| Thu 2 Mar 2006, 9:19 | | Glenrand MIB Interim Results Announced |
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GMB
GMB
Glenrand MIB Interim Results Announced
Glenrand M I B Limited
Incorporated in the Republic of South Africa
(Registration number 1997/008001/06)
JSE share code GMB & ISIN ZAE000018529
("Glenrand MIB" or "the Group")
Insurance broking and benefit consulting group Glenrand MIB reported a 60%
increase in profits from continuing operations for the six months ended 31
December 2005.
After-tax profit for the period was R21,8 million, a 57% increase over the
adjusted R13,9 million recorded for the comparable period in 2004.
After-tax profits from continuing operations were R17,2 million, a 60% increase
over the R10,8 million for the 2004 interim period.
Headline earnings per share for the period were 8,1 cents (2004: 9,6 cents),
while earnings per share were 5,9 cents (2004: 3,3 cents).
Cash generated from operations was slightly down for the period, and there was a
sharp increase in working capital movements, due largely to the timing of policy
renewals. Headline earnings of R19.5 million included a R4,98 million write-back
of intangibles previously written off to the income statement.
Risk Advisory Services
Risk Services
CEO Steve von Roretz says the Risk Services business performed well in an
increasingly competitive market, with a R6m increase in revenue, offset by a
reduction in revenue of R3,8m in Reinsurance Consultants. "Some 40% of the Risk
Services business"s revenues are fee-based, and the balance from commission,"
says von Roretz. "While the commission income is where we are feeling most of
the competitive pressure, we continued to hold our own in this market."
Glenrand MIB Risk Services includes approximately one-third of the Top 100
corporates among its clients, as well as a quality share of both the commercial
and personal insurance broking markets. Glenand MIB is the leading insurance
broker in specialist liability and construction insurance.
Reinsurance
During the period the group disposed of the Reinsurance Consultants and
Intermediaries division as a result of the need for international intellectual
capital and global reach in this business.
Von Roretz says, "Over the last six month financial period we have been focusing
on new business and new revenue streams in certain areas of the Risk Advisory
business and this is starting to yield benefits which will be apparent in the
second half of the financial year."
Benefit Services
Benefit Services reported a R10,7 million loss for the period (2004: R6.1
million). Despite the loss, the division is showing the expected turnaround in
performance not yet evident in the results. Most of the legacy issues arising
from integrating seven information technology platforms into one are being
addressed, and the quality of management information flowing through has
improved the quality of management decision-making. The division posted revenue
of R49,6 million for the period (2004: 43,8 million), and the target is to more
than double this for the full year. The focus over the last six months has been
to stabilise the business base and build a platform for growth going forward.
"Benefit Services still suffers from a lack of critical mass, and we need to
significantly increase the members under administration from its current 80
000," says von Roretz. "New business gains have been hamstrung by legacy issues,
lower than expected sales performance and the need to bring in black economic
empowerment partners. All of these issues are being addressed. We are also
looking at the possibility of bringing in partners through acquisition and to
build critical mass in the business. We remain confident that Benefit Services
is moving forward positively and a number of options are being explored to
unlock the full potential of this business."
Dividends
Following the sale of the reinsurance business, effective 31 January 2006, the
group has decided to distribute a special dividend of 16 cents a share to
shareholders, in addition to an interim dividend of 4 cents.
Outlook
Looking forward to the second half of the year, von Roretz says the group"s Risk
Advisory business is benefiting from the robust domestic economy, although this
is offset by softer insurance rates. Although it was expected that there would
be a return to profitability in the Benefit Services division in the year to
2006, this is now unlikely. However, it is still expected that there wil be a
substantial reduction in the losses of 2005.
The group is confident of achieving a significant improvement in headline
earnings per share for the full year over the restated 7,6 cents achieved in
June 2005.
BEE Transaction
"An exciting development is the anticipated shareholder approval which will be
sought on 17th March 2006, which will significantly reposition us in the
market", says von Roretz.
Ends
About Glenrand M.I.B
Glenrand M.I.B. is a leading South African insurance broker and employee
benefits consultant. The company was formed out of the merger of Glenrand and
MIB and was listed on the JSE Securities Exchange SA in 1998.
ISSUED FOR: GLENRAND M.I.B LIMITED
CONTACT: Steve von Roretz, CEO: 011 329 1427 / 083
326 6319
FAX NO: 011 293 2755
E-MAIL: svonroretz@glenrandmib.co.za
WEBSITE: www.glenrandmib.co.za
ISSUED BY: TISH STEWART PR ASSOCIATES
CONTACT: Tish Stewart: 011 325 4195 / 082 443 6399
FAX NO: 011 325 4199
E-MAIL: tish@tspr.co.za
DATE: 1 March 2006
Date: 02/03/2006 09:19:03 AM Produced by the JSE SENS Department
