| Thu 7 Feb 2002, 0:00 | | Sa Eagle Insurance Company Limited - Announcement |
|
results and dividend declaration for the year ended 31 December 2001
SA EAGLE INSURANCE COMPANY LIMITED
A member of the Zurich Financial Services Group
South African Eagle Insurance Company Limited
Announcement of the audited group results and dividend declaration for the
year ended 31 December 2001
Comments
The strong growth pattern experienced during the first half of the year
continued with gross premium income up 27,4% with the company benefiting
from the consolidation, which has taken place in the short-term insurance
market.
Despite this exceptional growth the underwriting loss has reduced to R8,7m
from the R13,0m loss in 2000. All underwriting accounts performed
satisfactorily with the exception of the motor account where increased
incidence of claims for vehicle damage offset the impact of rating action
taken.
Increased reinsurance costs, particularly following the tragic events of
September 11th, will reinforce the moves, which were already under way in
the market to ensure that appropriate rating is enforced. With the support
of SA Eagle's major shareholder, Zurich Financial Services, places the
company in an excellent position to maintain its recent growth strategy
whilst obtaining appropriate premiums for risks accepted.
The initiatives previously reported on are progressing well with the Golden
Eagle `e-commerce' business to business solution showing significant premium
growth. The restructuring programme, known as Project Aquilla Rex, now in
pilot stage with roll-out to all parts of the business by the end of 2002.
Substantial cost savings and improvements in service levels for clients and
operational procedures will result from the use of workflow techniques.
Investment income was R13,8m down on year 2000 at R156,2m due to the return
of excess capital in 2000 through the payment of special dividends totalling
R596,8m. Included in investment income was R16,1m interest as a result of
the successful appeal against NBS for the return of deposits totalling R25m.
The surplus on disposal of investments of R114,8m (2000: R184,7m) reflected
the continuance of the programme of disposals to rebalance the portfolio of
investments following the payment of special dividends in 2000.
The taxation charge includes an amount of R44,8m in respect of the reversal
of the tax relief previously allowed on the statutory contingency reserve.
Earnings per share after adjusting for exceptional tax charges, interest
from the NBS case, restructuring costs and impairment of the value of the
investment in the Zimbabwe subsidiary, were 1 567,0 cents per share (2000: 2
394,1 cents per share). This reduction is as a result of the decline in
investment income following the payment of special dividends in 2000 and a
reduced level of gains from realisation of investments.
Solvency stands at 53,9% (December 2000: 60,3%) notwithstanding the
substantial increase in premium growth and the impact of the abnormal tax
charge.
Dividend declaration No. 61
1. The directors have declared a final dividend for 2001 of 450 cents per
share (2000: 450 cents per share), making a total for the year of 700 cents
per share (2000: 700 cents per share excluding the special dividend paid in
2000 of 4,900 cents per share).
2. The dividend is payable in accordance with the following timetable:
Last day to trade cum the dividend 5 April
Shares commence trading ex the dividend
from the commencement of business on 8 April
Record date 12 April
Payment date 15 April
Shareholders may not dematerialise or rematerialise their holdings of SA
Eagle shares between Thursday, 28 March 2002 and Friday 12 April 2002, both
days inclusive.
By order of the Board
P H P O'Sullivan Chairman
N V Beyers Managing Director
Johannesburg
6 February 2002
Summarised income statement
31 Dec 31 Dec
2001 2000
Note R'000 R'000
GROSS WRITTEN PREMIUM 2 378 997 1 867 318
Underwriting loss 6 (8 682) (12 974)
Investment income 7 156 207 169 992
Investment expenses (6 753) (4 463)
140 772 152 555
Restructuring cost (7 175) (43 225)
Impairment of investment
in Zimbabwe subsidiary (10 000) -
NET REALISED surplus on
disposal of investments 114 761 184 671
OPERATING INCOME
before taxation 238 358 294 001
Taxation 3 (82 311) (101 896)
NET INCOME after taxation 156 047 192 105
Outside shareholders'
interest therein (13 744) (5 371)
Net income attributable
to members 142 303 186 734
Dividends - Normal (85 257) (30 449)
- Special - (596 795)
RETAINED INCOME/(DEFICIT) 57 046 (440 510)
Abridged balance sheet
31 Dec 31 Dec
2001 2000
Note R'000 R'000
ASSETS
Investments 8 957 949 980 010
Fixed assets 69 747 50 559
Current assets 672 071 508 240
Deposits and cash at bankers 598 574 453 091
TOTAL ASSETS 2 298 341 1 991 900
EQUITY AND LIABILITIES
Capital and reserves 1 013 513 936 181
Minority interest 55 756 23 669
Deferred taxation 15 289 (2 654)
Post-retirement medical aid cost 70 000 70 000
Technical provisions 830 902 689 078
Current liabilities 312 881 275 626
TOTAL EQUITY AND LIABILITIES 2 298 341 1 991 900
Condensed statement of changes in equity
31 Dec 31 Dec
2001 2000
R'000 R'000
Balance at beginning of period 936 181 1 592 902
Change in accounting policy
- post-retirement medical cost - (42 070)
Revaluation of investments 9 769 (180 759)
Translation of foreign subsidiaries 10 517 1 989
Taxation on movement of
statutory contingency reserve - 4 629
Net profits for the period 142 303 186 734
Dividends (85 257) (627 244)
Balance at end of period 1 013 513 936 181
Condensed cash flow statement
31 Dec 31 Dec
2001 2000
R'000 R'000
Cash available from/(utilised in)
underwriting operations 113 593 (96 940)
Net increase in working capital (75 697) (3 781)
Dividends and interest received 156 207 169 992
Taxation paid (93 461) (23 554)
Dividends paid (85 257) (675 962)
Cash effect of investing activities 130 098 503 990
Increase/(Decrease) in deposits
and cash 145 483 (126 255)
Notes
1. Accounting policies
Other than the change in accounting
policy detailed in note 2, the same
accounting policies and methods
of computation are followed in the
current financial statements as
compared with the previous year's
annual financial statements.
2. Change in accounting policy
2.1 Basis of consolidation
During the past four years, the results
of SA Eagle Risk Financing Limited
were consolidated excluding the cell
captive results. This basis was changed
during the current year and SA Eagle
Risk Financing Limited is now fully
consolidated with cell captive results
taken as a minority interest.
Comparative figures have been restated.
2.2 Post-retirement medical aid cost
During the year, the company changed
its accounting policy with respect to the
recognition of the cost of post-retirement
medical aid benefits. Liabilities relating
to these benefits are now recognised in
terms of the revised accounting statement
on employee benefits. The after-tax effect
of this change on the reserves brought
forward is R42m.
3. Taxation
Included in the taxation charge in
the current year is R44,8m additional
taxation in respect of the withdrawal of
the tax benefits previously permissible
in respect of the statutory
contingency reserve.
4. Determination of headline earnings
Net income attributable to members
of the company 142 303 186 734
After-tax adjustment for:
- Net realised surplus on disposal
of investments and fixed assets (113 001) (182 834)
- Impairment of investment in
Zimbabwe subsidiary 10 000 -
- Reverse provision for
restructuring cost (12 112) (24 710)
- Provision for restructuring cost 8 400 12 112
Headline earnings 35 590 (8 698)
Headline earnings per share (cents) 292,21 (71,4)
5. Other financial information
Earnings per share before
adjustment (cents) 1 168,4 1 533,2
Earnings per share after excluding
exceptional tax charges, interest from
NBS case, restructuring costs and
impairment of investments in
subsidiary (cents) 1 567,0 2 394,1
Dividend per share (cents)
- Normal paid/declared 700,0 700,0
- Special paid - 4 900,0
Number of shares in issue 12 179 500 12 179 500
Net asset value per share (cents) 8 321 7 687
Solvency margin (%) 53,9 60,3
Dividend cover (excluding
special dividend) 1,67 2,19
6. Underwriting loss after
charging/(crediting):
Depreciation 13 666 18 076
(Surplus)/Loss on disposal
of fixed assets (240) 372
7. Investment income
Interest 113 998 125 317
Dividends 42 209 44 675
Total investment income 156 207 169 992
8. Investments
Fixed properties 57 414 52 734
Mortgages and loans 54 534 19 303
Government and other
approved securities 178 674 192 411
Public boards, annuities and
other fixed interest securities 102 120
290 724 264 568
Listed shares 582 964 625 409
Unlisted shares 84 261 90 033
Total investments 957 949 980 010
Transfer secretaries
Mercantile Registrars Limited, 8th Floor, 11 Diagonal Street
Johannesburg, 2001
South African Eagle Insurance Company Limited
(Incorporated in the Republic of South Africa)
(Registration number 1965/06764/06)
Share code: SAE ISIN code: ZAE000006243
Registered office
5th Floor, SA Eagle House, 70 Fox Street, Johannesburg, 2001
www.saeagle.co.za
