| Wed 21 Sep 2005, 15:02 | | RESULTS FOR THE YEAR ENDED 30 JUNE 2005 |
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RMBH - Summarised, audited results announcement for the year ended 30 June 2005
RMB Holdings Limited
Registration number: 1987/005115/06)
ISIN: ZAE000024501
Share Code: RMH
SUMMARISED, AUDITED RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 30 JUNE 2005
`These excellent results highlight the sweet spot in which the South African
financial services sector currently finds itself . . .`
GT Ferreira - Chairman
100 cents per share (R1,2 billion)to be returned to shareholders
Headline earnings
+30%
to 234,9 cents or R2,8 billion
Dividend
+21%
to 94,0 cents or R1,1 billion
Intrinsic value
+34%
to 2 258 cents or R26,8 billion
THE RMBH GROUP AT A GLANCE
RMBH is the holding company of some of South Africa`s leading financial services
companies. Our interests include:
* FirstRand Limited (the `FirstRand group`) (effective interest: 32,0%*)
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.
The FirstRand Banking group provides customers with a comprehensive range
of products and services according to specific target market segments.
* First National Bank services the retail, business and medium corporate
segments. In addition it provides transactional services to the group`s
large corporate clients;
* Rand Merchant Bank is responsible for the large corporate segment, to which
it provides loans, value added advisory and structuring services; while
* WesBank is South Africa`s dominant movable asset financier.
The balance of the Banking group includes its African banking subsidiaries and
Banking Group Treasury.
Momentum targets individuals principally in the middle and upper income markets,
under the Momentum Life, Momentum Wealth, Momentum Health and RMB Unit Trust
brand names.
Discovery (64,7% held) services the health insurance and life assurance markets.
* OUTsurance Limited (`OUTsurance`) (effective interest: 63,4%*)
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.
* RMB Structured Insurance Limited (`RMBSI`) (effective interest: 82,0%*)
RMBSI holds both short-term and life assurance licences. It creates
individual insurance and financial risk solutions for South Africa`s large
corporations by using sophisticated risk techniques and innovative
financial structures.
* Glenrand M.I.B Limited (`Glenrand M.I.B`) (effective interest: 16,9%*)
Glenrand M.I.B is a 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 shows slight
variations between years as a result of the consolidation, by such entities, of
their staff share incentive schemes. In addition, the interest in FirstRand and
RMBSI also reflects the impact of BEE ownership transactions entered into by
them.
OVERVIEW OF RESULTS
RMBH`s financial year ended 30 June 2005 played out against a background of:
* A global economy that expanded at its fastest pace in more than two
decades. As a consequence, commodity prices and international trade volumes
soared. This continued growth in the global economy was largely driven by
strong consumer spending, large increases in residential building activity
and a solid expansion in fixed investment.
* In South Africa, the year was characterised by continued growth in consumer
spending, strong increases in corporate output, rising business fixed
investment and net new employment creation - all against a backdrop of
lower inflation and interest rates.
* Our markets adapted to this structurally lower interest rate and inflation
environment with asset prices experiencing strong increases. The property,
bond and share markets all experienced substantial gains.
In combination, these factors created a `sweet spot` 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 per share growing by 30% to 234,9 cents (2004: 180,6 cents).
The intrinsic value of our underlying investment portfolio benefited from strong
organic growth and exceptional increases in the value of financial counters on
the JSE. As a result, the intrinsic value of RMBH rose by 34% to some R26,8
billion (or 2 258 cents per share (2004: 1 689 cents)).
As part of their broader transformation initiatives, two group companies
implemented BEE ownership transactions during the last quarter of the financial
year. As a consequence, our effective interest in FirstRand declined to 32%
(2004: 34%) while that of RMBSI decreased from 100% to 82%. For the year under
review, the headline earnings impact of these transactions was not material. In
terms of the FirstRand transaction, all shareholders were required to offer 7,6%
of their interest in the company to the BEE participants. In return, for the
shares offered by it, RMBH received a cash consideration of R1,7 billion. This,
together with RMBH`s existing cash resources brought RMBH`s net surplus cash
resources at year end to R1,95 billion, or some 7,3% of the group`s underlying
intrinsic value.
Given the strong underlying operational trend reflected by the group`s headline
earnings RMBH declared a final dividend of 52,0 cents per share which, together
with the interim divided of 42,0 cents per share, brings the total dividend for
the year to 94,0 cents per share (2004: 77,5 cents), representing a year on year
increase of 21% and a dividend cover ratio (on headline earnings) of 2,5 times
(2004: 2,3 times).
Given RMBH`s strong capital position and the surplus cash resources arising from
the FirstRand BEE transaction, the Board has resolved, subject to shareholder
approval, to return 100 cents per share (R1,19 billion in total) to shareholders
by way of a reduction of RMBH`s share premium.
We believe this to be an excellent set of results that reflects the benefits of
a diverse and resilient earnings base and the benefits of sustained focus on our
core businesses, which were well positioned to benefit from the benign
environment which we encountered during the year under review.
REVIEW OF OPERATIONS
FIRSTRAND GROUP
Summary of FirstRand financial results
Year ended 30 June
Rm 2005 2004 % change
Headline earnings comprises:
- FirstRand Banking Group 6 492 4 796 35
- Momentum Group 1 287 1 081 19
- Discovery Group 350 265 32
- FirstRand Limited (including (372) (274) (36)
preference dividend payments)
- Consolidation of share trusts (155) (105) (48)
Group headline earnings 7 602 5 763 32
Attributable to RMBH* 2 524 1 946 30
* After consolidation eliminations
Operating environment
The results achieved by the FirstRand group reflect how well positioned each of
its businesses was to take advantage of the economic environment during the
financial year.
The performance of the FirstRand Banking group reflects
* the impact of significantly lower domestic interest rates, which resulted
in strong growth in consumer credit demand - particularly for asset backed
finance and mortgage advances. This did, however, place pressure on margins
both for deposits and on the asset side of the banking book. While
endowment income was negatively affected by lower interest rates, this was
partially offset by interest rate hedging strategies; and
* strong growth in non-interest income due to higher transactional income
primarily from increased client numbers, transaction volume growth, and new
products; while
* a significant appreciation in the equity markets, together with trending
interest rates and foreign exchange markets, benefited the Banking group`s
trading and investment teams.
Momentum Group experienced yet another year of superior earnings growth,
characterised by increased acquisition activity as it sought to capitalise on
consolidation opportunities in its chosen markets as well as strong organic
growth in all areas.
Discovery Group delivered an excellent performance, driven by strong growth in
all business areas.
The savings industry is undergoing significant change in the face of
requirements for greater flexibility, better disclosure and greater competitive
and regulatory pressures. The assurers in the group are proactively responding
to these challenges with the aim of delivering value for money products to their
customers on a sustainable basis.
Financial results
FirstRand Banking group
The FirstRand Banking group produced excellent results benefiting from very
strong performances from RMB, FNB and WesBank and grew headline earnings by 35%
to R6,49 billion. Of note:
* Non-interest revenue grew by a significant 34,0%, benefiting from strong
growth in transactional income from FNB and WesBank and from all RMB
business units.
* The bad debts charge has declined in line with the improvement of the
credit quality of the advances book. The level of non performing loans has
improved marginally, due to the current benign credit environment.
* The lower interest rate environment reduced endowment income while the
competitive landscape continues to place pressure on interest margins.
However, volume growth in the advances and the deposit book, and the group
interest rate hedging strategies more than compensated for the decline in
margins.
First National Bank grew its profits by 17% to R2,9 billion. Its consumer
banking activities performed particularly well, with strong asset growth from
card and mortgages. Non-interest revenue showed strong growth due to growth in
new clients and increased economic activity. Retail deposits continued to show
satisfactory growth, in line with overall market growth.
Rand Merchant Bank`s portfolio of businesses all performed well, particularly
the businesses leveraged to and operating in the improved equity markets and
increased profits by 31% to R1,4 billion. The trading, asset management and
broking businesses benefited directly from greater trading volumes and increased
values. BEE activity, comprising advisory mandates, underwriting, senior and
mezzanine debt financing and private equity provided good deal flow to the
business.
WesBank produced an excellent performance with profits increasing by 33% to R1,0
billion. Gross advances grew by 29% when compared to the prior year. Continued
buoyancy in the retail vehicle market, coupled with the existing and forecast
low interest rate environment, contributed to this high production growth.
The total capital adequacy ratio declined to 11,9% (2004: 13,8%) as a result of
the strong asset growth achieved and remains within the group`s target range of
11,5% to 12,0%. The Banking group achieved a return of 28,8% on average ordinary
equity.
Momentum Group
Momentum produced strong results with headline earnings increasing by 19% to
R1,3 billion. The South African insurance operations grew profits by 19%, driven
by strong new business inflows and a focus on expense efficiencies.
The embedded value of the Momentum Group increased by 22% to R11,8 billion. The
embedded profit for the period represents a return of 28% on opening embedded
value, reflecting strong growth in both the shareholder`s portfolio and the
value of new business.
Headline return on equity for the year to 30 June 2005 was 25% (2004: 24%).
Insurance operations
Momentum`s consistent earnings growth was characterised by increased acquisition
activity as it sought to capitalise on consolidation opportunities in its chosen
markets, and strong organic growth in all areas of the business. Top line growth
in new product sales benefited from the enlarged Momentum agency force, the
launch of innovative new products, and Momentum`s ability to successfully
maintain market share in the fiercely competitive independent broker market.
Momentum concluded the following strategic acquisitions during the year:
* It participated in the formation of Advantage Asset Managers (50% interest)
- a multimanager with a total of R39 billion in assets; and
* The acquisition of Sovereign Health - a medical schemes administrator with
a total of 106 000 principal members.
Subsequent to the year-end, the consolidation process accelerated with the
following transactions being announced by Momentum:
* Acquisition of Sage Holdings - Momentum acquired 100% of the Sage Group for
a consideration of R634 million. The acquisition increases Momentum`s
policy book by 25%, and adds an additional 590 agents to Momentum`s current
agency force; and
* Disposal of African Life and acquisition of African Life Health - in line
with Momentum`s strategy to reach the lower and middle end of the market
through the established FNB branch network, rather than through a
traditional insurance distribution model, Momentum recently announced that
it has agreed to dispose of its 34%-shareholding in African Life for R696
million. Momentum has separately made an offer to acquire a 100% interest
in African Life Health, a medical schemes administrator, from African Life.
Both of these transactions remain subject to a number of approval
processes.
Asset management operations
Momentum`s asset management operations comprise the retail and institutional
asset management operations of RMB Asset Management, RMB Properties, 87% of
Ashburton and 40% of Futuregrowth.
The asset management operations generated an excellent increase in net profit
after tax of 41% to R247 million. This was largely due to a combination of the
positive impact of good market growth on fee income and positive net inflows of
funds in both the institutional and collective investment business. The total
funds managed by the asset management operations increased by 20% to R180
billion.
Discovery Group
Discovery produced a strong performance reflecting a combination of good organic
growth and increased efficiencies across all its businesses. This performance
translated into a 32% increase in headline earnings to R350 million (2004: R265
million).
Discovery Health produced a solid but moderate performance with operating
profits increasing by 8%. This follows a significant increase in acquisition
costs coupled with the regulated termination of reinsurance profits.
Discovery Life exceeded expectations, further consolidating its leadership
position within the pure risk assurance market and increasing operating profits
by 55% to R421 million (2004: R271 million). This exceptional performance
resulted from significant new business growth.
US based Destiny Health`s operating losses reduced by 18% to R87 million. The
maiden profits in January and February 2005 were offset by transitional cost
incurred from moving the back-office operations from the USA to South Africa. UK
based Prudential Health required an investment of R276 million to meet its
capital requirements. Start-up operating losses to date equates to R148 million.
DIRECTLY HELD INSURANCE INTERESTS
RMB Structured Insurance
RMBSI reported an excellent 34% increase in headline earnings, which amounted to
R54,1 million (2004: R40,3 million).
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 booming retail sector activity) and an improved yield on its investment
portfolio.
During the last quarter of the financial year RMBSI entered into a BEE
transaction with the New Seasons Investment group, who will ultimately hold a
15% interest in RMBSI. This structured ownership transaction was funded from
internal resources within the greater RMBH group.
RMBSI has proposed a dividend for the year of R26 million (2004: R20 million).
RMBH`s attributable share of RMBSI`s headline earnings for the year amounted to
R51,3 million (2004: R41,0 million).
OUTsurance
OUTsurance continues to grow and perform extremely well. It has become an
established and trusted brand in a relatively short space of time. OUTsurance
posted exceptional results for the year, with:
* Gross premium income equalling R1,9 billion, a 30% increase; while
* Underwriting profits rose by 49% to R320 million (largely as a result of a
lower expense ratio, which declined from 18% to 16%); and
* Headline earnings increased by 46% to R297 million (2004: R203 million).
These results were driven by strong organic growth in both the personal lines
and business operations. Lower crime related claims also contributed to this
outcome. Collaboration with the FirstRand group during the past financial year
has been particularly successful, with 29% of OUTsurance`s premium income being
sourced through FirstRand.
At the year-end the group had total assets of R1,8 billion with a solvency
margin of 44%.
Following last year`s maiden dividend of R150 million, OUTsurance has declared a
dividend for the year of R210 million, representing a 40% increase.
RMBH`s attributable share of OUTsurance`s headline earnings for the year
amounted to R193,5 million (2004: R136,0 million).
OTHER FINANCIAL SERVICES INTERESTS
Glenrand M.I.B
Glenrand M.I.B experienced a challenging year with headline earnings declining
to R28,7 million (2004: R72,7 million). This outcome was largely the result of a
lack of revenue growth in certain business areas as well as the unusual cyclical
concurrence of declining interest rates and softening short-term insurance
rates.
An increase in expenses needed to overcome performance shortcomings in the
Benefit Services business and a conservative review of the carrying value of all
assets are unlikely to re-occur. Given the once off nature of such items and the
inherent strength of the group`s Risk Advisory Services business, Glenrand M.I.B
is expected to achieve significant growth in headline earnings in the 2006
financial year.
RMBH`s share of headline earnings from Glenrand M.I.B amounted to R4,9 million
(2004: R13,0 million).
GROUP CAPITAL POSITION
The market value of RMBH`s underlying investments has shown a significant
increase in value over the last year and may be summarised as follows:
As at 30 June
Rm 2005 2004 % change
Market value of listed interests 23 143 18 353 26
(FirstRand, Glenrand M.I.B)
Directors` valuation unlisted 1 726 1 233 40
interests (OUTsurance, RMBSI)
Net cash resources 1 950 478 >100
Total intrinsic value 26 819 20 064 34
Per RMBH share (cents) 2,258c 1,689c 34
At 30 June 2005 RMBH`s market capitalisation amounted to R26,42 billion or 2,225
cents per share (2004: R19,18 billion) representing a 1% discount (2004: 4%) to
the group`s underlying intrinsic value.
All of the RMBH group`s investments are adequately capitalised at present. RMBH
itself has no material funding obligations and had net cash resources at year
end of some R1,95 billion. RMBH constantly evaluates possible additions to its
portfolio of investments. None of the projects currently under consideration
have reached a stage of development where their capital requirements can be
crystallised. However, the Board believes that the group`s existing capital is
adequate to support most projects upon which it may choose to embark.
Consequently, the Board has resolved to return R1,19 billion of the surplus cash
resources to shareholders. The balance remaining will be applied within the
group.
Extra-ordinary cash distribution to shareholders
The RMBH Board has approved a reduction of the Company`s share capital, subject
to the approval of RMBH shareholders in general meeting, by repaying to
shareholders an amount of R1,19 billion, equivalent to 100 cents per share from
the Company`s share premium account.
A circular setting out further details and giving notice of the meeting will be
posted to shareholders on or about 28 September 2005. Should shareholders
approve the proposed repayment of share premium it is anticipated that the
payment will be made to shareholders by middle November 2005.
Dividend payment
The Board has resolved to declare a final dividend of 52,0 cents per share
(2004: 52,0 cents).
Such final dividend, together with the interim dividend of 42,0 cents brings the
total dividends for the year ended 30 June 2005 to 94,0 cents (2004: 77,5
cents). This represents a year-on-year increase of 21% and a dividend cover
ratio (on headline earnings) of 2,5 times (2004: 2,3 times), in line with that
of its major investments.
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.
RMBH supports broad-based and genuine empowerment and transformation in all of
the sectors in which we operate. All companies within the greater group are
proactively working towards achieving the targets envisaged in the Financial
Sector Charter.
OUTLOOK FOR THE GROUP
The increased economic activity experienced in South Africa during the year
ended 30 June 2005 is expected to continue.
At FirstRand:
* Interest rates are expected to remain at current levels for the next
financial year. Whilst the lower interest rate environment will continue to
place banking margins under pressure, it is also expected to positively
impact credit demand and consumer spending albeit at a slower rate than
what was experienced during this financial year.
* Although the investment market performance during 2005 is unlikely to be
repeated, Momentum remains positive regarding the impact of its
acquisitions and innovative products on new business volumes. Efficiency
improvements should continue, both locally and offshore.
RMBH`s other interests are each unique in their own abilities and also stand
poised to extract further value from their identified niches.
Barring any unforeseen external shocks and in the context of the current strong
economic growth in South Africa, we believe that the existing strategies of the
Group and diversified income streams generated from the underlying business
units, will ensure that the Group is well positioned to achieve its stated
objective of 10% real growth.
For and on behalf of the Board
GT Ferreira P Cooper
Chairman Chief Operating Officer
Sandton
21 September 2005
DIVIDEND DECLARATION
Notice is hereby given that a final dividend of 52,0 cents per share was
declared on 21 September 2005 in respect of the financial year ended 30 June
2005.
Shareholders` attention is drawn to the following important dates:
* Last day to trade in order to 14 October 2005
participate in this dividend
Friday,
* Shares commence trading `ex Monday,17 October 2005
dividend` on
* The record date for the dividend Friday, 21 October 2005
payment will be
* Dividend payment date Monday, 24 October 2005
No dematerialisation or rematerialisation of share certificates may be done
between Monday, 17 October 2005 and Friday, 21 October 2005 (both days
inclusive).
By order of the Board
AH Arnott
Company Secretary
21 September 2005
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; while
* RMBH`s proportionate interest in its associates, FirstRand and Glenrand
M.I.B has been equity accounted.
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 Limited (the `JSE`).
The accounting policies of the RMBH group comply with South African 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 2004, except for the adoption of
AC140 `Business Combinations` and the application of AC501 `Accounting for
Secondary Tax on Companies`.
AC140 requires that goodwill acquired in a business combination be measured,
after initial recognition, at cost less any accumulated impairment losses.
Consequently, goodwill is not amortised but instead must be tested for
impairment annually, or more frequently, if events or changes in circumstances
indicate that it might be impaired. At 30 June 2005 there was no evidence of any
impairment of goodwill acquired. Attributable earnings for the comparative year
ended 30 June 2004 includes amortisation of goodwill.
Interpretation note AC501 requires an entity to recognise a deferred tax asset
to the extent that it is probable that the entity will declare dividends against
which STC credits can be utilised.
AC501 has been applied retrospectively from 1 July 2004 and consequently the
2004 results have been restated. For 2005 the impact of the application of the
interpretation note is to decrease headline and attributable earnings by R3,0
million.
Shareholders are referred to the summary where the impact of these changes in
accounting policy are quantified.
Impact of FirstRand BEE transaction
FirstRand implemented a BEE ownership transaction during the last quarter of the
financial year. In terms of this transaction, all shareholders were required to
offer 7,6% of their interest in the company to the BEE participants. As a
consequence, RMBH`s effective interest in FirstRand declined to 32% (2004: 34%).
In return, for the shares offered by it, RMBH received a cash consideration of
R1,7 billion.
For the year under review, the headline earnings impact of the transaction is
not material. However, RMBH realised a non-recurring profit on the sale of the
shares in FirstRand of R586 million. While not included in the computation of
headline earnings, the gross impact thereof is included in operating profit for
the 2005 financial year and contributes to the doubling of operating profit when
compared to the prior year. Similarly, it also contributes to the
70% year-on-year increase in RMBH`s attributable earnings while headline
earnings which excludes this amount, increased by 30%.
Adoption of International Financial Reporting Standards
The group will adopt International Reporting Standards (`IFRS`) with effect from
1 July 2005. While the impact of this change is currently being quantified, it
is anticipated that it may result in greater volatility in reported earnings.
The effect of the transition to IFRS will be disclosed in the interim results
for the six months ending on 31 December 2005 and in the annual report for the
year ended 30 June 2006.
SUMMARISED GROUP INCOME STATEMENT
For the year ended 30 June 2005 2004 %
Rm Audited Audited change
Operating profit 1 117 542 >100
Net finance income/(costs) 45 (1) >100
Profit before tax 1 162 541 >100
Taxation (205) (127) (61)
Operating profit after tax 957 414 >100
Share of after tax results of 2 669 1 952 37
associate companies
Earnings attributable to 3 626 2 366 53
shareholders before goodwill
amortisation
Net goodwill amortised - (225) -
Earnings attributable to outside (110) (77) (43)
shareholders
Earnings attributable to ordinary 3 516 2 064 70
shareholders
Computation of headline earnings:
Earnings attributable to ordinary 3 516 2 064 70
shareholders
Adjustment for:
Net goodwill amortised - 225 -
Profit on sale of interest in
Global Resorts - (161) -
Profit on sale of partial (586) - -
interest in FirstRand
Other - (11) -
Share of adjustment made by
associates:
Goodwill amortised or impaired 3 57 (95)
Realised profit on sale of (28) (34) 18
available-for-sale assets
Profit on sale of subsidiary (118) - -
Other 3 5 (40)
Headline earnings attributable to 2 790 2 145 30
ordinary shareholders
COMPUTATION OF EARNINGS PER SHARE
For the year ended 30 June 2005 2004 %
Rm Audited Audited change
Number of shares in issue 1 188 1 188
(millions)
Weighted average number of shares 1 188 1 188
in issue (millions)
Earnings per share (cents) 296,0 173,7 70
Diluted earnings per share 291,6 169,8 72
(cents)
Headline earnings per share 234,9 180,6 30
(cents)
Diluted headline earnings per 230,7 176,6 31
share (cents)
Dividend per share (cents)
Interim 42,0 25,5 65
Final 52,0 52,0 -
Total 94,0 77,5 21
Dividend cover (relative to 2,5 2,3
headline earnings)
SOURCES OF HEADLINE EARNINGS
For the year ended 30 June 2005 2004 %
Rm Audited Audited change
Headline earnings from:
FirstRand 2 524 1 946 30
Glenrand M.I.B 5 13 (62)
OUTsurance 194 136 43
RMB Structured Insurance 51 41 24
2 774 2 136 30
RMBH and other 16 9 78
Headline earnings 2 790 2 145 30
RESTATEMENT OF PRIOR YEAR NUMBERS
As
As originally Differ-
restated stated ence Reason
Balance sheet item
Cash and cash 2 257 2 163 94 Listed bonds
equivalents reclassified
as cash and
cash
equivalents
Investments 2 134 2 228 (94) Listed bonds
reclassified
as cash and
cash
equivalents
Accounts 349 339 10 Recognition of
receivable deferred tax
asset for STC
Investment in 8 177 8 142 35 Recognition of
associate deferred tax
companies asset for STC
Accounts 936 940 (4) Reinsurers`
payable and share of
accruals unearned
premiums
reclassified
Short-term 1 922 1 918 4 Reinsurers`
insurance share of
provisions unearned
premiums
reclassified
Reserves 6 772 6 727 45 Recognition of
deferred tax
asset for STC
Income statement item
Taxation (127) (120) (7) Recognition of
deferred tax
asset for STC
Share of 1 952 1 939 13 Recognition of
after tax deferred tax
results of asset for STC
associate
companies
SUMMARISED GROUP BALANCE SHEET
at 30 June 2005 2004
Rm Audited Audited
ASSETS
Cash and cash equivalents 4 298 2 257
Investments 2 117 2 134
Accounts receivable 652 349
Reinsurers` share of insurance 47 13
provisions
7 114 4 753
Investment in associate companies 8 539 8 177
Property and equipment 107 109
Goodwill and other intangible asset 3 783 3 359
Total assets 19 543 16 398
LIABILITIES AND SHAREHOLDERS` FUNDS
Funding instruments 228 230
Accounts payable and accruals 970 936
Intangible asset related liability 13 -
Short-term insurance provisions 2 376 1 922
Liabilities to policyholders 714 536
4 301 3 624
Outside shareholders` interest 313 209
Shareholders` funds
Share capital and premium 5 793 5 793
Reserves 9 136 6 772
Total shareholders` funds 14 929 12 565
Total liabilities and shareholders` 19 543 16 398
funds
SUMMARISED GROUP CASH FLOW STATEMENT
For the year ended 30 June 2005 2004
Rm Audited Audited
Cash available from operating 1 516 1 559
activities
Cash flows for servicing of finance (1 117) (745)
from shareholders
Cash flows from investment activities 1 725 143
Cash flows from financing activities (76) (128)
Net increase in cash and cash 2 048 829
equivalents
Unrealised foreign currency translation (7) (26)
adjustments included in cash and cash
equivalents
Cash and cash equivalents at the 2 257 1 454
beginning of the period
Cash and cash equivalents at the end of 4 298 2 257
the period
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 2003 12 5 781 4 357
(audited) as previously
reported
Adoption of AC501 - Secondary - - -
Tax on Companies
Restatements by associates:
Adoption of AC501 - Secondary - - 23
Tax on Companies
Restated balance at 30 June 12 5 781 4 380
2003 (audited)
Earnings attributable to - - -
ordinary shareholders
Dividend paid - - -
Income of associated - - 960
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 - - (88)
currency translation reserves
- Movement in revaluation - - (69)
reserves
- Consolidation of share - - 26
trust
- Movement in other reserves - - 23
Restated balance at 30 June 12 5 781 5 232
2004 (audited)
Earnings attributable to - - -
ordinary shareholders
Dividend paid - - -
Income of associated - - 1 225
companies retained
Transfers relating to
subsidiaries:
- Transfer to contingency - - -
reserve by short-term
insurance operations
- Transfer to non- - - -
distributable reserve
- Decrease in reserves due to - - -
dilution in holding
Transfers relating to
associates:
- Movement on foreign - - (120)
currency translation reserves
- Movement in revaluation - - 156
reserves
- Decrease in reserves due to - - (22)
dilution in holding
- Consolidation of share - - 2
trust
- Movement in other reserves - - (48)
Balance at 30 June 2005 12 5 781 6 425
(audited)
SUMMARISED STATEMENT OF CHANGES IN EQUITY
Non-
distri-
butable Retained Total
Rm reserves earnings equity
Balance at 30 June 2003 364 779 11 293
(audited) as previously
reported
Adoption of AC501 - Secondary - 17 17
Tax on Companies
Restatements by associates:
Adoption of AC501 - Secondary - - 23
Tax on Companies
Restated balance at 30 June 364 796 11 333
2003 (audited)
Earnings attributable to - 2 064 2 064
ordinary shareholders
Dividend paid - (745) (745)
Income of associated - (960) -
companies retained
Transfers relating to
subsidiaries:
- Transfer to contingency 29 (29) -
reserve by short-term
insurance operations
- Investment reserve relating 21 - 21
to short-term insurance
operations
Transfers relating to
associates:
- Movement on foreign - - (88)
currency translation reserves
- Movement in revaluation - - (69)
reserves
- Consolidation of share - - 26
trust
- Movement in other reserves - - 23
Restated balance at 30 June 414 1 126 12 565
2004 (audited)
Earnings attributable to - 3 516 3 516
ordinary shareholders
Dividend paid - (1 117) (1 117)
Income of associated - (1 225) -
companies retained
Transfers relating to
subsidiaries:
- Transfer to contingency 20 (20) -
reserve by short-term
insurance operations
- Transfer to non- 27 (27) -
distributable reserve
- Decrease in reserves due to (3) - (3)
dilution in holding
Transfers relating to
associates:
- Movement on foreign - - (120)
currency translation reserves
- Movement in revaluation - - 156
reserves
- Decrease in reserves due to - - (22)
dilution in holding
- Consolidation of share - - 2
trust
- Movement in other reserves - - (48)
Balance at 30 June 2005 458 2 253 14 929
(audited)
RMB HOLDINGS LIMITED (`RMBH`)
Registration number: 1987/005115/06
Share code: RMH
ISIN code: 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)
4th 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 8088
Web address: www.rmbh.co.za
Sponsor
(in terms of JSE Listing Requirements),
Rand Merchant Bank (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, 2nd Floor, Edura House, 41
Fox Street, Johannesburg, 2001
Postal address: PO Box 61051, Marshalltown, 2107
Telephone: +27 11 836 7700
Telefax: +27 11 836 0792
Web address: www.rmbh.co.za
Date: 21/09/2005 02:59:44 PM
Produced by the JSE SENS Department
