| Wed 19 Feb 2003, 15:28 | | Glenrand M.i.b - Unaudited Interim Report For The |
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GLENRAND M.I.B - Unaudited interim report for the six months ended 31 December
2002
Glenrand M.I.B Limited
(Registration number 1997/008001/06)
(`Glenrand M.I.B` or `the company` or `the group`)
JSE Share Code GMB ISIN No. ZAE000018529
Service Beyond Expectation
Unaudited interim report for the six months ended 31 December 2002
Income Statement
for the six months ended 31 December 2002
Unaudited Audited
6 months ended Year ended
31 December 30 June
2002 2001 2002
Note R`000 R`000 R`000
Operating revenue 3 483 267 369 335 832 333
- continuing 385 092 304 575 678 358
- discontinuing 2 98 175 64 760 153 975
Operating expenses (431 870) (318 491) (699 061)
- continuing (337 077) (259 894) (557 054)
- discontinuing 2 (94 793) (58 597) (142 007)
Trading profit 51 397 50 844 133 272
Interest paid (5 283) (3 615) (8 243)
Operating profit 46 114 47 229 125 029
Income from associates 5 506 1 118 5 464
Profit before non-trading
items 51 620 48 347 130 493
Non-operating income 2 554 1 058 3 330
Headline adjusting items 4 1 299 5 855 4 961
Profit before taxation 55 473 55 260 138 784
- continuing 50 439 49 811 127 585
- discontinuing 2 5 034 5 449 11 199
Taxation 5 (20 871) (17 227) (38 852)
Profit after taxation 34 602 38 033 99 932
Minority interest (10 392) (7 401) (21 496)
- continuing (5 389) (5 540) (14 342)
- discontinuing (5 003) (1 861) (7 154)
Profit for the period 24 210 30 632 78 436
Headline earnings per share,
fully diluted (cents) 9,8 11,2 32,8
Earnings per share, fully
diluted (cents) 10,1 13,8 34,9
Number of shares
- issued (000`s) 238 546 221 794 236 546
- weighted average, fully
diluted (000`s) 238 794 221 669 224 538
Statement of Changes in Equity
for the six months ended 31 December 2002
Non-
distribut-
Share Share able- Retained
R`000 capital premium reserves earnings Total
Balance as at
30 June 2001 4 428 - 33 878 74 399 112 705
Ordinary shares issued 305 32 136 - - 32 441
Preference shares
redeemed (1) - - - (1)
Translation of foreign
subsidiaries - - (7 222) - (7 222)
Shared earnings of
associates - - 3 884 (3 884) -
Profit for the period - - - 78 436 78 436
Dividends - - - (42 083) (42 083)
Balance as at
30 June 2002 4 732 32 136 30 540 106 868 174 276
Ordinary shares issued 40 3 418 - - 3 458
Translation of foreign
subsidiaries - - (4 214) - (4 214)
Shared earnings of
associates - - 3 718 (3 718) -
Profit for the period - - - 24 210 24 210
Dividends - - - (26 185) (26 185)
Balance as at
31 December 2002 4 772 35 554 30 044 101 175 171 545
Cash Flow Statement
for the six months ended 31 December 2002
Unaudited Audited
6 months ended Year ended
31 December 30 June
2002 2001 2002
R`000 R`000 R`000
Cash generated from operations 64 710 59 849 151 669
- continuing 55 015 49 820 133 374
- discontinuing 9 695 10 029 18 295
Movement in working capital 31 052 (93 135) (66 984)
Taxation paid (12 368) (8 656) (22 037)
Dividends paid (26 185) (22 129) (42 083)
Cash available from (utilised by)
operating activities 57 209 (64 071) 20 565
Cash (utilised by) generated from
investing activities (24 408) 6 516 (47 252)
Cash (utilised by) generated from
financing activities (7 385) 4 802 15 196
Net increase (decrease) in cash and
cash equivalents 25 416 (52 753) (11 491)
Cash and cash equivalents at
beginning of year 418 100 429 591 429 591
Cash and cash equivalents at
end of period 443 516 376 838 418 100
Segmental Analysis
for the six months ended 31 December 2002
Unaudited Audited
6 months ended Year ended
31 December 30 June
2002 2001 2002
R`000 R`000 R`000
Segmental revenues
Risk advisory services 321 877 233 770 536 690
Africa 222 447 165 904 376 372
United Kingdom 95 530 66 200 156 740
International - other 3 900 1 666 3 578
Risk management and technology 42 936 35 273 79 864
Africa 42 331 34 396 78 447
International - other 605 877 1 417
Benefit consulting, healthcare and
medical services 118 454 100 292 215 779
Africa 118 454 100 292 215 779
Total segmental revenues 483 267 369 335 832 333
Segmental profits
Risk advisory services 45 854 33 312 92 512
Africa 42 819 25 987 79 992
United Kingdom 2 435 8 134 12 496
International - other 600 (809) 24
Risk management and technology 3 999 3 584 3 555
Africa 4 113 3 759 3 691
International - other (114) (175) (136)
Benefit consulting, healthcare and
medical services 1 544 13 948 37 205
Africa 1 544 13 948 37 205
Total segmental profits 51 397 50 844 133 272
Balance Sheet
as at 31 December 2002
Unaudited Audited
31 December 30 June
2002 2001 2002
Note R`000 R`000 R`000
Assets
Fixed assets 201 744 144 035 196 742
Goodwill and trademarks 34 678 32 454 32 957
Deferred taxation 40 757 29 571 41 970
Investments 24 359 28 680 23 927
Current assets 1 131 123 1 180 089 1 348 908
Total assets 1 432 661 1 414 829 1 644 504
Equity and liabilities
Ordinary shareholders`
funds 171 545 139 975 174 276
Cost of shares held by
subsidiary (2 084) (2 578) (2 084)
Minority interest 63 831 38 071 52 676
Deferred taxation 7 986 10 661 7 991
Long-term liabilities 6 64 448 108 471 78 390
Current liabilities 1 126 935 1 120 229 1 333 255
Total equity and liabilities 1 432 661 1 414 829 1 644 504
Notes
1. Basis of accounting
These consolidated condensed interim financial statements are prepared in
accordance with AC 127: Interim Financial Reporting and South African Statements
of Generally Accepted Accounting Practice.
The accounting policies as set out in the 2002 Annual Report have been
consistently applied in producing the results, except for the adoption of AC133:
Financial Instruments: Recognition and Measurement. This has had no material
impact on the financial statements.
Certain comparative figures have been restated in order to achieve a more
meaningful presentation.
2. DISCONTINUING OPERATIONS
During the period under review it was announced that we would be disposing of
Glenrand MIB International Limited (which holds 100% of the equity share
capital of Glenrand Limited - which owns the UK operations), a subsidiary of our
international investment company Glensure Limited. The transaction is expected
to be completed by 31 March 2003.
3. Operating revenue
Unaudited Audited
6 months ended Year ended
31 December 30 June
2002 2001 2002
R`000 R`000 R`000
Includes:
Investment income 26 276 15 822 37 301
4. CALCULATION OF HEADLINE EARNINGS
Profit for the period 24 210 30 632 78 436
Less: Profit on disposal of
investment (377) (5 672) (6 185)
Add: Administration fee relating
to prior year - - 1 370
Add: Goodwill amortisation (413) (183) (2 536)
Add: Provision for impairment of
investment - - 2 593
Headline earnings 23 420 24 777 73 678
5. TAXATION
Unaudited Audited
6 months ended Year ended
31 December 30 June
2002 2001 2002
R`000 R`000 R`000
The group`s tax charge comprises
the following:
SA normal taxation 12 202 11 019 23 086
SA deferred taxation 1 200 1 469 3 893
STC 2 773 2 067 5 192
Foreign taxation 520 359 -
Discontinuing 2 388 1 851 4 865
Associates` taxation 1 788 462 1 816
20 871 17 227 38 852
6. LONG-TERM LIABILITIES
Interest bearing 57 669 85 442 64 097
Non-interest bearing 6 779 23 029 14 293
64 448 108 471 78 390
Operational Review
Business review
Our business
Glenrand MIB is a leading financial services group focused on providing risk
advisory services and solutions, employee benefits, investment advisory
services, selected financial products and full healthcare maintenance
organisation services and products.
Financial review
Overview
In line with our forecast when we released our results for the year ended 30
June 2002, half-year headline earnings per share as at
31 December 2002 of 9,8 cents are down 12,5% from 11,2 cents for the same period
ended 31 December 2001. The reason for the expected lower half-year earnings is
mainly attributable to the period change of our own group`s Professional
Indemnity insurance renewal date. In the 2002 financial year, we obtained a
renewal extension well into the second half of the financial year, and following
a 300% increase in our premium cost at that renewal, we absorbed the full impact
in the second half period. In the 2003 financial year, we completed our renewal
prior to the half-year end and have accordingly expensed the appropriate portion
of the full year`s cost as at 31 December 2002. The negative impact at the half-
year end will thus reduce over the second six-month period to 30 June 2003.
Income statement
The local Risk Advisory Services business experienced exceptional growth in
revenue and overall trading profit despite the Professional Indemnity insurance
cost impact outlined above. Their revenues increased 34% to R222 million, which
was mainly organic growth. Much higher market insurance rates impacted
positively on commission and investment income.
Protector Group, our Healthcare and Medical Services business, saw their
turnover rise 24% to R88 million. Their increase in revenues was driven partly
by organic growth of 17% and acquisitive growth of 7%. Their half-year trading
profit was significantly lower mainly due to higher depreciation costs in
respect of IT and medical facility upgrades in the administration and medical
services operations respectively. In addition, Protector Group was required to
drop its administration fee in the second half of the 2002 financial year,
accordingly the six-month results to 31 December 2002 reflect the lower
administration fee, whereas the six-month results to 31 December 2001 reflected
the higher administration fee.
Our Benefit Consulting business has not yet achieved its full potential. Half-
year revenues increased 3% to R31 million and a trading loss of R2,5 million was
recorded. The trading loss at the half-year is due mainly to the Professional
Indemnity insurance effect, slow new business growth and greater depreciation
costs on recent IT purchases.
Associate company earnings have increased by 392% to R5,5 million (2001: R1,1
million). This is as a result of outstanding performances in certain of our
investments, reflected by organic growth of 243%, as well as the acquisition of
a 45% interest in Swicon South Africa (specialists in payroll administration and
HR management systems) by our Benefit Consulting operations, and an increased
holding in our underwriting agencies.
Minority interest charges have increased by 40% to R10,3 million (2001: R7,4
million) as a result of a further sale of part of our equity stake in the UK to
management during the year ended
30 June 2002.
Balance Sheet and Cash Flow
The interest bearing long-term debt to equity ratio has continued to decrease to
25% as at 31 December 2002 from 29% at 30 June 2002. This lower gearing is as a
result of the decrease in interest bearing long-term liabilities to R58 million
at 31 December 2002 from R64 million at 30 June 2002.
The cash generation ratio of 1,17 as at 31 December 2002 has improved against
the ratio of 1,09 as at 30 June 2002.
STRATEGIC DEVELOPMENT GROWTH
International strategy
Since announcing the sale of our UK operation in November 2002, the group is
currently considering the needs of each of our local operations with respect to
their international requirements. Further communication and update on this
development will be made available as and when appropriate.
Africa strategy
The local Risk Advisory Services business anticipate taking advantage of
selective acquisition opportunities driven mainly by the impact of the recently
promulgated FAIS legislation. Our Benefit Consulting business has embarked on
developing a new strategic business plan aimed at addressing the opportunity in
this market segment.
The Protector Group, having achieved its infrastructure upgrade objectives over
the past 12 months, is now positioned to aggressively grow new membership.
Full year prospects
Trading conditions in our core operations are expected to remain favourable over
the next six-month period. The directors are confident that the group will
achieve real growth in headline earnings per share for the full year ending 30
June 2003.
Declaration of Interim dividend
Notice is hereby given that an interim dividend (No. 7) of 10 cents per share
(2002: 9 cents) has been declared. The following are the salient dates:
Last day to trade in order to participate
in the interim dividend Friday, 7 March 2003
Trading on or after this date will be
ex the interim dividend Monday, 10 March 2003
Record date Friday, 14 March 2003
Payment date Monday, 17 March 2003
On payment date, if so mandated, dividends due to holders of certificated
securities will either be transferred electronically to bank accounts or,
alternatively, cheques will be posted to their registered addresses.
Dividends in respect of dematerialised shareholdings will be credited to
shareholders` accounts with their Central Securities Depository Participant
(CSDP) or broker.
Shareholders may not dematerialise or rematerialise their holdings of ordinary
shares between Monday, 10 March 2003 and Friday,
14 March 2003, both dates inclusive.
On behalf of the board of directors
A W Mansfield D J Harpur
(Chairman - Non-executive) (Chief Executive Officer)
19 February 2003
DIRECTORATE
AWMansfield (Chairman), D JHarpur (Chief Executive Officer),
GCBeaver, RGCottrell, GTFerreira, GRGeorge, MPHutton,
CWKeey, JHHenderson, Dr MFKunene, MDWRyan, MBMartin (Alt), BHSeach, GMunro
(Alt).
Group secretary: EPrice.
Registered office
Surrey Place, 291 Surrey Avenue, Randburg 2194. PO Box 2544, Randburg 2125
Tel (011) 329-1111 Fax (011) 329-1333
e-mail info@glenrandmib.co.za website www.glenrandmib.co.za
Registrars
Computershare Investor Services Limited, 70 Marshall Street, Johannesburg
2001. PO Box 61051, Marshalltown 2107
Tel (011) 370-7700 Fax (011) 688-7715
An international risk advisory and financial services group
Date: 19/02/2003 02:59:00 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
