Ecclesiastl.8fe Regulatory News (ELLA)

21 Mar 2007 17:05

Ecclesiastical Insurance Office PLC21 March 2007 ECCLESIASTICAL INSURANCE OFFICE PLC PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006 Gross written premiums from general and long term business operations amounted to £403.3m (2005: £361.7m).Within the total, general insurance written premiums have increased by 3.4%, compared with an increase of 0.8%in 2005. Premium growth was constrained by an intensified competitive environment and the effect of plannedreductions in business from the transformation programme being implemented in Canada and the run-off fromagencies in the Mediterranean. Gross written premiums from long term operations increased by £30.0m, mainly asa result of the successful transfer of funds to secure existing funeral plan business sold through theNational Association of Funeral Directors. The total net investment return (including investment income and net fair value movements) was £94.0m, 13%down on 2005. Progression of global equity markets followed an erratic pattern but the year ended withpositive capital returns, tempered by rising interest rates in the UK. Group profit before tax was £77.1m, compared with the record profit of £101.1m in 2005. General business operations contributed £71.5m (£92.6m) to this result. Underwriting profits were £27.0m(£38.3m). Profit before tax from long term business amounted to £3.5m, (£6.5m) after allowing for £2.2m in reservestrengthening. Other operations, which include the results of activities that are not related to core business segments,contributed £2.1m (£2.0m) to group profit before tax. Profit after taxation amounted to £54.6m (£72.0m). Continued positive financial performance enabled the Board to approve a 6% increase in the annual grant, inrespect of 2006, to Allchurches Trust, the ultimate parent of the group. In light of the excellent resultsover the last three years, additional grants totalling £9.1m were made to Allchurches Trust. Shareholders'funds grew to £345.0m (£301.5m). During 2006, Standard & Poor's Rating Services reaffirmed the company's long term counterparty credit andinsurer financial strength rating of A-, whilst A. M. Best raised their rating from A- to A. The Directors recognise the increased levels of competition in general insurance which are likely to bereflected in the results for the current year, but remain optimistic about the prospects in the longer term. Michael Tripp Group Chief Executive-------------------------------------------------------------------------------------------------------------- CONSOLIDATED INCOME STATEMENTFor the year ended 31 December 2006 2006 2005 £000 £000 Net earned premiums 278,053 241,509Fees and commission income 35,762 38,279Net investment return 94,043 108,564 ------------ ------------Total revenue 407,858 388,352 ------------ ------------ Claims and change in insurance liabilities (231,965) (180,252)Reinsurance recoveries 50,118 36,537Fees, commissions and other acquisition costs (69,503) (66,230)Other operating and administrative expenses (53,664) (46,699)Change in provisions for investment contract liabilities (8,865) (6,992)Change in net asset value attributable to unitholders (7,828) (7,340) ------------ ------------Total operating expenses (321,707) (270,976) ------------ ------------ Operating profit 86,151 117,376Finance costs (641) (765)Transfers to the unallocated divisible surplus (8,399) (15,541) ------------ ------------Profit before tax 77,111 101,070United Kingdom tax expense (20,140) (26,234)Overseas tax expense (2,402) (2,827) ------------ ------------Profit attributable to equity holders of the parent 54,569 72,009 ------------ ------------ CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEFor the year ended 31 December 2006 2006 2005 £000 £000 Net fair value gains on property 559 83(Loss)/gain on currency translation differences (4,316) 3,769 ------------ ------------Net (expense)/income recognised directly in equity (3,757) 3,852Profit for the year after tax 54,569 72,009 ------------ ------------Total recognised income and expense for the year 50,812 75,861 ------------ ------------ CONSOLIDATED BALANCE SHEETAt 31 December 2006 2006 2005 £000 £000 AssetsGoodwill and other intangible assets 5,396 4,710Deferred acquisition costs 29,477 29,121Deferred tax assets 2,220 1,480Pension assets 18,281 17,316Property, plant and equipment 10,533 9,047Investment property 36,207 29,959Financial investments 877,346 814,945Reinsurers' share of contract provisions 160,773 150,553Current tax recoverable 206 1,129Other assets 85,539 79,252Cash and cash equivalents 234,425 169,301 ------------ ------------Total assets 1,460,403 1,306,813 ------------ ------------ EquityShare capital 80,477 76,977Share premium account 4,632 3,792Retained earnings and other reserves 259,900 220,741 ------------ ------------Total shareholders' equity 345,009 301,510 ------------ ------------ LiabilitiesInsurance contract provisions 830,386 768,639Investment contract liabilities 56,214 48,846Unallocated divisible surplus 38,105 29,706Finance lease obligations 1,695 1,573Provisions for other liabilities and 6,671 5,422chargesRetirement benefit obligations 8,506 7,103Deferred tax liabilities 50,077 42,259Current tax liabilities 4,984 7,607Deferred income 15,140 15,187Other liabilities 41,596 30,088Net asset value attributable to 62,020 48,873unitholders ------------ ------------Total liabilities 1,115,394 1,005,303 ------------ ------------ ------------ ------------Total shareholders' equity and liabilities 1,460,403 1,306,813 ------------ ------------ CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 December 2006 2006 2005 £000 £000 Net cash from operating activities 112,340 69,614 Cash flows from investing activitiesPurchases of property, plant and equipment (2,333) (2,990)Proceeds from the sale of property, plant and equipment 86 75Purchases of intangible assets (2,062) (1,283)Purchases of financial investments and investment (276,745) (268,445)propertySale of financial investments and investment property 246,463 187,815 ------------ ------------Net cash used by investing activities (34,591) (84,828) ------------ ------------ Cash flows from financing activitiesNet proceeds from the issue of shares 4,340 22,440Payment of finance lease liabilities (444) (429)Repayment of other borrowings - (3)Dividends paid to company's shareholders (6,463) (4,797)Donations paid to ultimate parent undertaking (5,200) (8,250) ------------ ------------Net cash (used by)/from financing activities (7,767) 8,961 ------------ ------------ ------------ ------------Net increase/(decrease) in cash and cash equivalents 69,982 (6,253) ------------ ------------ Cash and cash equivalents at beginning of year 169,301 172,193Exchange (losses)/gains on cash and cash equivalents (4,858) 3,361 ------------ ------------Cash and cash equivalents at end of year 234,425 169,301 NOTES TO THE PRELIMINARY ANNOUNCEMENT OF RESULTSFor the year ended 31 December 2006 1. Basis of preparation The company has prepared this preliminary announcement using the same accounting policies and methods ofcomputation as the full financial statements for the years ended 31 December 2005 and 31 December 2006 asprepared under International Financial Reporting Standards (IFRS). 2. Dividends 2006 2005 £000 £000 Ordinary • interim declared 0.292p per share (2005: 0.292p 500 410 per share) 10 per cent Redeemable Second Cumulative Preference • paid in the year - 150 8.625 per cent Non-Cumulative Irredeemable Preference • paid in the year 5,553 4797 On 27 July 2006 the issued share capital of the company was increased by the allotment of 3,500,000 8.625% Non-CumulativeIrredeemable Preference shares of £1 each. The directors do not recommend a final dividend on the ordinary shares for the year ended 31 December 2006 (2005: £nil). 3. Statement of changes in equity 2006 2005 £000 £000 Opening shareholders' equity 301,510 208,746 Total recognised income and expense for the year 50,812 75,861 Dividends payable (6,053) (5,207) Net charitable grant to ultimate parent undertaking (5,600) (3,745) Redesignation of preference share liabilities into share - 2,700 capital Premium on redesignation of preference shares - 715 Net proceeds from the issue of shares 4,340 22,440 --------- -------- Closing shareholders' equity 345,009 301,510 --------- -------- 4. General information The financial information set out above does not constitute the company's statutory accounts for the year ended 31December 2006 or 2005. Whilst the financial information included in this preliminary announcement has been computed in accordance withInternational Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information tocomply with IFRS. Full financial statements that comply with IFRS were approved by the Board of Directors on 21 March2007 and are expected to be published in April 2007. The statutory accounts for 2006 will be delivered to the Registrar of Companies shortly. The auditors have reported in accordance with s.235 of the Companies Act 1985 on the statutory accounts for 2005 and2006; their reports were unqualified and did not 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 21 March 2007. Ecclesiastical Insurance Office plc is a subsidiary of Ecclesiastical Insurance Group plc which is an investment holdingcompany whose ordinary shares are not listed. 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