| Mon 21 Jun 2004, 10:35 | | AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH |
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CAPITAL ALLIANCE HOLDINGS LIMITED - AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH
2004
CAPITAL ALLIANCE HOLDINGS LIMITED
Registration number : 1952/000756/06
Share Code: CPT
ISIN: ZAE 000011904
AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2004
HIGHLIGHTS
* Integration of PrefSure Life and Lumley Life successfully completed in
Australia
* Increase in embedded value per share of 17% to R15,77
* Increase in dividend of 10% to 92 cents per share
* Increase in net profit before taxation of 22%
* Pre AC133 increase in headline earnings per share of 9%
* Increase in new business embedded value to R40 million
* PrefSure Life awarded `Risk Insurer of the Year`
The following are the audited consolidated results of the company and the
subsidiary companies for the year ended 31 March 2004 together with
comparative figures:
SUMMARISED GROUP INCOME STATEMENT
Audited Audited
year ended year ended
31 March 31 March
2004 2003
Notes R`000 R`000
Income 4 233 898 4 534 098
Net premium income on insurance
contracts 1 953 419 1 821 042
Net premium income from reinsurance
arrangements (26 621) 2 739 725
Policy fees on investment contracts 9 976
Investment income (net of
administration fees) 1 030 434 1 205 418
Gains/(losses) on revaluation and
disposal of investments 1 264 086 (1 244 267)
Other income 2 604 12 180
Outgo 3 660 869 4 066 218
Net policyholder benefits 3 076 660 4 760 057
Commission on insurance contracts 169 891 138 963
Administration expenses 311 460 258 096
Amortisation of intangible assets 1 18 012 43 285
Amortisation of goodwill 3 568 -
Minority share of profits 19 727 -
Transfer s to/(from) policyholder
liabilities under insurance contracts 61 551 (1 134 183)
Net profit before taxation 573 029 467 880
Taxation (71 378) 27 593
Net profit after taxation 2 501 651 495 473
Preference dividend (19 957) (23 537)
Attributable earnings to ordinary
shareholders 481 694 471 936
Headline earnings attributable to
ordinary shareholders 3 503 274 515 221
Attributable earnings per share (cents)
Basic 268,9 264,3
Fully diluted 267,9 264,1
Headline earnings per share (cents)
Basic 280,9 288,5
Fully diluted 279,9 288,4
Dividend per ordinary share paid
during the year (cents) 84,0 70,0
Dividend cover (headline earnings,
times) 3,3 4,1
Weighted average number of shares in
issue (`000) 179 145 178 572
Fully diluted number of shares in
issue (`000) 179 774 178 663
Total shares in issue (`000) 176 131 177 186
Notes
1. Intangible assets represent the present value of in force business arising
on the acquisition of Saambou Life and Lumley Life and are written off over
a period representing the emergence of the future profits, in proportion to
these future profits. In the case of Saambou Life the period is three years,
of which one year is still outstanding. In the case of Lumley Life the
period is 10 years from 1 January 2004.
2. Net profit after taxation analysed as follows: R`000 R`000
Operating Income 350 972 420 947
Policy fees on investment contracts 9 976
Shareholders` investment income (life business) 92 192 167 443
Shareholders` gain/(loss) on revaluation and
disposal of life investments 44 042 (96 511)
Other income 4 469 3 594
501 651 495 473
3. The headline earnings are calculated as:
Attributable earnings for the year 481 694 471 936
Add: amortisation of intangible assets 18 012 43 285
amortisation of goodwill 3 568 -
Headline earnings for the year (post AC133) 503 274 515 221
Add: unrealised loss arising from change in fair
value of embedded derivative 70 892 -
Less: deferred tax asset on unrealised loss (10 634) -
Headline earnings for the year (pre AC133) 563 532 515 221
SUMMARISED GROUP BALANCE SHEETS
Audited Audited
as at as at
31 March 31 March
2004 2003
R`000 R`000
Assets
Investment assets 18 196 119 17 618 620
Intangible assets 121 382 23 308
Property, plant and equipment 45 485 38 775
Deferred taxation 164 828 141 959
Current assets 752 118 798 589
Total assets 19 279 932 18 621 251
Equity, reserves and liabilities
Total shareholders` funds 2 103 316 1 662 869
Minority interests 149 617 -
Outside shareholders` interests in respect of
preference shares 200 000 200 000
Net policyholder liabilities 15 643 518 15 405 943
- under insurance contracts 14 048 663
- under investment contracts 1 594 855
Non-current liabilities 104 480 223 660
Deferred tax 68 446 52 558
Current liabilities 1 010 555 1 076 221
Total equity, reserves and liabilities 19 279 932 18 621 251
LIFE INSURANCE OPERATIONS
Audited Audited Audited
year ended year ended year ended
31 March 31 March 31 March
2004 2004 2003
R`000 R`000 R`000
Post AC133 Pre AC133 Pre AC133
Net premium income on insurance
contracts
Individual life 1 621 536 1 670 797 1 553 240
Single premiums 408 540 408 540 183 589
Recurring premiums 1 395 990 1 445 251 1 515 248
Gross individual life premiums 1 804 530 1 853 791 1 698 837
Reinsurance premiums (182 994) (182 994) (145 597)
Group benefits 291 801 293 085 217 420
Lump sums 99 809 101 093 29 209
Other premiums 377 345 377 345 290 768
Funeral - single premiums 14 111 14 111 8 407
Gross group benefits premiums 491 265 492 549 328 384
Reinsurance premiums (199 464) (199 464) (110 964)
Credit life 40 082 40 082 50 382
Single premiums 44 085 44 085 54 388
Reinsurance premiums (4 003) (4 003) (4 006)
Net premium income on insurance
contracts 1 953 419 2 003 964 1 821 042
LIFE INSURANCE OPERATIONS - CONTINUED
Audited Audited Audited
year ended year ended year ended
31 March 31 March 31 March
2004 2004 2003
R`000 R`000 R`000
Note Post AC133 Pre AC133 Pre AC133
Net premium income from
reinsurance arrangements (26 621) (26 621) 2 739 725
IEB annuities and pensions (62) (62) 2 708 569
Saambou Life - - (86 829)
IEB individual life (26 559) (26 559) 117 985
Investment income,
gains/(losses) on
revaluation and disposal
of investments
Insurance contracts 2 294 520 2 519 196 (38 849)
Investment income 1 088 912 1 176 265 1 255 268
Realised net gain on
disposal of investments 653 764 667 380 (220 275)
Unrealised net gain on
revaluation of
investments 826 023 951 349 (663 138)
Foreign exchange
translation loss (215 701) (215 701) (360 854)
Investment administration
fees (58 478) (60 097) (49 850)
Investment contracts
before fair value
adjustment 153 784
Investment income 87 353
Realised net gain on
disposal of investments 13 616
Unrealised net gain on
revaluation of
investments 54 434
Investment administration
fees (1 619)
Total investment income,
gains/(losses) on
revaluation and
disposal of investments
before fair value
adjustment 2 448 304 2 519 196 (38 849)
Fair value adjustment
relating to investment
policyholder
liabilities (153 784)
Total investment income,
gains/(losses) on
revaluation and
disposal of investments 2 294 520 2 519 196 (38 849)
Net policyholder benefits
and claims
Individual life 4 2 925 830 3 201 565 4 450 443
Death and disability
benefits 412 816 414 340 437 403
Maturities 1 355 071 1 403 712 1 988 800
Annuities 591 513 753 222 771 608
Surrenders 723 584 787 445 1 409 882
Gross individual life
claims 3 082 984 3 358 719 4 607 693
Reinsurance claims (157 154) (157 154) (157 250)
Group benefits 133 757 144 212 171 099
Death and disability
benefits 220 002 220 002 260 957
Maturities 2 877 3 259 3 059
Member withdrawals 6 316 7 929 9 840
Scheme terminations and
investment withdrawals 3 072 11 532 18 856
Group funeral - death and
disability benefits 7 936 7 936 6 185
Gross group benefits
claims 240 203 250 658 298 897
Reinsurance claims (106 446) (106 446) (127 798)
Credit life 17 073 17 073 138 515
Death and disability
benefits 19 003 19 003 141 295
Reinsurance claims (1 930) (1 930) (2 780)
3 076 660 3 362 850 4 760 057
Note
4. Policyholder benefits are stated gross of policy loans. In order to arrive
at an estimate of net cash outflow in respect of benefits paid, R602,5
million in respect of policy loans must be deducted from the individual life
claims of R 2 925,8 million.
SUMMARISED STATEMENT OF CHANGES IN EQUITY
Audited Audited
year ended year ended
31 March 2004 31 March 2003
R`000 R`000
Share capital and premium 1 001 030 1 018 347
Balance at beginning of year 1 018 347 965 283
Arising from share issue 28 572 124 298
Share issue expenses written off (6 530) (311)
Holding company shares acquired by group
companies (39 359) (70 923)
Non-distributable reserve 1 775 600
Balance at beginning of year 600 600
Revaluation of owner-occupied proper ties 1 175 -
Foreign currency translation reserve (16 675) -
Balance at beginning of year - -
Foreign currency translation reserve
arising on
translation of foreign subsidiaries (16 675) -
Retained earnings 1 117 186 643 922
Restated balance/balance at beginning of
year 785 316 301 158
Balance at beginning of year as
previously reported 643 922
Adjustment for change in accounting policy
Accounting for fair value of embedded
derivative in terms of AC133 142 302
Deferred tax thereon (908)
Net income for the year 501 651 495 473
Share of pre-acquisition profits of
subsidiary previously held as investment - (6 695)
Dividends declared (169 781) (146 014)
2 103 316 1 662 869
SUMMARISED GROUP CASH FLOW STATEMENT
Audited Audited
year ended year ended
31 March 31 March
2004 2003
R`000 R`000
Cash flow from operating activities (1 217 706) 73 769
Cash flow from investing activities 1 211 249 (2 599 955)
Cash flow from financing activities 11 065 (35 721)
Net movement in cash and cash equivalents 4 608 (2 561 907)
Cash and cash equivalents at beginning of year 1 764 086 4 325 993
Translation effect of foreign currencies (34 609) -
Cash and cash equivalents at end of year 1 734 085 1 764 086
SUMMARISED SEGMENT INFORMATION
South African Australian
insurance and insurance and
other operations other operations* Total
for the year ended
31 March 2004 R`000 R`000 R`000
The segment
information is as
follows:
Income statement
extracts
Net premium income 1 787 851 138 947 1 926 798
Investment income,
net gains on
revaluation and
disposal
of investments 2 212 089 82 431 2 294 520
Other income (9 395) 21 975 12 580
Net policyholder
benefits (3 051 394) (25 266) (3 076 660)
Commissions (115 589) (54 302) (169 891)
Administration
expenses (226 844) (84 616) (311 460)
Amortisation of
intangible assets (16 648) (4 932) (21 580)
Minority share of
profits - (19 727) (19 727)
Transfer (to)/from
policyholder
liabilities under
insurance contracts (77 874) 16 323 (61 551)
Net profit before
taxation 502 196 70 833 573 029
Taxation (40 381) (30 997) (71 378)
Net profit after
taxation 461 815 39 836 501 651
Preference dividend (19 957) - (19 957)
Attributable
earnings to ordinary
shareholders 441 858 39 836 481 694
Adjustment for
amortisation of
intangible assets 16 648 4 932 21 580
Headline earnings
post AC133 458 506 44 768 503 274
Headline earnings
pre AC133 518 764 44 768 563 532
Balance sheet
extracts
Total carrying
amount of segment
assets
excluding capital
additions and
deferred tax assets 18 101 536 879 895 18 981 431
Capital additions 28 171 105 502 133 673
Deferred tax assets 126 618 38 210 164 828
Total carrying
amount of segment
assets 18 256 325 1 023 607 19 279 932
Segment liabilities
excluding deferred
tax liabilities 16 526 054 582 116 17 108 170
Deferred tax
liabilities 30 360 38 086 68 446
Total segment
liabilities 16 556 414 620 202 17 176 616
*Prefsure Holdings and Prefsure Life for 9 months, Lumley Life for 3 months.
GROUP EMBEDDED VALUE
31 March 31 March
2004 2003
as at R`000 R`000
Shareholders` net assets
- total 2 103 316 1 662 869
- plus: adjustment to group assets - 99 612
- less: Saambou Life intangible asset (6 659) (23 308)
Net value of in force life business 681 183 641 007
Gross value of in force life business 820 920 841 637
Less: opportunity cost of capital adequacy
requirements (139 737) (200 630)
Embedded value 2 777 840 2 380 180
Capital adequacy requirement (`C AR`) 931 412 903 153
Capital adequacy cover (times) 2,5 2,0
Net asset value per share after adjustments shown
above (Rand) 11,90 9,81
Embedded value of in force business per share (Rand) 3,87 3,62
Embedded value per share (Rand) 15,77 13,43
ANALYSIS OF GROWTH IN EMBEDDED VALUE
31 March 31 March
2004 2003
for the year ended R`000 R`000
Embedded value at end of year 2 777 840 2 380 180
Embedded value at start of year 2 380 180 2 094 495
Growth in embedded value 397 660 285 685
Less: Changes in share capital and
non-distributable reserves (16 142) (46 370)
Saambou Life opening embedded value - (124 310)
Adjustment for AC133 (41 782) -
Plus: Dividends declared or paid 169 781 146 014
Embedded value earnings 509 517 261 019
Analysed as:
Roll forward 252 892 136 956
Investment return on group insurance assets 136 234 31 371
Expected return on in force business 116 658 105 585
Value of new business 40 405 38 557
Expected return on new business 2 412 2 412
Change in economic assumptions (9 185) 9 065
Change in non-economic assumptions and basis 127 772 31 497
Investment experience variations 24 579 (320 696)
Other experience variations 70 642 363 228
Embedded value earnings 509 517 261 019
VALUE OF NEW BUSINESS
31 March 31 March
2004 2003
as at R`000 R`000
Net value of new life insurance business 40 405 38 557
Gross value of new life insurance business 42 578 43 136
Less: opportunity cost of capital adequacy
requirements (2 173) (4 579)
COMPOSITION OF SHAREHOLDERS` NET ASSET VALUE
31 March 31 March
2004 2003
as at R`000 R`000
Equity 731 472 611 929
Cash 377 473 232 850
Interest bearing 983 025 782 891
Property 44 567 60 273
Other (33 221) (25 074)
2 103 316 1 662 869
VALUATION BASIS: ECONOMIC ASSUMPTIONS
31 March 31 March
for the year ended 2004 2003
Risk discount rate 12,5% 12,9%
Equity return (before capital gains tax) 12,0% 12,4%
Property return (before tax) 11,0% 11,4%
Fixed interest return (before tax) 10,0% 10,4%
Cash return (before tax) 8,0% 8,4%
Average investment return (before tax) 10,9% 11,1%
Expense inflation rate per annum 6,0% 6,4%
NEW BUSINESS ANNUAL PREMIUM INCOME BY SOURCE
31 March 31 March
2004 2003
for the year ended R`000 R`000
Individual life recurring premiums 93 038 114 982
C AL Commercial 25 399 17 921
Broker 1 135 9 459
Distribution par tner s - continuing 66 504 80 048
Distribution partner s - discontinued - 7 554
Group benefits recurring premiums 75 943 66 948
Group risk 71 832 54 668
Funeral 4 053 5 348
Credit life 58 6 932
Total new recurring premiums 168 981 181 930
Single premiums 413 664 195 118
Individual life 343 213 131 352
Annuities 59 514 52 038
Credit life 6 231 11 728
Pensions investment 4 706 -
SUMMARISED GROUP COMMENTARY
1. ACCOUNTING POLICIES AND METHODS
The accounting policies adopted by the group comply in all material respects
with South African Statements of Generally Accepted Accounting Practice as well
as the South African Companies Act of 1973. These accounting policies are
consistent with those applied at 31 March 2003, except for the adoption of the
accounting statement on recognition and measurement of financial instruments
(AC133), which became effective for financial years commencing on or after
1 July 2002.
In accordance with AC133, in respect of financial assets, policyholder and
shareholder assets have been designated as held at fair value and are thus
re-measured to fair value and all realised and unrealised profits and losses
are recognised in the income statement.
In accordance with AC133 and the guidance on the application of AC133 to
liabilities arising from long-term insurance contracts as issued by the
Accounting Practices Committee of SAIC A, the actuarial value of policyholder
liabilities have been categorised between insurance contracts and investment
contracts. Insurance contracts continue to be valued in terms of the financial
soundness valuation basis while investment contracts are valued at fair value
as described in AC133 and the guidance. The liabilities under insurance and
investment contracts are disclosed separately on the balance sheet.
Liabilities under investment contracts have been reflected in the balance sheet
at fair value with changes in fair value being accounted for in the income
statement. The premium income, investment income, policyholder benefit
payments, commissions, administration expenses and taxation relating to
investment contracts have been excluded from the income statement and are
accounted for directly in the balance sheet under the build up of liabilities
in respect of these contracts.
The statement requires that this change in accounting policy be applied
prospectively and any adjustments necessary are made to the opening balance of
retained income.
As the majority of the financial assets and liabilities of the group have
always been valued at fair value, the impact of the implementation of AC133 was
limited to the distinction between insurance and investment contracts and the
inclusion of a financial instrument, which was accounted for as an embedded
derivative. The effect of accounting for the embedded derivative with a fair
value of R142 million at 1 April 2003 has in terms of AC133 been adjusted
against opening retained income. The income statement effect arising due to the
implementation of AC133 for the year ended 31 March 2004 is an unrealised loss
of R70,9 million, being the fair value adjustment arising due to Rand strength.
The group previously reflected the value of this instrument as an adjustment
to the embedded value.
The financial information has been audited by PricewaterhouseCoopers Inc.
whose unqualified audited opinion is available for inspection at the group`s
registered address.
2. REVIEW OF OPERATING RESULTS FOR THE YEAR
The results for the year include the consolidated results of the group`s
Australian subsidiary, PrefSure Holdings Limited (`PrefSure Holdings`)
(previously Capital Alliance Holdings Australia Proprietary Limited) from
1 July 2003, for the first time. The group took control of PrefSure Holdings
during this period, increasing it`s effective interest from 39% to 68%. The
PrefSure Holdings results include the performance of PrefSure Life Limited
(`PrefSure Life`) for the nine months from 1 July 2003 and Lumley Life Limited
(`Lumley Life`) for the three month period following the date of effective
control of 1 January 2004. Further detailed commentary on the Australian
operations is provided below.
The headline earnings pre AC133 of R563,5 million were up by 9,4% on the
previous year and post AC133 declined by 2,3% to R503,3 million. The previous
year was an exceptional result influenced by the successful integration of the
Fedlife / Norwich business and the raising of deferred tax assets, in terms of
accounting practice, for the first time. Accordingly the director s believe
that this result is most satisfactory, particularly the growth of 17,4% in
embedded value per share, excluding the dividend paid of 84 cents per share.
2.1 South African life insurance businesses
The following were considered noteworthy in respect of the South African life
insurance businesses.
*Client retention activities have focused on quality of ser vice delivered and
level of investment returns. The level of outflows, particularly in respect
of maturities and surrender s, has reduced substantially over the prior year.
In the case of maturities, this can be attributed to the success of the
maturity extension initiative, whereby clients are offered attractive low cost
investment alternatives to re-invest their maturity proceeds. Approximately 25%
of Fedlife and Norwich maturities by value, equating to an amount of R343
million, were extended. The number of terminations, particularly due to
lapses and surrender s, has declined, leading to a revision of the actuarial
lapse assumptions. Although the reduction in lapse assumptions led to a R25
million valuation loss due to a requirement to hold certain expense reserves
on policies for longer, this was more than compensated by a R50 million
increase in the value of in force, representing higher future profits to be
earned as a result of the better experience.
*Equity investment performance was excellent and ahead of benchmark in the
period, coming off the equity market lows of April 2003.
*The absolute return portfolio had an excellent year, substantially
outperforming the benchmark of CPI plus 8%.
*Bond performance was muted in comparison to the prior year and in line with
the All Bond Index benchmark. Cash portfolios outperformed their benchmark
and the annuity portfolio made a small investment profit.
*New business results showed a 5% increase in the embedded value of new
business written over the prior year. This was primarily as a result of :
- C AL Commercial, which had an excellent year, showing a 51% increase in the
number of contracts sold over the prior year ;
- Group Risk business, which in another strong performance, achieved a 31%
increase in new risk premiums, a 92% retention rate of existing premiums and an
average annual new business growth rate of 26% per annum over the last five
years, leading to an approximate 8% group risk market share;
- Maturity extensions, as detailed above; and
- Distribution Partner business.
Although the Distribution Partner business added to embedded value of new
business, overall volumes fell short of target.
The broker division, which focused on the lower income market segment, has
been closed to new business based on management`s view that it is not a viable
channel for the company given the quality of production from this source and
the complications arising from the Financial Advisor y and Intermediary Ser
vices (`FAIS`) Act, 2002. The company has enjoyed a strong level of support
from it`s relationship with independent financial adviser s in the middle and
upper income market as evidenced by the high level of maturity extensions.
*Further expense savings were achieved, resulting in a small reduction in unit
costs. In line with previous guidance given, management are of the view that
further unit cost reductions on the Fedsure and Norwich books will be
difficult to achieve and will thus focus on managing the rate of future
increases of these costs via tight expense management.
*The taxation charge increased substantially, per guidance given last year,
when the deferred taxation assets were raised. The effect of the change in the
taxation charge is clearly demonstrated when comparing net profit before
taxation
of R573 million to the previous year`s figure of R467,9 million, a 22.5%
increase,
with the net profit after taxation figures of R501,7 million and R495,5 million
respectively.
*Other experience items were largely within expectation.
2.2 Australian life insurance businesses
*The group took control of PrefSure Holdings during the period, via a rights
issue under taken by PrefSure Holdings, where the other shareholders diluted
their interest in favour of the group in order for the group to play an
increased role in the operational activities of the Australian insurance
interests.
*PrefSure Holdings under took the rights issue in order to raise sufficient
funds to acquire Lumley Life.
*Post the Lumley Life transaction effective date of 1 January 2004, the group
moved quickly to integrate PrefSure Life and Lumley Life under the PrefSure
Life brand name. The integration was assisted by the secondment of senior staff
to Australia, in order to ensure that the group`s integration expertise was
used to full advantage.
*By end January all staff were integrated into the same premises, management
structures were finalised, restructuring was completed and the integration of
systems commenced.
*The integration of six system platforms onto the group`s new single
international operating platform has proceeded well. It is anticipated that the
new platform will go live at the end of June 2004.
*Good progress has been made in terms of expense reductions and the group is
confident of achieving the reduced cost per policy target by 31 March 2005.
*The Board is pleased to note that attributable earnings of R39,8 million have
been recorded for the group`s interest in PrefSure Holdings, since 1 July 2003.
*PrefSure Life won the `Risk Company of the Year` award, based on the input of
independent financial adviser s, in May 2004.
Lumley Life won this award in 2003, proof of which was the increase in Lumley
Life`s new business volumes by 80% over the year. PrefSure Life now enjoys
approximately 10% market share in the group risk market, and 4% overall risk
market share.
*All major clients were retained through the Lumley Life change of control and
name and the business has now been repositioned in order to achieve enhanced
future new business growth off the consolidated platform.
3. EMPOWERMENT
The group was recognised as the second most empowered financial ser vices group
and sixth most empowered group by the Financial Mail / Empowerdex `Top
Empowerment Companies 2004` survey. During the year the group has continued to
focus on it`s five pillar s of empowerment and the further implementation of
it`s empowerment strategy. Accordingly the group currently complies with most
of the Financial Sector Charter requirements ahead of deadlines.
4. DIVIDENDS
The director s have resolved to declare a cash dividend of 92 cents per share
for the financial year ended 31 March 2004. This compares to the dividend of 84
cents per share paid during the previous financial year.
Last day to trade `cum` the dividend Friday 16 July 2004
Shares commence trading `ex` the dividend from
commencement of business on Monday 19 July 2004
Record date Friday 23 July 2004
Payment date Monday 26 July 2004
Share certificates may not be dematerialised or rematerialised between Monday,
19 July 2004 and Friday, 23 July 2004, both days inclusive.
5. PROSPECTS
The group has achieved outstanding financial results over the past three years
and will continue to focus on achieving real growth in operating earnings and
dividends. The embedded value of PrefSure Life will be enhanced as a
consequence of the successful integration of Lumley Life and this enhancement
will be recognised as the cost reductions are achieved. The group believes that
the successful integration of PrefSure Life and Lumley Life proves that the
business model can be implemented in markets outside South Africa. Accordingly
the group will continue to look for integration opportunities in South Africa,
Australia and the United Kingdom in order to leverage it`s integration and
administration expertise to fullest advantage. Although the timing of further
integration opportunities is difficult to predict, the group is confident that
by focusing on the three identified markets the probability of concluding
appropriate transactions is greater than if it focused only on the South
African market. These transactions will only be concluded if they meet the
shareholder return criteria within an acceptable level of risk and not at any
cost. Furthermore, the group will continue to engage with potential local and
offshore third party administration clients. The increased international
activities mean that the performance of the Rand will have a greater impact on
the financial results in future.
Organic growth strategies in Group Risk, C AL Commercial and PrefSure Life will
continue to provide new business at an acceptable level of risk and cost,
leading to an enhanced contribution to profits and embedded value. Given
reasonable investment markets and a stable currency the board has confidence
that growth in earnings can be achieved.
For and on behalf of the board of director s of Capital Alliance Holdings
Limited
L M Nestadt (Chairman)
I M Kirk (Chief Executive Officer)
18 June 2004
Johannesburg
Directors: L M Nestadt (Chairman)
M P Malungani (Deputy Chairman)
I M Kirk (Chief Executive Officer)
B Gildenhuys
H R Levin
T A Mokhobo
Company Secretary: W T Green
Registered office: 162 Anderson Street
Johannesburg 2001
PO Box 261813 Excom 2023
Transfer secretaries: Computershare Investor Services 2004 (Pty) Ltd
70 Marshall Street Johannesburg 2001
PO Box 1053 Johannesburg 2000
Registration number : 1952/000756/06
Share Code: CPT
ISIN: ZAE 000011904
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www.capitalalliance.co.za
Date: 21/06/2004 10:00:28 AM Produced by the JSE SENS Department
