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Insure - Unaudited interim results for the six months ended 31 May 2005
Insurance Outsourcing Managers Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/013121/06)
(`INSURE` or `the Group`)
ISIN: ZAE000033221 JSE Code: INS
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MAY 2005
The unaudited interim results for the six months ended 31 May 2005, with
comparative period ended 31 May 2004 and the audited results for the nine months
ended 30 November 2004 are presented below. In the prior period the Group has
changed its yearend from 28 February to 30 November.
Consolidated Income Statements
Unaudited Unaudited Audited
Interim Interim Results for
results for results for the
the the nine months
six months six months ended
ended ended 30 November
31 May 2005 31 May 2004 2004
R`000 R`000 R`000
Gross collections 1,659,500 1,159,887 1 971 937
Revenue 20 261 15 644 26 531
Net income before taxation 3 232 2 067 2 897
Taxation (1 379) (722) (1 054)
SA Normal Taxation (1 178) (619) (776)
Secondary Taxation on (201) (103) (278)
Dividends
Net income after taxation 1 853 1 345 1 843
Dividends (1 595) (828) (2 217)
Attributable income 258 517 (374)
retained for the period
Determination of headline
earnings
Attributable income 1 853 1 345 1 843
Add: 38 38 43
Amortisation of Goodwill
Deduct: Profit on (25) - (27)
disposal of assets
Headline earnings 1 866 1 383 1 859
Earnings per share
Shares in issue (000`s) 111 092 111 092 111 092
Earnings per share (cents) 1.7 1.2 1.7
Headline earnings per 1.7 1.2 1.7
share (cents)
Dividends per share 1.45 0.75 2.0
(cents)
Consolidated Balance Sheets
Unaudited Unaudited Audited
As at As at As at
31 May 2005 31 May 2004 30 November
R`000 R`000 2004
R`000
ASSETS
Non-current assets 21 285 21 356 21 562
Property, plant and 18 304 17 802 18 474
equipment
Other intangible assets 706 613 624
Deferred taxation 2 099 2 273 2 464
Loans receivable 177 668 -
Current assets 175 666 109 881 153 963
Accounts receivable 114 808 96 872 144 724
Taxation 45 44 45
Cash resources 60 813 12 965 9 194
Total assets 196 951 131 236 175 525
EQUITY AND LIABILITIES
Capital and reserves 18 547 18 663 18 288
Issued capital 53 654 53 654 53 654
Non-distributable reserves 2 604 2 698 2 642
Accumulated loss (37 711) (37 691) (38 008)
Current liabilities 178 404 112 574 157 237
Accounts payable 177 495 112 267 156 432
Taxation 898 297 788
Shareholders for dividend 11 10 17
Total equity and 196 951 131 236 175 525
liabilities
Shares in issue (000) 111 092 111 092 111 092
Net asset value per share 16.7 16.8 16.5
(cents)
Tangible net asset value 16.1 16.2 15.9
per share
Consolidated Statement of Changes in Equity
Non
Share Share Accumulated distributable
Capital Premium Loss Reserve Total
R`000 R`000 R`000 R`000 R`000
Balance reported at 29 11 53 643 (37 690) 2 698 18 662
February 2004
Earnings attributable
to shareholders
Ongoing operations 1 843 1 843
Revaluation 56 (56) -
depreciation
Dividends paid (2 217) (2 217
Balance at 30 November 11 53 643 (38 008) 2 642 18 288
2004
Balance reported at 1 11 53 643 (38 008) 2 642 18 288
December 2004
Earnings attributable
to shareholders
Ongoing operations 1 853 1 853
Revaluation 38 (38) -
depreciation
Dividends paid (1 595) (1 595
Balance at 31 May 2005 11 53 643 (37 711) 2 604 18 547
Abridged Consolidated Cash Flow Statements
Unaudited Unaudited Audited
Six months Six months Nine Months
31 May 2005 31 May 2004 30 November
R`000 R`000 2004
R`000
Cash flow generated by operating 53 127 41 151 (836)
activities
Cash flow used in investing (1 508) (1 285) (2 935)
activities
Net cash flow for the period 51 519 39 866 (3 771)
Cash and cash equivalents - beginning 9 194 (26 901) 12 965
of year (Nov)
Cash and cash equivalents - end of 60 813 12 965 9 194
period
Segmental Analysis
Unaudited Unaudited Audited
Six months Six months Nine months
31 May 2005 31 May 2004 30 November
2004
% R`000 % R`000 % R`000
Revenue
Net interest earned 64% 12,977 67% 10,524 65% 17,096
Fees charged 33% 6,717 32% 4,930 32% 8,588
Other 3% 567 1% 190 3% 847
Revenue as reported 100 20,261 100 15,644 100 26,531
% % %
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.
Nature of business
INSURE is a service provider to the short-term insurance market and is
positioned as a leading, independent solution for premium collections, premium
financing and outsource services for the industry.
Review of operations
During the previous year, the Board approved the changing of the financial year-
end to 30 November, resulting in the interim period moving from February to May.
The Board is pleased to present the results for the interim period ended 31 May
2005.
INSURE`s positioning, retention and growth strategy during this period again
delivered an increase in volumes and premiums managed. This was supported by
organic growth within the base products, specifically premium collections and
premium financing from R1.16 billion to R1.66 billion.
As announced in the published trading update, the reduction in and prevailing
low Prime interest rate continued to have a negative effect on the Group`s
performance. However, the impact was offset by an increase in volumes of
business and premiums managed. Shareholders are referred to the paragraph below
for a more detailed comparison.
Interim comparison
For the six-month comparative period the Prime interest rate declined from 11.5%
to 10.5%, affecting margins negatively. Growth in gross collections and premiums
handled increased 43%, supported by a 30% increase in turnover, from R15.6
million to R20.3 million. Net income after normal taxation, before Secondary
Taxation, increased by 42% coming off a low base. These results were in line
with an operational restructure in December 2004, anticipated interest rate
changes and human resource optimisation.
November and May are both low premium financing points in the general insurance
industry, resulting in significant cash balances at the period ends. From the
cash flow statement, the adverse opening balance at 30 November 2003 is directly
attributable to the need to finance the Premium Credit S A debtors book acquired
in October 2003.
Prospects
INSURE will continue to focus on strategic and operational objectives, achieving
economies of scale, cost efficiencies and competitive pricing, while supporting
and expanding a sustainable client base through tailored products and service
solutions.
Empowerment
INSURE supports the objectives of the Financial Services Charter and is
continually evaluating compliance requirements in terms of the scorecard.
Dividend
Shareholders are advised that the directors have decided not to declare an
interim dividend due to the proposed delisting application and offer being made
to the minority shareholders referred to below. The dividend declaration in this
reporting period relates to the results for the nine months ended 30 November
2004.
The delisting of INSURE
As previously announced, application has been made to the JSE for the delisting
of INSURE from AltX. Subject to the approval of the delisting of INSURE from the
JSE, a delisting circular and approval by shareholders in general meeting for
the delisting, combined with an offer to minority shareholders by way of a
specific authority to repurchase shares for a purchase consideration of 23 cents
per ordinary share will follow.
For and on behalf of the Board
D.G Eriksson D. M. Burns
Chairman Chief Executive
4 August 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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