| Wed 22 Aug 2001, 0:00 | | Santam: Summary Of Operating Results For The Six M |
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AND DIVIDEND
SANTAM LIMITED AND ITS SUBSIDIARIES
Registration number 1918/001680/06
("Santam" or ("the company")
ISIN code: ZAE000006854
Share code: SNT
SUMMARY OF OPERATING RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2001
AND DECLARATION OF DIVIDEND
INCOME STATEMENT
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31
December
2001 2000 2000
R millions R millions R millions
Gross written premium 2 898 1 883 4 603
Underwriting surplus 52 (13) 101
Investment income 154 104 238
Interest received 92 67 152
Dividends received 62 37 86
Income from associates 1 3
Income before taxation 206 92 342
Taxation 47 18 81
Income after taxation 159 74 261
Minority interests 3 1 6
Attributable income 156 73 255
Earnings per share (cents) 142 86 261
Dividends per share (cents) 59 53.5 140
Dividend cover (times) 2.4 1.6 1.9
Note to income statement
The results for the six months to 30 June 2001 include the full six months'
consolidated results for Santam and Guardian, whereas during the same period
last year Guardian was consolidated as a subsidiary only from May onwards.
BALANCE SHEET
Unaudited Unaudited Audited
at at at
30 June 30 June 31
December
2001 2000 2000
ASSETS R millions R millions R millions
Non-current assets
Fixed Assets 41 80 53
Investments 3 534 3 343 3 237
Listed at market value 3 033 2 878 2 780
Unlisted at directors' valuation 445 401 401
Investment in associated companies 56 64 56
Deffered taxation 75 21
Current assets 1 970 1 786 1 926
Other debtors 885 954 805
Cash and cash equivalents 1 085 832 1 121
Total assets 5 545 5 284 5 237
EQUITY AND LIABILITIES
Capital and reserves 3 168 2 651 2 943
Share capital 1 054 1 046 1 046
Non-distributable reserves 962 540 808
Distributable reserves 1 152 1 065 1 089
Minority shareholders' interest 23 15 20
Deffered taxation 14
Current liabilities 2 340 2 618 2 274
Outstanding claims 1 125 1 102 1 067
Unearned premiums 739 807 726
Other creditors 476 709 481
Total equity and liabilities 5545 5 284 5 237
Number of shares in issue (millions) 110.1 109.8 109.8
Weighted average number of shares
(millions) 109.8 85.1 97.4
Net asset value per share (cents) 2877 2415 2 681
Solvency margin % 68 60 78
STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31
December
2001 2000 2000
R millions R millions R millions
Balance as at beginning of period 2 943 1 828 1 828
Shares issued 8 1 000 1 000
Share issue expenses (16) (16)
Revaluation surplus (deficit) and
realised gains of investments 184 (234) (30)
Deferred taxation on revaluation
surplus of investments (28) (35)
Attributable income to shareholders 156 73 255
Dividends paid (95) (59)
Balance as at end of period 3 168 2 651 2 943
CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
June June December
2001 2000 2000
R millions R millions R millions
Cash (utilised in) generated from
operations 73 (134) (268)
Income before taxation 206 92 341
Increase(decrease) in unearned premiums 13 (16) (62)
Depreciation charged 16 16 22
Change in working capital (10) (109) (320)
Investment income (154) (105) (238)
Other non-cash adjustments 2 (12) (11)
Dividends and interest received 134 120 243
Cash (utilised in) generated by
operating activities 207 (14) (25)
Taxation paid (33) (32) (53)
Dividends paid (95) (57) (116)
Cash (applied) retained from
operating activities 79 (103) (194)
Proceeds from ordinary shares issued 8 983 983
Cash generated from disposal of
(utilised in addition to) fixed assets (3) (5) 11
Acquisition of subsidiaries (1 587) (1 590)
Increase (decrease) in investments and
liquid assets 84 (712) (790)
Accounting policy
The accounting policy and procedures as applied by the group are the same as
those of the previous year.
Commentary
The period under review was characterised by solid growth, as reflected in
the 54% increase in gross written premium to R2 898 million. If Guardian
National was consolidated for the full six months in 2000, the increase for
the comparable period would have been 12%.The prominent position that the
company has attained in specialist markets is an indication of focused
growth. This ties in with the underwriting of Agri Risk Specialists'
business in the agricultural sector, as well as the transaction with
Associated Marine Underwriting Agency (Pty) Ltd (Amua) in which Santam
increased its shareholding to 100%. The Amua transaction has established
Santam as a leading player in the marine insurance market.
In contrast to the corresponding period last year, there was no pressure
from natural disasters on profit levels. This, together with a prudent
reinsurance policy, enabled the company to operate both the commercial and
personal portfolios profitably and declare an underwriting profit of R 52
million for the six months to 30 June 2001. To build upon this performance
and retain the cost of insured risk at acceptable levels, Santam will
continue to apply suitable and strict underwriting measures.
Santam is consolidating its product and service platform to increase
productivity and efficiency that will unlock value for policyholders and
business partners. Various initiatives and projects are concurrently being
developed to benefit from technological progress and to adjust to rapidly
changing consumer trends.
Earnings per share rose by 65% a share to 142c. This reflects a slight
improvement in trading conditions and meets budgeted expectations.
Prospects
Santam is now in the final stages of the successful merger with Guardian and
is poised to migrate to its administrative system more than 90 000 policies
that are still stored on the Guardian database. This will eliminate
administrative duplication and contribute towards cutting operating costs.
The policy integration project is likely to be completed by August 2002.
Santam remains concerned over the high levels of unemployment and crime
experienced in South Africa. To inhibit insurance fraud, we have co-operated
with other members of the South African Insurance Association in developing
a joint database for the sharing of claims information.
Taking into account the prevailing economic and social influences, the
board is guardedly optimistic that underwriting conditions will remain at
similar levels during the second half of the year. In view of this a
marginal improvement in earnings per share is expected for the full year,
Dividend (Number 94)
The board considers the recent practice of increasing the annual dividend by
at least 10% appropriate. Accordingly, the board has declared a final
dividend of 59 cents per share. The dividend will be paid to shareholders
registered in the company's books at closing time on Friday, 7 September
2001. The dividend is payable on Friday, 21 September 2001 and will be
transferred electronically to shareholders' bank accounts on that date.
Cheques dated 21 September 2001 will be posted on Friday, 14 September 2001
to shareholders that choose to receive payment by cheque.
Chief Executive
Dr. Johan van Zyl assumed office as chief executive on 1 August 2001,
succeeding Dr. Leon Vermaak who was appointed as chief executive of Sanlam
Limited.
On behalf of the board
MH DALING J VAN ZYL
Chairman Chief Executive
21 August 2001
Head Office and Registered Address
Head Office: 1 Sportica Crescent, Tyger Valley, Bellville 7530
PO Box 3881, Tyger Valley 7536 Telephone (021) 915 7000 Fax
(021) 914 0700
http://www.santam.co.za Registration number 1918/001680/06
Transfer Secretaries: Mercantile Registrars Limited
11 Diagonal Street, Johannesburg 2001
Telephone (011) 370 5000
Corporate information
Non-executive Directors:
MH Daling (Chairman), EM Groeneweg, AW Jack, JG le Roux, WS MacFarlane, AR
Martin, JE Newbury, CJ Oosthuizen, P de V Rademeyer, GE Rudman, JD
Sinclair, DK Smith
Executive Directors:
JA van Tonder, J van Zyl (Chief Executive), J W Wilken
Group Secretary:
CV du Plessis
