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RMBH - AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2004
RMB HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1987/005115/06
Share code: RMH
ISIN: ZAE000024501
(`RMBH`)
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2004
Consistently growing value
`We take considerable pride in two milestones in these
results - not only have headline earnings grown to
R2 billion, but the RMBH group`s underlying intrinsic value
now exceeds R20 billion`
GT Ferreira - Chairman
THE RMBH GROUP AT A GLANCE
RMBH is the holding company of some of South Africa`s
leading financial services companies. Its interests include:
* FirstRand Limited (the `FirstRand group`) (effective
interest: 34,2%*)
The FirstRand group is a uniquely structured financial
services group with critical mass in both banking and
insurance. For regulatory oversight purposes, its operations
are housed in three subsidiary groups under FirstRand Bank
Holdings Limited, Momentum Group Limited and Discovery
Holdings Limited.
In order to provide customers with a comprehensive range of
products and services the group`s business units are
clustered according to specific target market segments.
These are:
* The Retail Businesses - targeting individual customers
(principally under the FNB/First National Bank, WesBank and
FirstLink brand names);
* The Corporate Businesses - directed at large corporate and
commercial enterprises (under the FNB Corporate, Rand
Merchant Bank, RMB Asset Management, Futuregrowth and Lekana
Employee Benefits brand names);
* The Wealth Businesses - targeting individuals in the
middle and upper income markets (principally under the
Momentum Life, Momentum Wealth, Pulz and RMB Unit Trust
brand names); and
* The Health Business - serving the health insurance market
(via the Discovery group).
* RMB Structured Insurance Limited (`RMBSI`) (effective
interest: 100%)
RMBSI holds both short-term and life assurance licences. It
creates individual insurance and financial risk solutions to
South Africa`s top companies by using sophisticated risk
techniques and innovative financial structures.
* OUTsurance Holdings Limited (`OUTsurance`) (effective
interest: 65,6%*)
OUTsurance is a direct personal lines and small business
short-term insurer. Pioneers of the OUTbonus concept, it has
grown rapidly by applying a scientific approach to risk
selection, product design and claims management.
* Glenrand M.I.B Limited (`Glenrand M.I.B`) (effective
interest: 17,1%*)
Glenrand M.I.B is a leading financial services group
focused on providing risk advisory services and solutions,
employee benefits and investment advisory services.
* The effective interest held by RMBH in these businesses
has been influenced by the application of new financial
reporting requirements relating to the consolidation of
share incentive schemes. See the further commentary in this
regard elsewhere in this announcement.
OVERVIEW OF RESULTS
The Group`s results for the year ended 30 June 2004 were
achieved against a background of:
* A stronger than anticipated international economy;
* A sound domestic economy (with an annualised growth rate
of in excess of 3%);
* A stronger Rand (strengthening by 18,3% to a level of
R6,18:US$1 at the financial year-end); and
* Lower inflation (CPIX inflation declined from 6,4% to 5,0%
over the year under review);
which factors combined to result in
* A significant reduction and subsequent stability in
interest rates (the prime overdraft rate had declined by 4%
to 11,5% during July to December 2003).
In combination, these factors created a positive environment
in most of the areas in which the RMBH group operates, and
substantially all of our businesses were well positioned to
derive benefit therefrom.
This is reflected in the excellent outcome at the RMBH
level, with:
- Headline earnings growing at +18% to R2,1 billion
resulting in
- Headline earnings per share +18% to 180,1 cents
also growing by
Our exit from Global Resorts, active in the gaming sector,
was completed during May 2004. This transaction contributed
to a 41% growth in attributable earnings. As a result of the
disposal, RMBH now holds net cash resources at the centre of
some R478 million.
The intrinsic value of our underlying investment portfolio
benefited from strong organic growth and exceptional growth
in the value of financial counters on the JSE. As a result,
the intrinsic value of RMBH grew by 34% to some R20,1
billion.
FirstRand, OUTsurance and RMB Structured Insurance have all
completed in-depth reviews of their future capital
requirements. These processes have all had positive outcomes
and:
- FirstRand has concluded that it can in future operate
with lower earnings retentions, while
- OUTsurance and RMB Structured Insurance have indicated
that they will be able to embark on a programme of strong
annual dividend payments.
This, together with the strong underlying operational trend
reflected by the Group`s headline earnings and its cash
resources, has enabled RMBH to declare a final dividend of
52,0 cents per share, representing a 40% increase over the
previous year. Together with the interim dividend of 25,5
cents per share, this brings the total dividend for the year
to 77,5 cents per share (2003: 55 cents), representing a
year-on-year increase of 41% and a dividend cover ratio (on
headline earnings) of 2,3 times (2003: 2,8 times).
We believe these to be an excellent set of results that
reflects both the benefits of a diverse and resilient
earnings base and the benefits of sustained focus on our
core businesses. The various businesses in the group have
reached a stage in their development where they will, on a
sustained basis, be able to generate superior dividend
returns to shareholders.
SOURCES OF INCOME
RMBH has a well-diversified earnings base, drawn from the
full spectrum of South African financial services:
Source of income Graph
Retail banking 26%
Corporate banking 12%
Investment banking 16%
Instalment sales 12%
African banking activities 5%
Life assurance, health insurance and asset management 16%
Short-term insurance 11%
Other 2%
REVIEW OF OPERATIONS
FIRSTRAND GROUP
Summary of FirstRand financial results
2004 2003 %
Year ended 30 June Rm Rm change
Headline earnings comprises:
- FirstRand Banking group 4 760 3 829 24
- Momentum group 1 081 947 14
- Discovery group 265 178 49
- FirstRand Limited (including (274) (39) >100
preference share funding)
- Consolidation of share trusts (105) (68) 54
Total headline earnings 5 727 4 847 18
Attributable to RMBH* 1 933 1 636 18
* After consolidation eliminations
Operating environment and financial results
The results achieved by the FirstRand group reflect how well
positioned each of its businesses is to take advantage of
the current economic environment.
- FirstRand Banking group experienced exceptional organic
growth aided by a buoyant retail sector and outstanding
performances by the investment and corporate banking
operations.
- Momentum group benefited from good new business growth
in risk, linked investment products and unit trust
businesses, while improved investment markets aided growth
in the asset management businesses.
- Discovery group delivered an excellent performance
across all its businesses with both the Life and Health
divisions benefiting from strong new business growth and
improved efficiencies. The US Illinois operations have
turned profitable and the other new international joint
ventures are on track.
The group`s collaboration activities produced good growth
across a number of the business units.
FirstRand Banking group
The Banking group produced excellent results for the year,
benefiting from exceptional performances from RMB, FNB
Retail, WesBank and FNB Corporate with headline earnings
increasing by 24,3%.
Key features of the Banking group`s performance were strong
growth in gross non-interest revenue (+25,9%), a 33,2%
growth in trading income and a doubling of investment
income.
Interest margins experienced an overall decline from 5,02%
to 4,47% mainly due to the anticipated (but partly hedged)
endowment effect on capital and deposits and some
competitive pressure on some of the asset generators in the
Banking group.
The sustained lower interest rate environment resulted in
improved credit quality with non-performing loans and bad
debts at historic lows.
Advances grew by a satisfactory 11,0%, assisted by
exceptional new business growth in the mortgage and
instalment finance business units.
Growth in operating expenses was contained at 10,1%. The
cost-to-income ratio improved marginally to 56,9%.
The Banking group achieved a return of 24,2% on average book
capital. The consolidated capital adequacy position of the
regulated banking entities improved during the year, with
the total capital adequacy ratio increasing by 1,6% from
12,1% (2003) to 13,7%.
Momentum group
Momentum`s results benefited from good new business growth
in the linked investment product and unit trust businesses
and group headline earnings increased by 14% to R1 081
million.
The embedded value of Momentum increased by 10% from R8 784
million at 30 June 2003 (restated to take account of the
transfer of Discovery to FirstRand), to R9 666 million at 30
June 2004. The embedded value profit for the year to 30 June
2004 totalled R1 455 million which represents a return of
16,6%.
Insurance operations
New annualised individual life recurring premium business
increased by a pleasing 6% compared to the prior year. The
main contributor to this growth was a 51% increase in
recurring risk product sales. The strong increase in linked
product sales, both locally and internationally, resulted in
lump sum inflows increasing by 18% to R1,7 billion.
Sales in Momentum`s new health offering, Pulz, have been
encouraging, with the initial target of
6 000 principal members achieved. This makes Pulz the
fastest growing open medical scheme within its first year of
operation. The process of amalgamating Pulz with the
National Medical Plan, an open scheme with 145 000 members,
is on track, and will provide Pulz with the critical mass
required to compete with larger open schemes.
Asset management operations
The asset management operations delivered a strong
performance during the year generating a 40% increase in
operating profit after tax to R175 million. This was driven
by the improved local equity market returns, especially
during the first half of the financial year, and
satisfactory inflows of new business particularly in retail
products.
Discovery group
Discovery produced an excellent performance reflecting a
combination of strong organic growth and increased
efficiencies across all its businesses. This performance
translated into a 102% increase in operating profits and
despite a 29% increase in weighted number of shares in
issue, headline earnings (before abnormal items) per share
rose by 18%.
Discovery is evolving into four key businesses:
- Discovery Life exceeded expectations, further
consolidating its leadership position within the pure risk
assurance market and increasing operating profits by 138%.
- Discovery Health produced a strong performance which
led to the lowest contribution increase for DHMS members
announced for 2005, and an increase in operating profits of
40%.
- In the US, Destiny Health made solid progress with a
37% decrease in operating losses. The core Illinois
operations turned profitable during the second half of the
year.
- In the UK, Discovery entered into a joint venture with
Prudential plc and a new company PruHealth will be launched
in the next few months.
The embedded value of Discovery increased by 19%, after
taking into account the issue of new shares, from R5 775
million to R6 876 million at 30 June 2004.
FirstRand`s capital position
FirstRand, like the rest of the entities in the RMBH group,
actively manages its capital base in order to support the
creation of shareholder value.
In order to further optimise the level and structure of the
group`s capital base it has been decided that FirstRand will
issue R2,5 billion non-redeemable, non-cumulative preference
shares. This will result in a reduction of the weighted
average cost of capital. It is anticipated that these
instruments will be listed on the JSE by the end of October
2004.
As a result of the above issue and the release of capital
following the sale of Ansbacher UK, the FirstRand group will
have excess capital. Consequently, the FirstRand board is
exploring the following possible courses of action to deal
with the excess capital:
- Reduce the existing gearing in FirstRand;
- Growth opportunities; and
- Commence a share buy-in programme.
This programme will have a positive effect on RMBH, in that
its return on investment will be enhanced and that it will
receive an enhanced dividend flow from FirstRand.
DIRECTLY HELD INSURANCE INTERESTS
RMB Structured Insurance
RMBSI reported a 5% decrease in headline earnings, which
amounted to R41,0 million. (2003: R43,0 million).
The decline can, to a large extent, be ascribed to the prior
year comparative being skewed by the inclusion in that year
of the positive result of principal positions that the group
assumed in the unwinding of a series of structured
transactions. This masks the fact that in the current year,
the group`s core activities delivered a satisfactory
performance benefiting from strong growth in premium income
in its consumer protection business (on the back of strong
retail sector activity) and the sale of a number of new
structured products to new clients.
RMBSI has proposed a dividend for the year of R20 million
(2003: nil). Based on its capital adequacy and business plan
review, it anticipates that it will be able to finance
future growth and maintain a dividend payout ratio at this
level.
OUTsurance
OUTsurance continues to grow and performed extremely well.
It can be proud to have become an established and trusted
brand in a relatively short space of time.
OUTsurance posted exceptional results for the year, with:
- Net premium income equalling R1,4 billion, a 51%
increase;
- Underwriting profits rising by 94% to R327 million
(largely as a result of a lower expense ratio, which
declined from 20% to 18%); and
- Headline earnings increasing by 106% to R205 million
(2003: R100 million).
Unusually clement weather conditions, a reduction in
replacement cost of electronic goods due to the strong Rand
and significantly lower crime related claims all contributed
to this outcome. OUTsurance has seen improvements in vehicle
hijacking, vehicle theft and house burglary statistics.
Collaboration with the FirstRand group during the past
financial year has been particularly successful, with 35% of
OUTsurance`s premium income being sourced through FirstRand.
A new initiative `Business OUTsurance` provides cover to
small and medium sized businesses. During the financial year
this new venture gained significant traction, providing 10%
of total new business written during the last quarter.
At the year-end the group had total assets of R1,5 billion
with a solvency margin of 42% (compared to the regulatory
requirement of 25%). OUTsurance will declare a maiden
dividend of R150 million which will reduce the solvency
margin to the company`s long-term target of between 30% and
35%. It anticipates that it will be able to continue to make
annual dividend payments to shareholders.
RMBH`s attributable share of OUTsurance`s headline earnings
for the year amounted to R136,0 million (2003: R67,0
million).
OTHER FINANCIAL SERVICES INTERESTS
Glenrand M.I.B
Glenrand M.I.B reported 12% growth in trading profit from
its continuing operations but headline earnings were
marginally down at R76,8 million (2003: R79,1 million).
Good revenue growth in the group`s Africa Risk Advisory
Services business (up 14% to R138 million) was dissipated by
the Benefit Consulting Business which suffered a trading
loss of R9,0 million. This loss includes a significant
amount of once-off restructuring costs. The group as a whole
has re-focused and is expected to achieve real growth in
headline earnings in 2005.
RMBH`s share of headline earnings from Glenrand M.I.B
amounted to R13,0 million (2003: R13,6 million).
DISPOSAL OF GLOBAL RESORTS
RMBH was the lead investor in Global Resorts (SA) (Pty)
Limited (`GRSA`) since its creation some ten years ago. In
this period GRSA designed, developed and successfully
brought into operation three multi-faceted casino, hotel and
entertainment facilities and became a leading participant in
the gaming industry in southern Africa.
GRSA was about to enter a renewed growth and expansion
phase, requiring a different investment profile and
consequently, RMBH believed that its role as the provider of
the initial risk capital had come to an end and that it was
appropriate to realise its investment.
RMBH announced in February 2004 that it had reached
agreement to dispose of its 48,4% interest in GRSA to a
consortium of investors. It received the R530 million sale
consideration arising from the disposal of its interest
during May 2004, and has recorded a profit on the disposal
of its interest of R161 million (being the difference
between the sale consideration and the equity accounted
carrying value of RMBH`s interest in GRSA). While this
amount has been included in attributable earnings for the
year, it has been excluded from the computation of headline
earnings.
GROUP CAPITAL POSITION
At present all of the RMBH group`s investments are
adequately capitalised. Specifically, as recorded above:
- FirstRand anticipates that it will have excess capital
and that it will be able to operate at a lower dividend
cover ratio in future; while
- Both OUTsurance and RMB Structured Insurance generate
surplus capital and will be able to make dividend payments
on an annual basis in future.
RMBH itself has no material funding obligations and as a
result of the disposal of Global Resorts, had net cash
resources at year-end of some R478 million.
The intrinsic value of RMBH`s underlying investments has
shown a significant increase in value over the last year and
may be summarised as follows:
2004 2003 %
As at 30 June Rm Rm change
Market value of listed
interests
(FirstRand, Glenrand M.I.B) 18 353 13 738 34
Value of unlisted interests
OUTsurance, RMBSI) 1 233 802 54
Net cash resources (includes 478 409 17
GRSA in 2003)
Total intrinsic value 20 064 14 949 34
Per RMBH share (cents) 1 689 1 259 34
At 30 June 2004 RMBH`s market capitalisation amounted to R19
183 million (2003: R12 650 million), representing a 4%
discount (2003: 15%) to the Group`s underlying intrinsic
value.
RMBH and the companies in which it is invested, constantly
evaluates the appropriate capital levels of the Group and
the most appropriate manner in deploying such resource.
Given that:
- RMBH itself is in a cash surplus position and that the
quality of its investment portfolio is inherently
sustainable, it should be able to cost effectively finance
any requirement for investment capital without recourse to
shareholders; and
- Its main operating units are adequately capitalised,
and foresee that they will be producing capital surplus to
their requirements, the Group believes that it should,
moving forward, be able to distribute a greater element of
its earnings.
Dividend payment
Accordingly, the board has resolved to declare a final
dividend of 52,0 cents per share (2003: 37,2 cents). Such
final dividend, together with the interim dividend of 25,5
cents, brings the total dividends for the year ended 30 June
2004 to 77,5 cents (2003: 55,0 cents). This represents:
- A year-on-year increase of 41%; and
- A dividend cover ratio (on headline earnings) of 2,3
times (2003: 2,8 times).
The Group believes that it will in future be able to sustain
a dividend payout ratio of between 2,2 times and 2,6 times.
Given that certain group companies propose to pay dividends
on an annual basis, the interim dividend payments are likely
to be smaller than the final payments.
CORPORATE GOVERNANCE
RMBH and all of the companies in which it invests have
embraced the recommendations of the King II Report on
Corporate Governance. We remain committed to the highest
standard of corporate governance and in this regard strive
to provide reports to shareholders that are timely,
accurate, consistent and informative.
OUTLOOK FOR THE GROUP
The South African economy is expected to show accelerated
growth during the 2005 financial year.
At FirstRand:
- a renewed focus on the Banking Group`s existing African
operations is expected to provide a significant boost to the
results of those businesses. Various new opportunities in
Africa are been evaluated which, if successful, are expected
to enhance growth from this region in the medium to long
term;
- Momentum`s insurance operations will continue to look
for growth opportunities, both organically and through
selective industry consolidation opportunities. Further
innovative product initiatives will be launched in 2004/05;
- Discovery`s strong operating performance, combined with
increased efficiencies, achieved across all its businesses,
has laid the foundations for future growth.
RMBH`s other interests, while overshadowed by the absolute
size of FirstRand, are each unique in their own abilities
and also stand poised to extract further value from their
identified niches.
The Group is confident that the underlying strength of all
its businesses and its relentless focus on both innovation
and operating efficiencies, will continue to deliver good
organic growth. This, combined with a favourable operating
environment and opportunities generated through further
collaboration across business units and the development of
new markets, means that barring any unforeseen shocks, the
Group will maintain its long-term historic real return to
shareholders.
For and on behalf of the board
GT Ferreira P Cooper
Chairman Chief Operating Officer
Sandton
15 September 2004
DIVIDEND DECLARATION
Notice is hereby given that a final dividend of 52,0 cents
per share was declared on 15 September 2004 in respect of
the financial year ended 30 June 2004.
Shareholders` attention is drawn to the following important
dates:
- Last day to trade in order Friday, 15 October 2004
to participate in this dividend
- Shares commence trading `ex Monday,18 October 2004
dividend` on
- The record date for the Friday, 22 October 2004
dividend payment will be
- Dividend payment date Monday, 25 October 2004
No dematerialisation or rematerialisation of share
certificates may be done between Monday, 18 October 2004 and
Friday, 22 October 2004 (both days inclusive).
By order of the board
AH Arnott
Company Secretary
15 September 2004
RMB HOLDINGS LIMITED (`RMBH`) Registration number:
1987/005115/06
Share code: RMH ISIN: ZAE000024501
Directors: GT Ferreira (Chairman), P Cooper (COO),
LL Dippenaar, JW Dreyer, DM Falck, PM Goss,
PK Harris and KC Shubane
Secretary and registered office:
AH Arnott BCom CA(SA)
1st Floor, 4 Merchant Place, corner of Fredman Drive
and Rivonia Road, Sandton, 2196
Postal address:
PO Box 786273, Sandton, 2146
Telephone +27 11 282 8000
Telefax +27 11 282 8008
Sponsor (In terms of the JSE Listings Requirements):
RMB Corporate Finance
(a division of FirstRand Bank Limited)
1 Merchant Place, corner of Fredman Drive and Rivonia Road,
Sandton, 2196
Auditors:
PricewaterhouseCoopers Inc.
2 Eglin Road, Sunninghill, 2157
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg, 2001
Postal address:
PO Box 61051, Marshalltown, 2107
Telephone +27 11 836 7700
Telefax +27 11 836 0792
BASIS OF PREPARATION OF RESULTS
The accompanying results are:
- a consolidation of the operations of RMBH and its two
subsidiaries, OUTsurance and RMB Structured Insurance; and
- RMBH`s proportionate interest in its associates,
FirstRand and Glenrand M.I.B which have been equity
accounted; while
- RMBH ceased equity accounting its interest in Global
Resorts from 1 January 2004, the effective date of its
disposal.
The annual financial statements to which this profit
announcement relates were audited by PricewaterhouseCoopers
Inc. A copy of their unqualified audit opinion is available
for inspection at RMBH`s registered office.
This profit announcement has been prepared in compliance
with the Listings Requirements of the JSE Securities
Exchange South Africa (`the JSE`).
The accounting policies of the RMBH group comply with South
African Statements of Generally Accepted Accounting
Practice. Such policies are in all material respects
consistent with those applied in the preparation of the
unqualified audited financial statements for the year ended
30 June 2003, except for adoption of a new accounting policy
in terms of which shares held by share incentive trusts are
to be eliminated upon consolidation by FirstRand, OUTsurance
and Glenrand M.I.B.
Impact of new accounting policy
By eliminating the shares held by its staff share incentive
trust, a reporting entity reduces the number of shares it
has in issue. As a consequence, the effective interest of
the remaining shareholders changes. The impact of these
changes on RMBH`s effective interest in its investments
(where the staff share incentive trusts held shares) was as
follows:
FirstRand OUTsurance Glenrand
M.I.B
RMBH`s effective interest % % %
in:
At 30 June 2003:
Before consolidation of 32,7 61,2 17,2
share trust
After consolidation of 34,2 65,5 17,1
share trust
At 30 June 2004:
Before consolidation of 32,6 60,3 17,0
share trust
After consolidation of 34,2 65,6 17,1
share trust
The consequential changes arising from such change in RMBH`s
effective interest has been reflected in the accompanying
financial statements. These changes in effective interest
are likely to arise on an annual basis should the underlying
shareholding held by the share incentive trusts change. The
potential future dilution in earnings arising from such
share incentive schemes is reflected in diluted headline
earnings per share.
Certain prior year comparatives have been restated and/or
reclassified to facilitate a more meaningful comparison.
Impact of accounting practices on FirstRand results
These are the first set of year-end results presented which
show both the current and prior year comparative results
after the adoption of `AC133 - Financial Instruments:
Recognition and Measurement`. As highlighted in previous
reports to shareholders, AC133 introduces additional
volatility into the results reported by the Group,
especially those derived from FirstRand. In FirstRand`s
particular case, not all the hedging transactions undertaken
meet the strict criteria of AC133, resulting in inter period
mismatches.
FirstRand has also, consistent with the prior year,
reflected translation gains and losses on currency movements
in its income statement to the extent that the underlying
operations are defined as integral to the South African
based businesses.
FirstRand isolates the impact of these factors when
evaluating its operating performance and discloses the
amounts and impact thereof on its headline earnings
separately. If such analysis is consistently applied to
RMBH`s results, the following trends emerge:
2004 2003 %
Year ended 30 June Rm Rm change
Headline earnings as reported 2 140 1 812 18
AC133 mismatches and foreign 208 101 >100
currency translation
Headline earnings excluding
AC133 mismatches and currency 2 348 1 913 23
volatility
As the AC133 mismatches and foreign currency translation l
osses can be volatile and cannot be forecast with any
certainty, RMBH concurs with FirstRand`s view that such
elimination, when viewed in conjunction with headline
earnings, assist in assessing the sustainable performance of
the group.
SUMMARISED GROUP INCOME STATEMENT
2004 2003
Audited Audited %
for the year ended 30 June Rm Rm change
Operating profit 543 193 >100
Net finance costs (1) (18) 94
Profit before tax 542 175 >100
Taxation (120) (59) >(100)
Operating profit after tax 422 116 >100
Share of after tax results of 1 939 1 607 21
associate companies
Earnings attributable to 2 361 1 723 37
shareholders before goodwill
amortisation
Net goodwill amortised (225) (227) 1
Earnings attributable to (77) (37) >(100)
outside shareholders
Earnings attributable to 2 059 1 459 41
ordinary shareholders
Computation of headline
earnings:
Earnings attributable to 2 059 1 459 41
ordinary shareholders
Adjustment for:
Net goodwill amortised 225 225 -
Profit on sale of interest in (161) - -
Global Resorts
Other (11) 12 >(100)
Adjustment made by associates:
Goodwill amortised or impaired 57 125 (54)
Realised profit on sale of (34) 2
available-for-sale assets >(100)
Other 5 (11) >100
Headline earnings attributable 2 140 1 812 18
to ordinary shareholders
COMPUTATION OF EARNINGS PER SHARE
2004 2003
Audited Audited %
for the year ended 30 June Rm Rm change
Number of shares in issue 1 188 1 188
(millions)
Weighted average number of 1 188 1 188
shares in issue (millions)
Earnings per share (cents) 173,3 122,8 41
Diluted earnings per share 169,5 120,3 41
(cents)
Headline earnings per share 180,1 152,5 18
(cents)
Diluted headline earnings per 176,3 149,9 18
share (cents)
Dividend per share (cents)
Interim 25,5 17,8 43
Final 52,0 37,2 40
Total 77,5 55,0 41
Dividend cover (relative to 2,3 2,8
headline earnings)
SOURCES OF HEADLINE EARNINGS
Headline earnings from:
FirstRand 1 933 1 636 18
Glenrand M.I.B 13 14 (7)
OUTsurance 136 67 >100
RMB Structured Insurance 41 43 (5)
2 123 1 760 21
RMBH, Global Resorts and other 17 52 (67)
Headline earnings 2 140 1 812 18
SUMMARISED GROUP BALANCE SHEET
2004 2003
Audited Audited
at 30 June Rm Rm
ASSETS
Cash and cash equivalents 2 163 1 454
Investments 2 228 1 489
Accounts receivable 339 262
4 730 3 205
Investment in associate companies 8 142 7 551
Property and equipment 109 34
Goodwill 3 359 3 476
Total assets 16 340 14 266
LIABILITIES AND SHAREHOLDERS` FUNDS
Funding instruments 230 292
Accounts payable and accruals 940 752
Short-term insurance provisions 1 905 1 609
Liabilities to policyholders 536 196
3 611 2 849
Outside shareholders` interest 209 124
Shareholders` funds
Share capital and premium 5 793 5 793
Reserves 6 727 5 500
Total shareholders` funds 12 520 11 293
Total liabilities and shareholders` 16 340 14 266
funds
SUMMARISED GROUP CASH FLOW STATEMENT
2004 2003
Audited Audited
for the year ended 30 June Rm Rm
Cash available from operating 1 559 1 261
activities
Cash flows for servicing of finance (745) (570)
from shareholders
Cash flows from investment activities 49 (288)
Cash flows from financing activities (128) (7)
Net increase in cash and cash 735 396
equivalents
Unrealised foreign currency translation (26) (5)
adjustments included in cash and cash
equivalents
Cash and cash equivalents at the 1 454 1 063
beginning of the year
Cash and cash equivalents at the end of 2 163 1 454
the year
Cash available from operating activities includes net
premium receipts by short-term insurance operations. Given
the fluctuations inherent in non-recurring structured
insurance transactions, such cash flows are not necessarily
directly comparable between years.
SUMMARISED STATEMENT OF CHANGES IN EQUITY
Equity
Share Share accounted
Rm capital premium reserves
Balance at 30 June 2002
(audited)
as previously reported 12 5 781 3 229
Minorities` share in prior - - -
year`s retained income
restated
Minorities` share in - - -
contingency reserve
restated
Goodwill amortised - - -
Restatements by associates:
Consolidation of share - - (24)
trust
Restated balance at 30 June 12 5 781 3 205
2002 (audited)
Earnings attributable to - - -
ordinary shareholders
Dividend paid - - -
Income of associated - - 1 033
companies retained
Transfers relating to
subsidiaries:
- Transfer to contingency - - -
reserve by short-term
insurance operations
- Investment reserve - - -
relating to short-term
insurance operations
Transfers relating to
associates:
- Movement on foreign - - (180)
currency translation
reserves
- Movement in revaluation - - 281
reserves
- AC133 adjustments to - - 24
current year
- Consolidation of share - - (6)
trust
Restated balance at 30 June 12 5 781 4 357
2003 (audited)
Earnings attributable to - - -
ordinary shareholders
Dividend paid - - -
Income of associated - - 948
companies retained
Transfers relating to
subsidiaries:
- Transfer to contingency - - -
reserve by short-term
insurance operations
- Investment reserve - - -
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