| Tue 7 Aug 2001, 0:00 | | Mutual & Federal Insurance Company Limited - Group |
|
(M+F) (MAF) (ZAE 000010823)
GROUP UNAUDITED INTERIM REPORT FOR THE HALF YEAR ENDED 30 JUNE 2001 AND
DIVIDEND ANNOUNCEMENT
Year to
INCOME STATEMENT 30/6/01 30/6/00 Change 31/12/00
R'm R'm % R'm
Technical account
Gross premiums 2,382 1,519 57 3,468
Net premiums 2,151 1,387 55 3,152
Net underwriting surplus/(loss)
(note 1) 28 (31) 2
Investment return on insurance
Activities 76 63 21 144
General insurance result 104 32 225 146
Long term investment return on
shareholders' funds 203 235 381
Operating income based on long term
investment return 307 267 15 527
Non-technical account
Short-term investment fluctuations 152 (285) 2
Dividends, interest and property
income 163 151 361
Realised surplus on investments 385 - 411
Unrealised deficit on
investments (117) (138) (245)
Allocated investment return
transferred to technical account (279) (298) (525)
Goodwill and retrenchment costs (5) - (10)
Income/(loss) before taxation 454 (18) 519
Taxation (23) (11) (49)
431 (29) 470
Minority shareholders / share
of associates 7 - 10
Net income/(loss) 438 (29) 480
Headline earnings 291 256 14 488
Headline earnings per share
(cents) (note 2) 121 106 14 203
Operating ratio (%) (note 3) 98.7 102.3 99.9
Basic earnings per share (cents)
(note 2) 182 (12) 199
Net asset value per share (cents) 1,630 1,640 1,486
Number of shares in issue (million)
- at period end 241.5 240.8 241.0
- weighted average 241.3 240.7 240.8
Determination of headline earnings
Operating income based on long
term investment return 307 267 527
Taxation (23) (11) (49)
Minority shareholders / share
of associates 7 - 10
Headline earnings 291 256 488
BALANCE SHEET As at As at As at
30/6/01 30/6/00 31/12/00
Assets R'm R'm R'm
Non-current assets 4,444 4,436 4,656
Fixed assets 67 37 63
Investments at market value 4,110 4,282 4,288
Ordinary shares 3,024 2,977 3,365
Government stock 227 130 362
Other 859 1,175 561
Investment in associated companies 96 97 125
Goodwill 98 - 103
Deferred taxation 73 20 77
Reinsurers' share of technical provisions 454 301 445
Current assets 1,832 925 1,336
Debtors / other 727 541 605
Bank balances 1,105 384 731
6,730 5,662 6,437
Liabilities
Capital and reserves 3,936 3,950 3,581
Interest of outside shareholders
in subsidiaries 129 4 128
Non current provisions 118 64 117
Gross technical provisions 2,363 1,550 2,344
Current liabilities and provisions 184 94 267
6,730 5,662 6,437
MUTUAL & FEDERAL INSURANCE COMPANY LIMITED
Group unaudited interim report for the half year ended 30 June 2001 and
dividend announcement(continued)
STATEMENT OF CHANGES IN EQUITY
Share Contingency Retained
R'm capital Reserve income Total
Balance at 1 January 2001 103 279 3,199 3,581
Net income for the period 438 438
Transfer to contingency reserve 17 (17) 0
Dividends paid (87) (87)
Issue of share capital 4 4
Balance at 30 June 2001 107 296 3,533 3,936
NOTES
1. Integration costs
Included in the underwriting results are non-recurring costs of R20 million
in respect of expenses paid for the integration of CGU Holdings ("CGU")
(2000: R nil).
2. Earnings per share
Headline earnings per share are calculated on operating income based on the
long term investment return, after taxation and share of associated
companies retained income. Basic earnings per share based on net income
after short-term investment fluctuations, goodwill and retrenchment costs.
3. Operating ratio
This reflects the ratio of total insurance expenditure to net earned
premiums.
4. Change in accounting policy
During the year the company changed its accounting policy with regard to
provisions for dividends. Dividends in respect of the current period, but
only declared after the balance sheet date, were previously recognised as a
liability at the balance sheet date. Such dividends are now accounted for
in the period in which they are paid. Prior year figures have been restated
to recognise this change in accounting policy.
COMMENTS
The net income for the six months ended 30 June 2001 includes the results of
CGU which was formally acquired in October 2000 and consolidated from that
date. The integration of the CGU activities has progressed well and will be
complete by the end of the year.
The General Insurance Result of R104 million, which includes an
underwriting surplus of R28 million, represents a pleasing improvement on
2000. This result is largely attributable to an increase in rating levels
and an absence of substantial weather-related claims which characterised the
first quarter of 2000.
There were, however, a number of significant fires during the period which
severely impacted the property portfolio. There has been a return to
profitability in the accident and engineering and marine portfolios, but,
the incidence of motor vehicle accidents and theft remains high, and
corrective action is being taken to ensure a return to profitability on the
motor account.
Headline increased by 14%. This is particularly encouraging in view of the
special dividend of 300 cents per share declared in November 2000, which had
the effect of reducing shareholders` funds by approximately R800 million.
The solvency margin remains strong and was in excess of 100% at 30 June
2001.
The Board is cautiously optimistic about the prospects for the balance of
the period in light of the improvement in the underwriting cycle.
It should however be noted that short-term insurance results fluctuate and
the outturn for the first six months is not necessarily indicative of the
likely results for the remainder of the year.
DECLARATION OF DIVIDEND (NUMBER 63)
An interim dividend of 22 cents per share has been declared payable to
shareholders in respect of the six months to 30 June 2001.
In accordance with the trading requirements under the STRATE environment,
the last day to trade to participate in the interim dividend will be Friday
7 September 2001. The shares will commence trading ex-dividend on Monday 10
September 2001, and the record date will be Friday 14 September 2001.
Payment will be made on Monday 17 September 2001.
The last date to register for certificated shareholders will be Friday 14
September 2001. Certificated shareholders may not dematerialise their
shares between Friday 31 August and Monday 17 September 2001. Dividend
cheques will be posted on Monday 17 September 2001.
On behalf of the Board
K T M Saggers
(Chairman)
B Campbell
(Managing Director)
Registered Office: 19th Floor, Mutual & Federal Centre, 75 President
Street, Johannesburg 2001
Transfer Secretaries: Mercantile Registrars Limited, 11 Diagonal Street,
Johannesburg 2001
7 August 2001
