ended 30 September
2011
Total comprehensive - 3 682 - - 3
income for 682
the year ended 30
September 2011
Ordinary shares 79 - - -
distributed by 79
Indequity Group
Limited share
incentive purchase
scheme
Transfer to - (346) 346 - -
contingency reserve
Balance at 30 13 657 (4 178) 3 104 1 100 13
September 2011 683
Total comprehensive - 1 849 - - 1
income for the 849
6 months ended 31
March 2012
Ordinary shares 12 - - -
distributed by 12
Indequity Group
Limited share
incentive purchase
scheme
Transfer from - 3 104 (3 104) - -
contingency reserve
Balance at 31 March 13 669 775 - 1 100 15
2012 544
Balance as at 1 13 578 (7 514) 2 758 1 100 9
October 2010 922
Total comprehensive - 1 727 - - 1
income for the 727
6 months ended 31
March 2011
Transfer to - (172) 172 - -
contingency reserves
Balance as at 31 13 578 (5 959) 2 930 1 100 11
March 2011 649
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
6 Months 6 Months Year ended
Ended Ended
31 March 31 March 30 September
2012 2011 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
Net cash from operating 2 834 2 2
activities 497 679
Net cash from/(used in) 222
investing (85) (240)
activities
Net cash used in financing -
activities - (219)
Net increase in cash and cash 3 056 2 2
equivalents 412 220
Cash and cash equivalents at 15 987 13 13
beginning of period 767 767
Cash and cash equivalents at 19 043 16 15
end of period 179 987
HEADLINE EARNINGS PER SHARE AND DILUTED HEADLINE EARNINGS PER SHARE
6 months 6 months Year ended
ended ended
31 March 31 March 30 September
2012 2011 2011
Unaudited Unaudited Audited
Headline earnings per share 15.64
(cents) 14.77 31.33
Diluted headline earnings per 15.55
share (cents) 14.77 30.98
Number of shares
- in issue 13 170 000 13 170 13 170
000 000
- weighted average 11 829 967 11 688 11 753
910 333
- diluted 11 886 817 11 688 11 886
910 817
The number of shares has been used in the calculation of earnings per share,
diluted earnings per share and headline earnings per share.
FINANCIAL REVIEW
Indequity`s results for the 6 months ending 31 March 2012 reflect a continuance
of the earnings growth experienced over the last 4 years with profit before tax
increasing by 13% on the excellent results reported for the same period of the
prior financial year. The results display Indequity`s effective utilisation of
capital resources with a pre-tax return on capital of 40%.
Taking into consideration the difficult economic conditions that persisted and
claim costs still under pressure throughout the short-term insurance industry,
Indequity is pleased to report an 8% increase in underwriting profit and a 10%
increase in gross written premium year on year. This growth is testament to
Indequity`s disciplined underwriting approach. Indequity`s claims costs as a
percentage of net written premium remained stable on 49% compared to the
industry average of approximately 61%.
Profit after tax increased by 7% from R1,7 million for the same period of the
prior financial year to R1,8 million. The lower increase in profit after tax
compared to profit before tax, is due to a higher effective tax rate for the
current period.
The continued improvement and growth of Indequity over this period resulted in
an increase in cash and cash equivalents from R16,0 million at 30 September 2011
to R19,0 million at 31 March 2012, an increase of R3,0 million.
PROSPECTS
Management remains optimistic about the prospects for the second half of the
year, but is cautious 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 a quality existing business.
ACCOUNTING POLICIES AND PREPARATIONS
The principal accounting policies applied in preparing the condensed interim
financial statements for the six months ended 31 March 2012 are in terms of
International Financial Reporting Standards ("IFRS") and are consistent with
those of the annual financial statements for the year ended 30 September 2011.
The interim financial statements were prepared in accordance with the
recognition, measurement, presentation and disclosure requirements of 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.
The financial statements have not been audited, or reviewed by the company`s
auditors.
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 JF Zwarts Johannesburg
Chief Executive Officer Chairman 16 May 2012
Directors: LJ van Rensburg, JF Zwarts*, G Williamson*,
AV van Jaarsveldt* (British), (*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
Prepared by: S Haripersad (Chief Financial Officer)
Date: 16/05/2012 07:05:04 Produced by the JSE SENS Department.
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