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AUDITED RESULTS FOR THE NINE MONTHS ENDED 30 NOVEMBER 2004 AND DIVIDEND
DECLARATION
The audited results for the nine months ended 30 November 2004, the interim
results for the six months ended 31 August 2004 and the audited results for the
year ended 29 February 2004 are presented below.
The Group has changed its year-end date from 28 February to 30 November and the
reporting period is for the nine-month period ended 30 November 2004.
Consolidated Income Statements
Audited Reviewed Audited
results Interim results
for the results for the
nine months for the six year
ended months ended
30 November ended 29 Februa
2004 31 August ry 2004
R`000 2004 R`000
R`000
Gross collections 1 971 937 1 218 415 2 042 595
Revenue 26 250 17 033 31 131
Net income before taxation 2 936 1 545 4 336
Taxation (988) (431) (1 477)
SA Normal Taxation (779) (223) (1 408)
Secondary Taxation on (278) (208) (69)
Dividends
Net income after taxation 1 879 1 114 2 859
Dividends (2 221) (1 666) (555)
Attributable income (342) (552) 2 304
retained for the period
Determination of headline
earnings
Attributable income 1 879 1 114 2 859
Add: 53 35 39
Amortisation of Goodwill
Deduct: Profit on (27) (27) (43)
disposal of assets
Headline earnings 1 905 1 122 2 855
Earnings per share
Shares in issue (000`s) 111 092 111 092 111 092
Earnings per share (cents) 1.7 1.0 2.6
Headline earnings per 1.7 1.0 2.6
share (cents)
Dividends per share 2.0 1.5 0.5
(cents)
Consolidated Balance Sheets
Audited Reviewed Audited
As at interim As at
30 November As at 29
2004 31 August February
R`000 2004 2004
R`000 R`000
ASSETS
Non-current assets 21 576 22 804 21 354
Property, plant and 18 452 19 034 17 802
equipment
Other intangible assets 617 634 667
Deferred taxation 2 507 2 493 2 272
Loans receivable - 643 613
Current assets 153 175 123 033 110 472
Accounts receivable 149 348 124 850 102 048
Less: unearned finance (6 264) (5 663) (5 177)
charges
Taxation 870 30 105
Cash resources 9 221 3 816 13 496
Total assets 174 751 145 837 131 826
EQUITY AND LIABILITIES
Capital and reserves 18 320 18 110 18 662
Issued capital 53 654 53 654 53 654
Non-distributable 2 643 2 661 2 698
reserves
Distributable reserves (37 977) (38 205) (37 690)
Current liabilities 156 431 127 727 113 164
Accounts payable 155 577 122 164 112 266
Taxation 834 467 358
Shareholders for 20 21 9
dividend
Bank overdrafts - 5 075 531
Total equity and 174 751 145 837 131 826
liabilities
Shares in issue (000) 111 092 111 092 111 092
Net asset value per 16.5 16.3 16.8
share (cents)
Tangible net asset 15.9 15.7 16.2
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 29 11 53 643 (37 2 698 18 662
February 2004 690)
Earnings attributable to
shareholders
Ongoing operations 1 879 - 1 879
Revaluation depreciation 55 (55) -
Dividends paid (2 221) - (2 221)
Balance at 30 November 11 53 643 (37 2 643 18 320
2004 977)
Abridged Consolidated Cash Flow Statements
Audited Reviewed Audited
Nine Six Months Twelve
Months 31 August Months
30 2004 29
November R`000 February
2004 2004
R`000 R`000
Cash flow generated by (1 462) (11 509) 9 350
operating activities
Cash flow used in investing (2 274) (2 685) (4 470)
activities
Cash flow generated by - (30) 810
financing activities
Cash and cash equivalents - 12 965 12 965 7 275
beginning of year
Cash and cash equivalents - 9 221 (1 259) 12 965
end of year
Segmental Analysis
Audited Reviewed Audited
Twelve Six Months Twelve
Months 31 August Months
30 2004 29
November February
2004 2004
% R`00 % R`000 % R`000
0
Revenue
Net interest earned 65% 17 65% 11 63% 19
096 032 714
Fees charged 33% 8 32% 5 486 31% 9 611
588
Other 2% 566 3% 515 1 805
6%
Revenue as reported 100 26 100 17 100 31
% 250 % 033 % 130
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 leading financial services provider to the short term insurance
market, independently positioned as a preferred solution for premium
collections, premium financing and outsource services for participants within
this industry.
Review of operations
The Board of INSURE approved the change of the financial year-end date to 30
November and is pleased to present the results for the nine months ended 30
November 2004. During this period INSURE remained focussed on its client
retention and growth strategy, thereby enhancing its objective of being the
preferred independent financial services provider to the short-term insurance
industry.
INSURE continued to increase market share by providing high service levels.
Following the Premium Credit SA (Proprietary) Limited (`Premium Credit`)
acquisition in October 2003, INSURE acquired Anvil Premium Finance from Regent
Insurance Company Limited in June 2004, expanding the premium financing business
in line with its growth strategy.
The short term insurance market continues to create opportunities for INSURE as
a result of its ongoing changes. The Group`s flexibility as an independent
service provider, combined with specialist knowledge and capabilities, allow for
continued repositioning and support of a governed and dynamic market. In
addition, INSURE provides a consistent level of credit management through which
its clients and industry users can operate.
For the period under review, the interest rate has continued to reduce,
impacting negatively on gross margins and interest income. However, this impact
has been offset by the increase in volumes of business handled, resulting in a
slight increase in net profit after taxation compared to the same period in the
prior year. Shareholders are referred to the paragraph below for a more detailed
comparison to the unaudited nine-month period ended 30 November 2003.
Nine-month comparison
For the nine-month comparative period, the Prime interest rate declined by 29%,
impacting negatively on margins. The impact was offset by a 35.3% growth in
gross collections and premiums handled, supporting a 13.9% increase in turnover,
from R23.1 million to R26.3 million. Net income after normal taxation before
Secondary Taxation increased by 3.5%. These results were achieved amidst
significant governing changes and challenges in the market. INSURE`s strategy of
achieving economies of scale, cost efficiencies and competitive pricing
remaining a priority, whilst maintaining its level of quality, service and
deliverables.
Acquisition - Anvil Premium Finance
In May 2004 INSURE announced the acquisition of the Anvil Premium Finance
operating division and debtors book from Regent Insurance Company Limited
effective from 1 June 2004 at net asset value. As with the Premium Credit
acquisition in 2003 from First Rand, the rationale is to expand INSURE`s premium
financing activities in accordance with its growth strategy for core products
and competencies, in addition to optimising scale economies. Anvil is now
successfully integrated into the INSURE group.
Prospects
Management will remain focussed on strategic and operational objectives within
the short term insurance market, thereby supporting and expanding a sustainable
client base through INSURE`s quality, tailored products and service solutions.
Change of year-end
INSURE has changed its year-end to 30 November each year. The changing of
INSURE`s year-end was to streamline the auditing and governing administration
process of the business away from the Group`s busiest sales and turnover cycles,
being from February to November each year.
Dividend
The Board of Directors is pleased to announce that a final dividend of 1.45
cents per share (one point four five cents), has been declared, and is payable
to shareholders on Monday, 07 February 2005. The last date to trade `Cum`
dividend will be Friday, 28 January 2005. `Ex` dividend trade will commence on
Monday, 31 January 2005 and the record date will be Friday, 04 February 2005.
Shareholders are advised that share certificates may not be dematerialised or
rematerialised between Monday, 31 January 2005 and Friday, 04 February 2005,
both days inclusive.
For and on behalf of the Board
D.G Eriksson D. M. Burns
Chairman Chief Executive
14 January 2005
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. C.J.P Cilliers, 6 St Giles Street, Randburg, 2125.
Transfer secretaries
Computershare Investor Services 2004 (Proprietary) Limited, 70 Marshall Street,
Johannesburg.
Postal address and E-mail
P.O. Box 2867, Randburg, 2125
and results2005@ioh.co.za
Designated Advisor
Arcay Corporate Services
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