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Rentsure Holdings Limited - Interim Report For The Six Months
Ended 31 December 2002
RENTSURE HOLDINGS LIMITED
Registration number 1946/023539/06
Share code: RNT
ISIN code: ZAE000012811
("Rentsure")
CONSOLIDATED INCOME STATEMENT
Six Six
months months Year
ended ended ended
31 Dec 31 Dec 30 June
2002 2001 2002
R000 R000 R000
Unaudited Unaudited Audited
Net premium income 117 339 125 061 244 526
Recurring premiums 115 400 124 245 242 794
Single premiums 1 939 816 1 732
Investment income 11 985 17 058 18 449
Income 129 324 142 119 262 975
Commission 22 588 21 593 46 951
Marketing, sales and
administration expenses 48 161 48 503 96 468
Taxation - 2 000 2 400
Outgo 70 749 72 096 145 819
Excess of income over outgo 58 575 70 023 117 156
Claims and policyholder benefits (61 328) (66 631) (127 588)
Transfer to life assurance fund (11 047) (16 110) (14 850)
Loss on ordinary activities
after taxation (13 800) (12 718) (25 282)
Outside shareholders"
interest 3 591 3 022 6 437
Headline loss for the year (10 209) (9 696) (18 845)
Amortisation of goodwill (270) - (719)
Net loss (10 479) (9 696) (19 564)
Net loss (10 479) (9 696) (19 564)
Loss per share (cents) (25,9) (24,0) (48,4)
Headline loss (10 209) (9 696) (18 845)
Headline loss per share (cents) (25,2) (24,0) (46,6)
Calculated on number
of shares issued ("000) 40 438 40 438 40 438
Consolidated balance sheet
31 Dec 31 Dec 30 June
2002 2001 2002
R000 R000 R000
Unaudited Unaudited Audited
ASSETS
Non-current assets 229 466 277 646 260 335
Investments 88 731 109 407 108 323
Fixed property, machinery
and equipment 130 923 157 722 141 930
Cost of control arising
on consolidation 9 812 10 517 10 082
Current assets 127 888 130 197 133 160
Inventories 30 887 26 314 30 082
Debtors and deposits 75 062 73 951 61 297
Cash 21 939 29 932 41 781
Total assets 357 354 407 843 393 495
EQUITY AND LIABILITIES
Capital and reserves 54 600 82 211 68 670
Share capital 8 394 8 394 8 394
Non-distributable reserves 19 272 19 272 19 272
Distributable reserve 359 359 359
Retained income 7 839 28 185 18 317
Shareholders" funds 35 864 56 210 46 342
Minority shareholders"
interest 18 736 26 001 22 328
Non-current liabilities 194 697 257 435 249 829
Life assurance fund 191 847 254 444 246 959
Long-term liabilities 2 850 2 991 2 870
Current liabilities 108 057 68 197 74 996
Short-term loans 251 952 455
Amounts due to bankers 5 870 5 530 4 985
Creditors and provisions 101 936 61 305 69 154
Taxation - 410 402
Total equity and liabilities 357 354 407 843 393 495
Net asset value per share
(cents) 88,7 139,0 114,6
Net tangible asset value
per share (cents) 64,4 113,0 89,7
Calculated on number
of shares issued ("000) 40 438 40 438 40 438
CONSOLIDATED CASH FLOW STATEMENT
Six Six
months months Year
ended ended ended
31 Dec 31 Dec 30 June
2002 2001 2002
R000 R000 R000
Unaudited Unaudited Audited
Cash retained from
operations 15 059 10 143 45
Cash from clients 117 339 125 060 244 526
Cash paid to suppliers
and employees ( 132 076) (136 727) (271 007)
Cash from operations (14 737) (11 667) (26 481)
Increase in current assets 18 370 12 275 13 260
Investment income 11 985 9 927 18 449
Taxation paid (559) (392) (5 183)
Net cash flow from
investment activities 21 058 (4 509) 10 130
Acquisition of property
and equipment 1 030 (1 469) 10 701
Increase in investments 19 592 (3 427) (2 343)
Proceeds on disposal
of assets 436 387 1 772
Net cash flow from
financing activities (55 959) (7 516) (208)
Long-term borrowings (20) (1 034) 51
Short-term borrowings (204) (787) (379)
Amounts due to bankers 885 (4 280) 1 290
Net outflow in respect
of portfolio transfer (56 620) - -
Dividends paid - (1 415) (910)
Outside shareholders - - (260)
Net increase in cash (19 842) (1 882) 9 967
Cash at the beginning
of the year 41 781 31 814 31 814
Cash at the end of the year 21 939 29 932 41 781
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six Six
months months Year
ended ended ended
31 Dec 31 Dec 30 June
2002 2001 2002
R000 R000 R000
Unaudited Unaudited Audited
Shareholders" funds at the
beginning of the year 46 342 65 906 65 906
Changes in retained
income (10 478) (9 696) (19 564)
Net loss for the year (10 478) (9 696) (19 564)
Shareholders" funds at
the end of the year 35 864 56 210 46 342
COMMENT ON RESULTS
The six months under review were dominated by various actions to recover
from the low volumes of new business which occurred during the period of
the proposed merger with Assupol.
The unbundling of the distribution network which had been merged with that
of Assupol resulted in a branch network comprising 22 branches and five
service points countrywide.
New Rentmeester products were developed, completed and launched during the
latter part of the six months under review.
Major cost savings were introduced over a period which has lowered the
level of future administration costs by R20 million per annum. Once-off
costs relating mainly to personnel reductions, of about R3 million, were
incurred in the six months under review.
The establishment of a new retention unit succeeded in reducing lapses
substantially as compared to the previous year.
A quota share reinsurance agreement was concluded with a prominent
international reinsurer which resulted in a significant improvement in the
capital adequacy position of Rentmeester Assurance Limited. This enabled
all the interests of group schemes and all other policyholders to be
protected.
Losses were, however, incurred during the period due to a general decline
in the investment markets and due to insufficient new business volumes
written in the first six months of the year. New individual business
volumes are increasing steadily on a month to month basis and based on
these increases it is expected that a break even on new business should be
achieved prior to year end.
New group business showed strong monthly growth during the period and it
is expected that group business will remain a strong contributor to the
results of Rentmeester Assurance.
ALNET
During the period under review the profits of Alnet were in excess of
budget and it is expected that this will continue for the year.
PROSPECTS
A restructuring of the appointment of administrators in the pensioner
funeral market early in the second half of the financial year is expected
to add to the growth of group funeral business on a more sustainable
basis.
The trend in the increase of individual business written is expected to
continue.
The steps taken to return the company to profitability are continuing and
various projects relating to this have been undertaken. It is expected
that, given time the increase in new business, the decrease in
administration costs and the improvement in investment markets will return
the company to profitability.
ACCOUNTING POLICIES
The unaudited results for the six months ended 31 December 2002 have been
prepared using accounting policies, which are in conformity with
Statements of Generally Accepted Accounting Practice in South Africa and
consistent with those policies applied in the prior year.
DIVIDENDS
No dividends were declared for the period.
On behalf of the Board
J Vermooten
(Chairman)
28 March 2003
Rentsure Holdings Limited
Registration number 1946/023539/06
("Rentsure" or "the company")
Share code RNT ISIN number ZAE 000012811
Registered office
106W Rentmeester Park 74 Watermeyer Street
Val de Grace Pretoria 0184
Transfer secretaries
Computershare Investor Services Limited
70 Marshall Street Johannesburg 2001
Directors
Joachim Vermooten (Chairman) Johannes Vermooten
Dr MI Vermooten Prof Q Vorster
R de Kock (Company Secretary)
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