Ecclesiastl.8fe Regulatory News (ELLA)

26 Mar 2008 16:28

Ecclesiastical Insurance Office PLC26 March 2008 ECCLESIASTICAL INSURANCE OFFICE PLC PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THEYEAR ENDED 31 DECEMBER 2007 Gross written premiums from general and long term business operations amountedto £386.9m (2006: £403.3m). After adjusting for the one-off effect of thetransfer of in-force life business from the National Association of FuneralDirectors of £25.6 million in 2006, this represents growth of 2%. Our investments performed excellently in what was a very unsettled year, withglobal equity markets affected by the credit and liquidity crisis whichoriginated in the US. Despite this, economic growth in developing economiesremained robust, and overall most major stock markets provided positive returnsfor investors. The total net investment return (including investment income andnet fair value movements) was £69.4m (2006: £94.0m). Group profit before tax was £35.6m, compared with £77.1m in 2006. General business operations contributed £39.5m (2006: £71.5m) to this resultwith a combined operating ratio of 102.9% (2006: 88.5%). The long term business result was adversely impacted by changes to mortality andother assumptions, contributing to a loss of £4.3m (£3.5m profit in 2006). Other operations, which include the results of activities that are not relatedto core business segments, contributed £0.4m (2006: £2.1m) to group profitbefore tax. Profit after taxation amounted to £26.3m (2006: £54.6m). Our total grants to Allchurches Trust, the ultimate parent of the group,amounted to £12.7m (2006: £8.0m) in the year. Shareholders' funds grew to£362.1m (2006: £345.0m). During 2007, Standard & Poor's Rating Services improved the outlook for thecompany's long term counterparty credit and insurer financial strength rating toA- 'positive' from A- 'stable', whilst A. M. Best reaffirmed their rating of A. The Directors recognise the increased levels of competition in general insurancewhich are likely to be reflected in the results for the current year, but remainconfident about the prospects in the longer term. Michael TrippGroup Chief Executive CONSOLIDATED INCOME STATEMENTFor the year ended 31 December 2007 2007 2006 £000 £000 Gross written premiums 386,915 403,316Outward reinsurance premiums (132,094) (121,093)Net change in provision for unearned premiums (1,183) (4,170) ------------ ------------Net earned premiums 253,638 278,053Fee and commission income 37,990 35,762Net investment return 69,396 94,043 ------------ ------------Total revenue 361,024 407,858 ------------ ------------ Claims and change in insurance liabilities (267,833) (231,965)Reinsurance recoveries 73,357 50,118Fees, commissions and other acquisition costs (70,563) (69,503)Other operating and administrative expenses (56,986) (53,664)Change in provisions for investment contract liabilities 265 (8,865)Change in net asset value attributable to unitholders (1,097) (7,828) ------------ ------------Total operating expenses (322,857) (321,707) ------------ ------------ Operating profit 38,167 86,151Finance costs (832) (641)Transfers to the unallocated divisible surplus (1,731) (8,399) ------------ ------------Profit before tax 35,604 77,111United Kingdom tax expense (7,566) (20,140)Overseas tax expense (1,782) (2,402) ------------ ------------Profit attributable to equity holders of the parent 26,256 54,569 ------------ ------------ CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEFor the year ended 31 December 2007 2007 2006 £000 £000 Net fair value (losses)/gains on property (39) 559Gain/(loss) on currency translation differences 5,996 (4,316) ------------ ------------Net income/(expense) recognised directly in equity 5,957 (3,757)Profit for the year after tax 26,256 54,569 ------------ ------------Total recognised income and expense for the year 32,213 50,812 ------------ ------------ CONSOLIDATED BALANCE SHEETAt 31 December 2007 2007 2006 £000 £000 AssetsGoodwill and other intangible assets 4,807 5,396Deferred acquisition costs 31,751 29,477Deferred tax assets 2,755 2,220Pension assets 21,276 18,281Property, plant and equipment 10,522 10,533Investment property 33,558 36,207Financial investments 972,792 877,346Reinsurers' share of contract provisions 189,259 160,773Current tax recoverable 3,012 206Other assets 105,249 85,539Cash and cash equivalents 181,003 234,425 ------------ ------------Total assets 1,555,984 1,460,403 ------------ ------------ EquityShare capital 80,477 80,477Share premium account 4,632 4,632Retained earnings and other reserves 276,942 259,900 ------------ ------------Total shareholders' equity 362,051 345,009 ------------ ------------ LiabilitiesInsurance contract provisions 909,469 830,386Investment contract liabilities 54,919 56,214Unallocated divisible surplus 39,836 38,105Finance lease obligations 1,607 1,695Provisions for other liabilities and 8,207 6,671chargesRetirement benefit obligations 11,452 8,506Deferred tax liabilities 47,677 50,077Current tax liabilities 1,807 4,984Deferred income 16,662 15,140Other liabilities 33,307 41,596Net asset value attributable to 68,990 62,020unitholders ------------ ------------Total liabilities 1,193,933 1,115,394 ------------ ------------ ------------ ------------Total shareholders' equity and liabilities 1,555,984 1,460,403 ------------ ------------ CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 December 2007 2007 2006 £000 £000 Net cash from operating activities 35,862 112,340 Cash flows from investing activitiesPurchases of property, plant and equipment (1,609) (2,333)Proceeds from the sale of property, plant and equipment 75 86Purchases of intangible assets (573) (2,062)Acquisition of subsidiary, net of cash acquired (905) -Purchases of financial investments and investment (339,961) (276,745)propertySale of financial investments and investment property 280,507 246,463 ------------ ------------Net cash used by investing activities (62,466) (34,591) ------------ ------------ Cash flows from financing activitiesNet proceeds from the issue of shares - 4,340Payment of finance lease liabilities (396) (444)Repayment of other borrowings (8,750) -Dividends paid to company's shareholders (6,281) (6,463)Donations paid to ultimate parent undertaking (15,500) (5,200) ------------ ------------Net cash used by financing activities (30,927) (7,767) ------------ ------------ ------------ ------------Net (decrease)/increase in cash and cash equivalents (57,531) 69,982 ------------ ------------ Cash and cash equivalents at beginning of year 234,425 169,301Exchange gains/(losses) on cash and cash equivalents 4,109 (4,858) ------------ ------------Cash and cash equivalents at end of year 181,003 234,425 ------------ ------------ NOTES TO THE PRELIMINARY ANNOUNCEMENT OF RESULTSFor the year ended 31 December 2007 1. Basis of preparation The company has prepared this preliminary announcement using the same accountingpolicies and methods of computation as the full financial statements for theyears ended 31 December 2006 and 31 December 2007 as prepared underInternational Financial Reporting Standards (IFRS). 2. Dividends 2007 2006 £000 £000 Ordinary • interim declared and paid 0.392p per share 550 500 (2006: 0.356p per share) 8.625 per cent Non-Cumulative Irredeemable Preference • paid in the year 5,731 5,553 The directors do not recommend a final dividend on the ordinary shares for theyear ended 31 December 2007 (2006: £nil). 3. Statement of changes in equity 2007 2006 £000 £000 Opening shareholders' equity 345,009 301,510 Total recognised income and expense for the year 32,213 50,812 Dividends payable (6,281) (6,053) Net charitable grant to ultimate parent undertaking (8,890) (5,600) Net proceeds from the issue of shares - 4,340 --------- -------- Closing shareholders' equity 362,051 345,009 --------- -------- 4. General information The financial information set out above does not constitute the company'sstatutory accounts for the year ended 31 December 2007 or 2006. Whilst the financial information included in this preliminary announcement hasbeen computed in accordance with International Financial Reporting Standards(IFRS), this announcement does not itself contain sufficient information tocomply with IFRS. Full financial statements that comply with IFRS were approvedby the Board of Directors on 26 March 2008 and are expected to be published inApril 2008. The statutory accounts for 2007 will be delivered to the Registrar of Companiesshortly. The auditors have reported in accordance with s.235 of the Companies Act 1985 onthe statutory accounts for 2006 and 2007; their reports were unqualified and didnot contain statements under s.237(2) or (3) of the Companies Act 1985. This announcement was approved at a meeting of the Board of Directors held on 26March 2008. Ecclesiastical Insurance Office plc is a subsidiary of Ecclesiastical InsuranceGroup plc which is an investment holding company whose ordinary shares are notlisted. The ordinary shares of Ecclesiastical Insurance Office plc are not listed. Copies of the audited financial statements are available from the secretary. This information is provided by RNS The company news service from the London Stock Exchange