| Wed 11 Aug 2004, 8:33 | | SAGE GROUP LIMITED - TRADING UPDATE |
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SAGE GROUP LIMITED - TRADING UPDATE
Sage Group Limited
(Incorporated in the Republic of South Africa)
Registration number : 1970/010541/06
JSE share code: SGG
ISIN: ZAE 000006623
(`Sage Group` or ` the Group `)
TRADING UPDATE
Operating Results
Despite a tough operating environment, as evidenced by
peer results announced during the 6 months to 30 June
2004, the Group`s new business results have been positive
over the review period. Substantial operating progress
has also been achieved and the long term capital
structure planning for the Group is continuing.
- Individual Life New Business: Individual Life recurring
premium new business was 5,9% up on the equivalent period
last year, while single premiums were 27,3% up. Overall,
Individual new business Annual Premium Equivalent (APE-
new recurring premiums plus 10% of single premiums) were
up by 7,9% compared to the first 6 months last year. On
the same basis new business for the 3 months to end June
was significantly up, by 26,5%, compared to the 3 months
to March.
- Employee Benefits (EB) New Business: Recurring premium
new business was disappointing and down 32,6% on 2003,
while single premium new business declined by 4,7%.
Overall, EB new business was down by 31,6% on an APE
basis. EB comprises less than 20% of total new business
and is `lumpy` business flows are uneven.
- Unit Trust New Business: Gross 3rd party sales were
R190million for the six months to June, compared to
R93million for the period to end June last year.
Redemptions were significantly lower (R163million vs
R215million), resulting in a positive net flow of some
R27million, against an outflow of R122million for the
same period last year.
Expenses of management have been well controlled, and
there has been a continued improvement in the trend of
policy discontinuances through lapsing and surrenders.
Investment performance continues to be satisfactory for
the various investment portfolios.
Group Financing Costs
Group financing costs relate mainly to the Equity Linked
Notes, redeemable in July 2005 at a value linked to the
dollar price of ABSA Group Limited shares, and have
increased significantly due to the combined effect of the
strengthening of the Rand to R6,22/USD (December 2003:
R6,62/USD) and the increase in the ABSA share price to
R51,00 (December 2003 : R42,14).
Group Earnings
Initial estimates indicate that the Group`s interim
earnings and headline earnings for the six months to 30
June 2004 will be substantially (equal to or greater than
30%) lower than those reported for the six months ended
30 June 2003 and for the year ended 31 December 2003.
This is due to the sound operating results for the review
period being more than offset predominantly by the
foreign exchange effects of the strong Rand on the Group
financing costs, including the AC133 fair value
adjustments on the Equity Linked Notes.
Actuarial valuation and audit review
The interim actuarial valuation of Sage Life has not been
completed and finalisation of this valuation could impact
on the early indications of the financial results. In
addition, the interim results for the six months ended 30
June 2004, have not been reviewed and reported on by the
Group`s auditors or the consulting actuaries.
10 August 2004
Sponsor
Grant Thornton Corporate Finance (Proprietary) Limited
For further information, please contact:
Sage Group Limited 011 377 5555
Garth Griffin, Chief Executive 011 377 5364
Leon Kaplan, Group Financial Director 011 377 5562
Nombini Mehlomakulu, Investor Relations 011 377 5821
College Hill South Africa 011 447 3030
Nicholas Williams 083 607 0761
Angela Parr 083 578 3885
Date: 11/08/2004 07:00:17 AM Produced by the JSE SENS Department
