| Fri 30 Mar 2001, 0:00 | | Rentsure Holdings Limited Interim Report |
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RENTSURE HOLDINGS LIMITED
Rentsure Holdings Limited Reg no 05/23539/06
Rentsure Holdings Limited Interim Report and Dividend Declaration for the six
months ended 31 December 2000
Consolidated Income statement
Six months Six months Year
ended ended ended
31 Dec 2000 31 Dec 1999 30
Jun 2000
(Unaudited) R'000 R'000 R'000
Net premium income 120 433 118 824 241 350
Recurring premiums 119 121 113 882 235 049
Single premiums 1 312 4 942 6 301
Investment income 20 358 23 077 27 730
Income 140 791 141 901 269 080
Commission 20 907 18 997 53 659
Marketing, sales and
administration expenses 49 124 49 921 91 036
Taxation 2 050 197 703
Outgo 72 081 69 115 145 398
Excess of income over outgo 68 710 72 786 123 682
Claims and policyholder
benefits (64 421) (51 739) (108 818)
Transfer from/(to) life
assurance fund 4 000 (9 203) 2 343
Profit on ordinary
activities after taxation 8 289 11 844 17 207
Outside shareholders'
interest (2 795) (3 657) (5 789)
Profit for the period 5 494 8 187 11 41
Dividends (910) (1 415) (2 830)
Retained profit for the
period 4 584 6 772 8 588
Earnings 5 494 8 187 11 418
Earnings per share (cents) 13,6 20,2 28,2
Dividend per share (cents) 2,25 3,50 7,00
Dividend cover 6 6 4
Calculated on number
of shares issued ('000) 40 438 40 438 40 438
Consolidated Cash Flow Statement
Six months Six months Year
ended ended ended
31 Dec 2000 31 Dec 1999 30 Jun 2000
(Unaudited) R'000 R'000 R'000
Net cash flow from
operating activities 6 339 21 244 15 567
Cash from clients 120 433 118 824 241 350
Cash paid to suppliers
and employees (134 452) (120 657) (253 513)
Cash from operations (14 019) (1 833) (12 163)
Investment income 20 358 23 077 27 730
Net cash flow from
investment activities (22 494) (24 952) (26 065)
Acquisition of fixed assets (14 486) (5 356) (9 812)
Increase in investments (8 161) (20 455) (17 583)
Proceeds on disposal of
fixed assets 153 859 1 330
Net cash flow from
financing activities 3 330 (8 865) 6 236
Decrease in loans (2 974) (157) (765)
Other 6 304 (8 708) (7 001)
(12 825) (12 573) (4 262)
Cash beginning of the
period 35 998 40 260 40 260
Cash end of the period 23 173 27 687 35 998
Consolidated Balance Sheet
31 Dec 2000 31 Dec 1999 30 Jun 2000
(Unaudited) R'000 R'000 R'000
ASSETS
Non-current assets 275 616 264 201 263 906
Investments 102 169 89 337 94 008
Fixed property 127 028 121 352 126 539
Plant, machinery and
motor vehicles 35 049 41 730 31 989
Cost of control arising on
consolidation 11 370 11 782 11 370
Current assets 138 387 143 216 145 522
Stock 21 630 20 063 22 718
Debtors and deposits 93 584 95 466 86 806
Cash 23 173 27 687 35 998
Total assets 414 003 407 417 409 428
EQUITY AND LIABILITIES
Capital and reserves 95 498 93 121 88 120
Share capital 8 394 8 394 8 394
Non-distributable reserves 19 272 19 272 19 272
Distributable reserves 359 359 359
Retained income 38 416 39 016 33 833
Shareholders' funds 66 441 67 041 61 858
Minority shareholders'
interest 29 057 26 080 26 262
Non-current liabilities 243 003 251 902 248 231
Life assurance fund 240 453 248 999 244 453
Long-term liabilities 2 550 2 903 3 778
Current liabilities 75 502 62 394 73 077
Short-term loans 1 985 1 801 1 986
Amounts due to bankers 8 065 11 128 9 810
Creditors and provisions 60 889 47 437 58 289
Taxation 3 653 613 1 577
Shareholders for dividend 910 1 415 1 415
Total equity and
liabilities 414 003 407 417 409 428
Comment
Rentsure Holdings Limited, despite difficult economic conditions, achieved
satisfactorily results for the past six months. Earnings decreased from 20,2
cents to 13,6 cents per share compared to the corresponding period. These
earnings however represent 48,2% of the earnings for the full financial year
ended 30 June 2000. The tax liability of the life assurer increased from R197
000 to R2,05 million partially as a result of the transitional levy payable by
life assurers, and had a significant effect on the decrease in earnings. The
results of Alnet showed a turnaround during the first six months and it had a
positive contribution to the group results.
Recurring premium income from group business increased by 21,7% compared to the
corresponding period of last year. The cancellation of the premium deduction
facility by Persal in respect of new policies not only influenced new life
assurance business but also existing clients who cancelled their payments
because of uncertainty. Micro loans have still had a significant negative
influence on the disposable income of new and existing clients. Net premium
income including group business, increased by 4,6% to R 119 million despite
these circumstances.
As stated in the previous interim report, the company is in the process to
improve cost effectiveness, and cost savings are regarded as a high priority.
The company has consequently embarked on a comprehensive restructuring
programme during November 2000. Various unproductive branches have been closed
and the structure of the marketing and sales division has been streamlined. The
administration processes are currently being evaluated and will be adjusted if
necessary in order to improve efficiency and client service. Resulting from
this, if the once off costs relating to the restructuring process have been
deducted, administration costs for the six months decreased by 8,3% in real
terms compared with the previous year.
Marketing costs have also decreased in real terms by 12%. During the period
insignificant single premium business has been written. This has negatively
influenced the relationship of costs to premium income, by which life assurers
are compared.
The decrease in investment income was due to the overall decrease in the value
of the stock market during the period under review. Claims and benefits paid to
policyholders increased by 28,8% compared to the corresponding period mainly as
a result of higher maturity claims, and also as a result of an increase in
death claims as a result of the growth of the group business client base.
Prospects
The cost savings resulting from the restructuring programme should have an
impact on the results of the company during the next financial year. The
renewal of the Persal deduction facility in respect of new business that was
announced by the government should contribute to increased production, premium
income and consistency from July 2001. The Rentmeester Bridging Plan, a unique
product developed by Rentmeester Assurance, has been well received by the
market. It is expected that this product will contribute towards increased
recurring premium income in the future.
STRATE - electronic settlement
Rentsure Holdings Limited has been scheduled to be transferred to the STRATE
system of electronic settlement on 21 May 2001.
The conversion of share certificates into electronic form marked a significant
change for all shareholders. This practice can, however, be likened to the more
familiar process of depositing physical cash into an electronic bank account.
Those shareholders who have not yet entered the STRATE environment should
appoint a custodian bank (known in the STRATE environment as a Central
Securities Depository Participant or CSDP) or qualifying stockbroker as soon as
possible. Your share certificates should be submitted to your selected CSDP or
qualifying stockbroker who will ensure that they are converted into an
electronic record. This conversion into electronic form renders them eligible
for settlement in the STRATE environment.
From a corporate perspective, the company has dealt with all the practical and
legal ramifications of STRATE, but the success of our move into an
internationally competitive electronic settlement environment is largely
dependent upon the extent to which our shareholders participate in this
development. I therefore encourage those shareholders who have not yet done so
to deposit their share certificates into the STRATE environment as soon as
possible for conversion into electronic form.
We are gratified to finally be part of a new era in securities settlement and
to be reaping the benefits of a secure and efficient system.
Dividend
An interim dividend of 2,25 cents per share has been declared for the period
ended 31 December 2000. This dividend (no 72) will be paid to shareholders
registered as at 20 April 2001 and dividend cheques will be posted on or about
11 May 2001.
By order of the board
J Vermooten
30 March 2001
Registered office
106W Rentmeester Park
74 Watermeyer Street
Val de Grace
Pretoria 0184
Transfer secretaries
Mercantile Registrars Limited
11 Diagonaal Street
Johannesburg 2001
Directors
Joachim Vermooten (Chairman) Johannes Vermooten
Ms EV Vermooten Dr MI Vermooten W Stals Prof Q Vorster
M&D Graphic Design
kimb@mdgraphic.co.za Tel: +2711 789 6337 Fax: +2711 789 7151
