| Tue 13 Apr 2004, 9:03 | | AUDITED RESULTS FOR THE YEAR |
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INSURANCE OUTSOURCING MANAGERS HOLDINGS LIMITED - AUDITED RESULTS FOR THE YEAR
ENDED 29 FEBRUARY 2004 AND DIVIDEND DECLARATION
INSURANCE OUTSOURCING MANAGERS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013121/06)
("INSURE" or "the company")
JSE SHARE CODE INS ISIN: ZAE000033221
AUDITED RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2004 AND DIVIDEND DECLARATION
The audited results for the year ended 29 February 2004, the interim results for
the six months ended 31 August 2003 and the audited results for the year ended
28 February 2003 are presented below.
Consolidated Income Statements
Audited Reviewed Audited
results interim results
for the results for for the
year ended the six year ended
29 February months ended 28
2004 31 August February
R"000 2003 2003 R"000
R"000
Gross collections 2 042 595 914 966 1 085 108
Revenue 31 131 16 682 21 542
Net income before 4 336 1 971 1 603
taxation
Taxation (1 477) (734) (186)
SA Normal Taxation (1 408) (665) (117)
Secondary Taxation on (69) (69) (69)
Dividends
Net income after 2 859 1 237 1 417
taxation
Dividends (555) (555) (555)
Attributable income 2 304 682 862
retained for the period
Determination of
headline earnings
Attributable income 2 859 1 237 1 417
Add: 39 - -
Amortisation of
Goodwill
Deduct: Profit on (43) (28) (84)
disposal of assets
Headline earnings 2 855 1 209 1 333
Earnings per share
Shares in issue (000"s) 111 092 111 092 111 092
Earnings per share 2.6 1.1 1.4
(cents)
Headline earnings per 2.6 1.1 1.4
share (cents)
Dividends per share 0.5 0.5 0.5
(cents)
Consolidated Balance Sheets
Audited Reviewed Audited
As at interim As at
29 February As at 28
2004 31 August February
R"000 2003 2003
R"000 R"000
ASSETS
Non-current assets 21 064 19 483 20 781
Property, plant and 17 802 17 557 16 602
equipment
Deferred taxation 2 170 1 926 2 756
Loans receivable 425 - 1 423
Goodwill 667 - -
Current assets 110 660 92 704 65 820
Accounts receivable 102 341 75 994 60 051
Less: unearned finance (5 177) (5 189) (4 183)
charges
Cash resources 13 496 21 899 9 952
Total assets 131 724 112 187 86 601
EQUITY AND LIABILITIES
Capital and reserves 18 662 16 682 16 358
Issued capital 53 654 53 654 53 654
Non-distributable 2 698 2 735 2 773
reserves
Distributable reserves (37 690) (39 707) (40 069)
Current liabilities 113 062 95 505 70 243
Accounts payable 112 266 94 342 66 918
Taxation 256 71 92
Shareholders for 9 561 555
dividend
Bank overdrafts 531 531 2 678
Total equity and 131 724 112 187 86 601
liabilities
Shares in issue (000) 111 092 111 092 111 092
Net asset value per 16.8 15.0 14.4
share (cents)
Tangible net asset 16.2 15.0 14.4
value per share
Consolidated Statement of Changes in Equity
Non
Share Share Accumul distrib
Capital Premium ated utable Total
R`000 R"000 Loss Reserve R"000
R"000 R"000
Balance reported at 28 11 53 643 (40 2 773 16 358
February 2003 069)
Earnings attributable to
shareholders
Ongoing operations - - 2 859
2 859
Revaluation depreciation - - 75 (75) -
Interim dividend paid - - (555) - (555)
Balance at 29 February 11 53 643 (37 2 698 18 662
2004 690)
Abridged Consolidated Cash Flow Statements
Audited Reviewed Audited
Twelve Six Months Twelve
Months 31 August Months
29 2003 28
February R"000 February
2004 2003
R`000 R`000
Cash flow generated by 9 340 14 835 14 252
operating activities
Cash flow used in investing (3 649) (2 160) (4 146)
activities
Cash flow generated by 0 1 419 5 415
financing activities
Cash and cash equivalents - 7 274 7 274 (8 247)
beginning of year
Cash and cash equivalents - 12 965 21 368 7 274
end of year
Segmental Analysis
Audited Reviewed Audited
Twelve Six Months Twelve
Months 31 August Months
29 2003 28
February February
2004 2003
% R"00 % R"000 % R`000
0
Revenue
Net interest earned 63% 19 55% 9 219 60% 13
683 014
Fees charged 31% 9 30% 4 915 33% 7 090
611
Other 1 2 548 1 438
6% 837 15% 7%
Revenue as reported 100 31 100 16 100 21
% 131 % 682 % 542
Accounting policies
This report has been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice. The accounting policies and methods of
measurement are in all material respects consistent with those applied in
previously reported financial statements and have been consistently applied
throughout the period under review. INSURE"s auditors, Compendium Pretoria Inc.
have given an unqualified audit opinion, and their report is available for
inspection at INSURE"s offices.
Nature of business
INSURE is a service provider to the short term insurance market, and has grown
into a leading position as a preferred, independent solution, for premium
collections, premium financing and outsource services for participants in this
industry.
Overview
The Board of INSURE is pleased to present the results for the year ended 29
February 2004, being the first full reporting year after a change in control
occurred whereby 55% of INSURE"S shares were acquired by Management. For the
year, INSURE continued following a growth strategy with its focus on becoming
the preferred independent financial services outsource provider to the short-
term insurance industry. The Board believes this is the foundation for ongoing
and sustainable profitability.
Significant growth for the past four consecutive six-month periods, resulted
from an increase in market share, ongoing client loyalty, continued high service
levels, enhanced capacity and increasing cost effectiveness. The growth has been
enhanced by the strategic acquisition of Premium Credit SA (Proprietary) Limited
("Premium Credit") as detailed below, expanding the premium financing business
substantially.
Ongoing and rapid changes to the short term insurance market continues to create
opportunities for INSURE as a specialist provider of niche services with a
flexible infrastructure. This flexibility of INSURE allows for quick response
and appropriate repositioning in a dynamic market, thereby delivering value and
a new level of credit management through which its clients and industry users
can operate.
Review of operations
Results
For the year under review, an 88% growth in gross collections and premiums
handled was achieved, supporting a 45% increase in turnover, from R21.5 million
to R31.1 million. Net income before taxation increased by 270% and net income
after tax by 102%, with headline earnings increasing by 114%. These results were
achieved through INSURE"s strategy of achieving better economies of scale, cost
efficiencies and competitive pricing, whist maintaining its quality of service
and deliverables.
Additional comments
As a specialist finance and outsource company, turnover and margin was adversely
affected by the phased reduction in Prime lending rates - from 17% to 11.5% (a
32% rate reduction) in 2004. In addition, the contribution of the Premium Credit
acquisition (see below) was limited to 5 months, starting 01 October 2003.
Changes in Equity
Prior year adjustment reflected at Interim - 31 August 2003.
In the Interim Results for the six months ended 31 August 2003, an adjustment
was reflected against prior year retained earnings in the Consolidated Statement
of Changes in Equity of R0.4 million, representing an initial disallowance by
the Receiver of Revenue of expenses totalling R1.2 million during the 2000
financial period. These expenses were incurred by Auto Space Age Systems
Limited ("ASAS") during their closure, and were incurred prior to Insurance
Outsourcing Managers (Pty) Ltd"s reverse listing into the ASAS shell during
October 2000. These expenses were subsequently allowed, resulting in no effect
on the year ended 28 February 2003"s opening retained income, and no impact on
the 29 February 2004 results.
Acquisition - Premium Credit
As announced on 09 October 2003, INSURE acquired 100% of the shares in and
claims against Premium Credit from FirstRand Bank Limited with effect from 01
October 2003, for an effective purchase consideration of R955 000. The rationale
was to expand INSURE"s premium financing activities in accordance with its
strategy to grow its core products and competencies and optimise scale
economies. Premium Credit was successfully integrated into the INSURE group.
Transfer of listing
During the year under review, INSURE applied for a transfer of its listing from
the main board of the JSE Securities Exchange South Africa ("JSE") to the
Alternative Exchange of the JSE ("AltX"). INSURE"s application was approved and
its listing transferred to AltX in January 2004. INSURE based this decision on,
inter alia, financial considerations given expenses and reduced JSE Listings
Requirements with regard to categorisation of transactions. An important
consideration was also for INSURE, as a growing small cap company, to access a
"new" and willing investor market. (www.altx.co.za).
Prospects
Management will continue to focus on aligning strategic and operational
objectives, thereby supporting an expanding and sustainable client base through
INSURE"s quality, tailored products and service solutions for participants in
the market. We believe this focus will result in organic growth and opportunity
creation in all areas of our business.
Dividend
The board of directors are pleased to announce that a final dividend of 1.50
cents per share (one and one half cents), has been declared, and is payable to
shareholders on Monday, 10 May 2004. The last date to trade "Cum" dividend will
be Friday, 30 April 2004. "Ex" dividend trade will commence on Monday, 03 May
2004 and the record date will be Friday, 07 May 2004. An interim dividend of
0.50 cent (one half cent) was paid, bringing the total dividend for the year to
2 cents per share. Shareholders are advised that share certificates may not be
dematerialised or rematerialised between Monday, 03 May 2004 and Friday, 07 May
2004 both days inclusive.
The audited consolidated profits after tax (before STC) for the year ended 29
February 2004 is R2.928m. This represents, on a cumulative dividend of 2 cents,
a dividend cover of approximately 1.3 times.
For and on behalf of the Board
D.G Eriksson D. M. Burns
Chairman Chief Executive
13 April 2004
Directors
D.G. Eriksson* (Chairman), D.M. Burns (Chief Executive)(British), C.J.P.
Cilliers (Managing), B.B. Dunn* (Alternate A.J. Dunn) M.Ferreira*
(* Non-Executive)
Secretary and registered office
Mr. J. Vogelzang, 6 St Giles Street, Randburg, 2125.
Transfer secretaries
Computershare Limited, 70 Marshall Street, Johannesburg.
Postal address and E-mail
P.O. Box 2867, Randburg, 2125
and
"results2004@ioh.co.za"
Designated Advisor
Arcay Group Limited
Date: 13/04/2004 09:00:09 AM Produced by the JSE SENS Department
