| Wed 18 May 2005, 14:47 | | Metropolitan - Operational performance for the thr |
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Metropolitan - Operational performance for the three months ended 31 March 2005
Metropolitan Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 2000/031756/06
ISIN: ZAE000050456
JSE Share Code: MET
NSX Share Code: MTD
Operational performance for the three months ended 31 March 2005
Comments
* All figures are provisional and unaudited.
* The basis on which the figures have been calculated is the same as that
used for embedded value purposes. Premium income is included from the date
on which policies come into force as opposed to the date on which they are
accepted. (Figures calculated on the latter basis are normally referred to
as production figures). It should be noted that there can be a delay of up
to three months between these two dates.
* The new business figures are all net of outside shareholders` interests.
* Metropolitan Botswana was 75.8% owned throughout the period.
* Metropolitan Namibia was 80.9% owned throughout the period.
Retail business
3 months 3 months 3 months
to to to
31-Mar-03 31-Mar-04 31-Mar-05
Rm Rm Rm
Recurring premiums 125 171 168
Single premiums 217 202 266
APE 147 191 195
* In line with expectations, new recurring premium income was slightly down
on 1Q04 for the following reasons:
* benefits from changed commission structure, which shortened the time
delay between production and in-force in 2004, were not repeated
* slower issuing of policies due to FAIS admin resulted in a slow down
of policies issued in 4Q04
* stronger focus on the quality of business being issued
initial impact of retail enhancement initiative (REI) (aimed at
reducing new business costs)
* unsatisfactory group schemes production
* Management remains confident about growth prospects for the full year
because:
* single premium income grew strongly, driven mainly by Odyssey
the return to full production by direct marketing during this quarter
* expected increase in production levels due to stronger emphasis on
productivity
* total recurring premium income received increased well in excess of
inflation
* outflow levels dropped and claims experience was in line with
expectations
* a new range of investment products, FutureChoice, was launched
* KTI`s pro-active involvement in opening new business doors
* retention rates remain within acceptable limits, with lapses at
inception still below the group target of 15%
Corporate business
3 months 3 months 3 months
to to to
31-Mar-03 31-Mar-04 31-Mar-05
Rm Rm Rm
Recurring premiums 67 54 17
Single premiums 133 245 79
APE 80 79 25
* The 1Q05 does not compare favourably to the exceptional performance of 2004
due to:
* extremely difficult market conditions
* negative views on smoothed bonus business
* no significant single premiums were secured.
* A significant increase in scheme terminations accompanied by a sharp drop
in single premium business resulted in a small negative cash flow for the
quarter.
* On the positive side:
* total recurring premium income showed a healthy increase over 2004
* a portion of the outflows was re-invested with MetAm under separate
investment mandates
* claims experience on the NUM risk scheme remained within the pricing
parameters
* MetEB is not engaging in loss-leading strategies in order to gain
market share
* independently, and together with KTI, MetEB is currently exploring new
business opportunities.
Metropolitan Asset Managers
* 1Q05 performance ranked in the top quartile of the Alexander Forbes Large
Manager Watch
* a number of new mandates were awarded to MetAM
* all funds exceeded their performance benchmarks in 1Q05
* Liston Meintjes, newly appointed CIO, joined the team earlier this month
International business
3 months to 3 months 3 months
to to
31-Mar-03 31-Mar-04 31-Mar-05
Rm Rm Rm
Recurring premiums 25 25 23
Individual life 24 20 19
Employee benefits 1 5 4
Single premiums (incl EB) 5 6 67
APE 26 26 30
* conditions remain challenging in all the markets in which we operate
* new individual life recurring premium business under pressure
* pleasing improvement in single premium business
* employee benefits new business down quarter on quarter
* total recurring premium income showed a respectable increase over 2004
* net positive cashflow position continues
* integration of Channel Life in Namibia progressing according to plan
Health business
* main focus on the smooth take-on of the administration and managed care
business of Polmed
* 440 000 principal members under administration (1Q04 - 332 000)
* performance levels across the board are in line with service level
agreements
* a key upcoming opportunity is the Government Employees Medical Scheme
(GEMS)
* non-administration services continuing to secure new business contracts
* outlook remains positive
Group perspective
Cash flow
The positive cash flow position of the group was maintained.
Administration expenses
Administration expenses remain a key area of focus. Overall life insurance
administration expenses were well contained and are on target.
Corporate developments
2005 empowerment rankings
Metropolitan`s leading empowerment credentials were confirmed by various
independent surveys, including the Financial Mail/Empowerdex top empowerment
companies survey (March 2005) and the BusinessMap Foundation BEE Awards 2005
(March 2005).
New directors
Three directors were appointed to the board: Fatima Jakoet, Sindi Mabaso and
Bulelwa Ndamase.
Fatima, B Sc, CA (SA), is currently general manager of DLS, Western Cape (part
of Denel) while Sindi, B Comm, CA (SA), runs her own financial and risk
management consultancy and Bulelwa is the MD of Ndmase Incorporated, a
commercial law firm in KZN.
Empowerment shareholding
When we announced the initial transaction with KTI we informed the market that
in time we would look at expanding this transaction.
KTI have recently re-affirmed their intentions in this regard and are currently
exploring ways of achieving this objective, including investigating funding
options.
Various ways of including a management consortium are currently being evaluated
by the company.
IFRS
The IFRS conversion and implementation project is continuing to make steady
progress. The layout of the group financial statements will have to be changed
significantly, with extensive reclassifications and additional disclosure
requirements. However, the overall impact on the results of the group is not
expected to be significant.
Share liquidity
2005 has seen higher trading volumes on the JSE in general, with growing
interest by foreign fund managers. The number of shares traded in the first
quarter of 2005 was 98% higher than that recorded in the first quarter of 2004,
while our foreign direct shareholding has continued to increase.
End
DATE 18 MAY 2005
QUERIES PETER DOYLE
GROUP CHIEF EXECUTIVE
METROPOLITAN HOLDINGS LIMITED
TEL 021 9405681 OR 082 880 2690
PRESTON SPECKMANN
GROUP FINANCE DIRECTOR
METROPOLITAN HOLDINGS LIMITED
TEL 021 9406634 OR 083 285 6454
TYRREL MURRAY
GENERAL MANAGER FINANCE & INVESTOR RELATIONS
METROPOLITAN HOLDINGS LIMITED
TEL 021 940 5083 OR 082 889 2167
Date: 18/05/2005 02:30:27 PM
Produced by the JSE SENS Department
