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SA Eagle - Results and dividend declaration for the year ended 31 December 2004
SOUTH AFRICAN EAGLE INSURANCE COMPANY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1965/006764/06)
Share code: SAE ISIN: ZAE000006243
Announcement of the reviewed results and dividend declaration
for the year ended 31 December 2004
The Directors announce the Group results for the year ended 31 December 2004.
Rand thousands Note 2004 2003
SUMMARISED INCOME STATEMENT
GROSS WRITTEN PREMIUM 3 191 143 3 189 100
_____________________________
Underwriting profit 5 235 794 127 703
Investment income 6 169 033 152 772
Investment expenses (3 396) (3 346)
_____________________________
401 431 277 129
Net realised surplus on disposal of
investments 70 105 49 914
Pension fund valuation adjustment (10 000) -
_____________________________
PROFIT before taxation 461 536 327 043
Taxation (109 214) (81 968)
_____________________________
PROFIT after taxation 352 322 245 075
Minority and cell shareholders` interests (24 388) (21 156)
-----------------------------
- Minority interest (2 318) (2 034)
- Cell shareholders` interest (22 070) (19 122)
-----------------------------
_____________________________
Net profit attributable to members of
the Company 327 934 223 919
_____________________________
HEADLINE EARNINGS PER SHARE (cents) 2 2 140.8 1 475.5
EARNINGS PER SHARE (cents) 4 2 692.5 1 838.5
PAID/DECLARED DIVIDENDS PER SHARE (cents) 650.0 450.0
SPECIAL DIVIDEND DECLARED PER SHARE (cents) 2 300.0 -
ABRIDGED BALANCE SHEET
ASSETS
Property, plant and equipment 63 518 71 335
Investments 7 902 941 785 089
Deferred taxation 8 389 8 293
Technical assets 441 800 408 776
Current assets 904 584 774 142
Cash and cash equivalents 1 152 371 889 121
_____________________________
TOTAL ASSETS 3 473 603 2 936 756
_____________________________
EQUITY AND LIABILITIES
Shareholders` equity 1 513 203 1 197 872
Minority and cell shareholders` interests
in subsidiaries 50 005 54 780
-----------------------------
- Minority shareholders` interest 2 226 2 958
- Cell shareholders` interest 47 779 51 822
-----------------------------
Retirement benefit obligation 83 578 68 941
Technical provisions 1 518 717 1 396 865
Current liabilities 308 100 218 298
_____________________________
TOTAL EQUITY AND LIABILITIES 3 473 603 2 936 756
_____________________________
COMMENTARY
The excellent underwriting results continued during the second half of 2004 with
a full year underwriting profit of R235.8m which is an improvement of 85%. Gross
written premiums were marginally up at R3 191m (2003: R3 189m) reflecting the
competitive market conditions during the period.
All underwriting accounts have performed well during the year as a result of a
strict adherence to underwriting principles, appropriate pricing, rigorous risk
assessment and improved claims management. In addition, benign weather patterns
resulted in fewer natural catastrophes which has also contributed to the
positive result.
Given that the underwriting cycle is expected to flatten in the medium term,
the main challenge will be to maintain profitability while continuing to grow.
In this regard underwriting discipline will remain a key focus.
A pension fund valuation adjustment of R10m has been provided for to cater for
an expected additional Company contribution as a result of the promulgation of
the Pension Funds Second Amendment Act and the Company`s pension fund surplus
apportionment exercise.
The growth in equity values during the year has contributed to an excellent
investment performance. The increased cash flow as a result of the positive
underwriting performance has resulted in investment income improving to R169.0m
(2003: R152.8m) despite the decline in interest rates.
The Company has continued its equity disposal programme during the year
realising gains of R70.1m (2003: R49.9m).
Headline earnings have increased by 45.1% to 2 140.8 cents per share
(2003: 1 475.5 cents per share) and the solvency margin has significantly
improved to 57.9% compared to 47.1% at the end of 2003.
The Directors have declared a special dividend of 2 300 cents per share and a
final dividend of 470 cents per share (2003: 300 cents per share) bringing the
total normal dividend for the year to 650 cents per share (2003: 450 cents per
share). These dividends are in line with the stated policy of having a
sustainable or increasing normal dividend payment whilst maintaining solvency
in the 40% to 50% range.
SPECIAL DIVIDEND DECLARATION
1. The Directors have declared a special dividend for 2004 of 2 300 cents
per share.
2. The dividend is payable in accordance with the following timetable:
Last day to trade in order to participate
in the dividend: Friday, 4 March 2005
Shares commence trading ex the dividend
from the commencement of business on: Monday, 7 March 2005
Record date: Friday, 11 March 2005
Payment date: Monday, 14 March 2005
Shareholders may not dematerialise or rematerialise their holdings of shares in
the Company between Monday, 7 March 2005 and Friday, 11 March 2005 both days
inclusive.
DIVIDEND DECLARATION NO. 67
1. The Directors have declared a final dividend for 2004 of 470 cents per share
(2003: 300 cents per share) giving a total for the year of 650 cents per
share (2003: 450 cents per share).
2. The dividend is payable in accordance with the following timetable:
Last day to trade in order to participate
in the dividend: Friday, 8 April 2005
Shares commence trading ex the dividend
from the commencement of business on: Monday, 11 April 2005
Record date: Friday, 15 April 2005
Payment date: Monday, 18 April 2005
Shareholders may not dematerialise or rematerialise their holdings of shares in
the Company between Monday, 11 April 2005 and Friday, 15 April 2005 both days
inclusive.
By order of the Board.
GM Riddell Chairman
NV Beyers Managing Director
Bryanston
10 February 2005
CONDENSED STATEMENT OF CHANGES IN EQUITY
Balance at beginning of year 1 197 872 974 650
Revaluation of investments 69 306 36 683
Translation of foreign subsidiaries (23 447) (841)
Net profit for the year 327 934 223 919
Dividends paid (58 462) (36 539)
_____________________________
Balance at end of year 1 513 203 1 197 872
_____________________________
CONDENSED CASH FLOW STATEMENT
Cash retained from operating activities 301 981 187 767
Net increase in working capital (53 551) (5 325)
Dividends, interest and rental received 157 351 150 350
Taxation paid (118 054) (91 411)
Dividends paid (58 462) (36 539)
Cash effect of investing activities 33 985 1 304
_____________________________
Net increase in cash and cash equivalents 263 250 206 146
_____________________________
NOTES
1. Accounting policies
The financial statements are prepared in accordance and comply with the
South African Statements of Generally Accepted Accounting Practice. The
accounting policies applied in the preparation of these financial
statements are consistent with those used in the prior year.
2. Determination of headline
earnings
Net profit attributable to
members of the Company 327 934 223 919
After-tax adjustments for:
- Net realised surplus on
disposal of investment,
property, plant and
equipment (67 192) (44 215)
_____________________________
Headline earnings 260 742 179 704
_____________________________
Headline earnings per share
(cents) 2 140.8 1 475.5
Rand thousands South Africa Foreign Total
subsidiaries
3. Segmental information
Twelve months ended 31
December 2004
Gross written premium
General insurance business 2 840 241 201 536 3 041 777
Alternative risk transfer
business 149 366 - 149 366
_____________________________________________
2 989 607 201 536 3 191 143
_____________________________________________
Profit before taxation
General insurance business 390 701 32 893 423 594
Alternative risk transfer
business 37 942 - 37 942
_____________________________________________
428 643 32 893 461 536
_____________________________________________
Net assets
General insurance business 1 345 314 85 636 1 430 950
Alternative risk transfer
business 132 258 - 132 258
_____________________________________________
1 477 572 85 636 1 563 208
_____________________________________________
Twelve months ended 31
December 2003
Gross written premium
General insurance business 2 706 160 218 285 2 924 445
Alternative risk transfer
business 264 655 - 264 655
_____________________________________________
2 970 815 218 285 3 189 100
_____________________________________________
Profit before taxation
General insurance business 246 279 36 149 282 428
Alternative risk transfer
business 44 615 - 44 615
_____________________________________________
290 894 36 149 327 043
_____________________________________________
Net assets
General insurance business 1 026 819 85 980 1 112 799
Alternative risk transfer
business 139 853 - 139 853
_____________________________________________
1 166 672 85 980 1 252 652
_____________________________________________
4. Other financial information
Earnings per share (cents) 2 692.5 1 838.5
Dividend paid per share
(cents) 480.0 300.0
Number of shares in issue 12 179 500 12 179 500
Net asset value per share
(cents) 12 424 9 835
Solvency margin (%) 57.9 47.1
5. Profit before tax after
charging/(crediting)
Depreciation 17 723 23 336
Surplus on disposal
of property, plant and
equipment (2 580) (1 495)
6. Investment income
Interest and rental income 137 170 129 896
Dividends 20 181 20 454
Unrealised gains on trading
bonds 11 682 2 422
_____________________________
Total investment income 169 033 152 772
_____________________________
7. Investments
Investment properties 27 958 27 156
Investment in associates 19 710 19 830
-----------------------------
- Listed 9 710 6 573
- Unlisted 10 000 13 257
-----------------------------
Mortgages and loans 8 387 9 415
Available-for-sale investments 523 976 474 355
-----------------------------
Ordinary shares
- Listed 478 871 431 400
- Unlisted 36 534 37 855
Preference shares
- Listed 1 165 -
- Unlisted 1 925 2 118
Government and other approved
securities 5 445 2 931
Municipal annuities and other
fixed interest securities 36 51
-----------------------------
Trading investments 322 910 254 333
_____________________________
Total investments 902 941 785 089
_____________________________
8. Auditors
The preliminary announcement has been reviewed by the Company`s external
auditors, PricewaterhouseCoopers Inc. A copy of their review opinion is
available on request at the Company`s registered office.
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street
Johannesburg
2001
Registered office
South African Eagle Insurance Company Limited
Registration number 1965/006764/06
SA Eagle House
The Braes
193 Bryanston Drive
Bryanston
2021
Sponsor
Rand Merchant Bank,
a division of FirstRand Bank Limited
Corporate Finance
Date: 10/02/2005 04:00:17 PM
Produced by the JSE SENS Department
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