Ecclesiastl.8fe Regulatory News (ELLA)

4 Sep 2007 15:13

Ecclesiastical Insurance Office PLC04 September 2007 ECCLESIASTICAL INSURANCE OFFICE PLC INTERIM ANNOUNCEMENT OF RESULTS FOR THE PERIOD ENDED 30 JUNE 2007 INTERIM REPORT The Interim Report has been prepared in accordance with the recognition andmeasurement criteria of International Financial Reporting Standards (IFRS) andthe disclosure requirements of the Listing Rules. Total net earned premiums increased by 5.4% compared with the prior interimperiod. General insurance premiums and long term business premiums increased by2.2% and 66% respectively. Total net investment return was £48.1m (2006: £26.0m). The increase in netinvestment return was primarily due to favourable equity market movements in thecurrent interim period. This led to fair value gains of £19.6m (2006: £1.7m).Total investment income increased by 17.3% to £28.5m. Group profit before tax was £28.7m (2006: £27.8m). General business operationscontributed £26.2m (2006: £27.6m), including investment return, to this result.It includes an underwriting loss of £1.4m, down on the prior interim period(2006: £16.4m profit). A £2.7m profit (2006: break-even result) has beenconsolidated in group profit before tax from Ecclesiastical Life Limited. Newbusiness sales in financial services were up by 44% (2006: 11%) using theindustry standard measure. Group profit after tax was £21.4m (2006: £19.3m). Shareholders' equity increased to £361.9m (31 December 2006: £345.0m) afterpayment of a grant of £3.9m (2006: £2.1m), net of tax relief, to AllchurchesTrust Limited, the ultimate parent undertaking. Shareholders' equity at the endof the interim prior period, 30 June 2006, was £313.0m. In common with the industry as a whole we experienced claims from Storm Kyrillin January and the widespread flooding in June. Our gross claims costs weresubstantially reduced through reinsurance, and the immediate financialconsequences in our half-year figures was contained to £11.4 million. Theweather events in July were also in line with general industry experience. Theeffect of our reinsurance protection reduced the costs to an estimated £3million. Our focus has been to ensure that all our customers receive realsupport and service in line with our customer values. While many have faced verydifficult circumstances we are pleased to report very positive feedback. We havemade strenuous efforts to ensure that both our excellent claims service and thesuppliers that help our customers are well managed. Our offices in Gloucesterwere themselves without water for 14 days, and it is a great credit to our staffthat this service was provided in an uninterrupted manner. While trading conditions remain difficult we are determined to maintain ourunderwriting discipline and look forward to further consolidation of ourfinancial strength, subject to investment market conditions. Michael Tripp Group Chief Executive-----------------------------------------------------------CONSOLIDATED SUMMARY INCOME STATEMENTfor 6 months to 30 June 2007 30.06.07 30.06.06 6 Months 6 Months £000 £000Revenue Net earned premiums 128,494 121,894Fees and commission income 16,655 15,967Net investment return 48,118 26,029 ---------- ----------Total revenue 193,267 163,890 ---------- ---------- Expenses Claims and change in insurance liabilities (118,430) (92,306)Reinsurance recoveries 30,361 21,812Fees, commissions and other acquisition costs (35,380) (32,849)Other operating and administrative expenses (26,898) (25,357)Change in provisions for investment contract liabilities (3,025) (2,385)Change in net asset value attributable to unitholders (4,279) (2,782) ---------- ----------Total operating expenses (157,651) (133,867) ---------- ---------- Operating profit 35,616 30,023Finance costs (402) (207)Transfers to the unallocated divisible surplus (6,562) (2,004) ---------- ----------Profit before income tax 28,652 27,812Income tax expense (7,286) (8,502) ---------- ----------Profit for the financial period attributable to equity holders of the parent 21,366 19,310 All the amounts above are in respect of continuing operations. -----------------------------------------------------------CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEfor 6 months to 30 June 2007 30.06.07 30.06.06 6 Months 6 Months £000 £000 Net fair value gains on fixed assets 16 -Gain/(loss) on currency translation differences 2,803 (2,491) ---------- ----------Net income/(expense) recognised directly in equity 2,819 (2,491)Profit for the period after income tax 21,366 19,310 ---------- ----------Total recognised income and expense for the period 24,185 16,819 ---------- ---------------------------------------------------------------------CONSOLIDATED BALANCE SHEETat 30 June 2007 30.06.07 30.06.06 £000 £000 Assets Goodwill and other intangible assets 4,992 5,204Deferred acquisition costs 30,874 30,612Deferred tax assets 2,339 1,405Pension assets 18,680 17,883Property, plant and equipment 10,492 9,493Investment property 38,580 30,965Financial investments 952,506 817,049Reinsurers' share of contract provisions 174,341 156,513Current tax recoverable 628 513Other assets 114,632 98,901Cash and cash equivalents 188,864 194,022 ---------- ----------Total assets 1,536,928 1,362,560 ---------- ---------- Equity Share capital 80,477 76,977Share premium account 4,632 3,792Retained earnings and other reserves 276,819 232,245 ---------- ----------Total shareholders' equity 361,928 313,014 ---------- ---------- Liabilities Insurance contract provisions 870,739 790,213Investment contract liabilities 58,141 50,783Unallocated divisible surplus 44,667 31,710Borrowings 1,569 1,587Provisions for other liabilities and charges 7,184 6,144Retirement benefit obligations 9,134 7,748Deferred tax liabilities 49,648 43,517Current tax liabilities 5,831 5,149Deferred income 16,252 15,724Other liabilities 43,923 43,674Net asset value attributable to unitholders 67,912 53,297 ---------- ----------Total liabilities 1,175,000 1,049,546 ---------- ---------- ---------- ----------Total shareholders' equity and liabilities 1,536,928 1,362,560 ---------- ---------------------------------------------------------------------CONSOLIDATED CASHFLOW STATEMENTfor 6 months to 30 June 2007 30.06.07 30.06.06 6 Months 6 Months £000 £000 Net cash from operating activities 18,356 39,294 ---------- ---------- Cash flows from investing activitiesAcquisition of subsidiary, net of cash acquired (905) -Net purchases of property, plant and equipment (710) (1,145)Net purchases of intangible assets (180) (1,174)Net purchases of financial investments and investment property (41,694) (5,945) ---------- ----------Net cash used in investing activities (43,489) (8,264) ---------- ---------- Cash flows from financing activitiesPayment of finance lease liabilities (223) (208)Repayment of other borrowings (8,750) -Dividends paid to company's shareholders (3,416) (3,624)Donations paid to ultimate parent undertaking (8,300) - ---------- ----------Net cash used in financing activities (20,689) (3,832) ---------- ---------- ---------- ----------Net (decrease)/increase in cash and cash equivalents (45,822) 27,198 ---------- ---------- Cash and cash equivalents at the beginning of the period 234,425 169,301Exchange gains/(losses) on cash and cash equivalents 261 (2,477) ---------- ----------Cash and cash equivalents at the end of the period 188,864 194,022 ---------- ---------------------------------------------------------------------NOTES TO THE INTERIM ANNOUNCEMENT OF RESULTS FOR THE PERIOD ENDED 30 JUNE 2007 1. General Information The group results for the 6 month period to 30 June 2007 and 30 June 2006 areunaudited, but have been reviewed by Deloitte & Touche LLP whose report formspart of this announcement. This announcement was approved by the Board ofDirectors on 4 September 2007. 2. Accounting Policies The interim report has been prepared in accordance with the recognition andmeasurement criteria of IFRS and the disclosure requirements of the ListingRules. The group has not chosen early adoption of IAS34, Interim FinancialReporting. 3. Movement in Equity 30.06.07 30.06.06 6 Months 6 Months £000 £000 Opening equity 345,009 301,510Total recognised income and expense for the period 24,185 16,819Dividends payable (see note 4) (3,416) (3,215)Charitable grant to ultimate parent undertaking, net of tax relief (3,850) (2,100) ---------- ----------Total equity attributable to shareholders 361,928 313,014 ---------- ---------- 4. Dividends Dividends paid on the 8.625% Non-Cumulative Irredeemable Preference sharesamounted to £2.9m (2006: £2.7m). A net interim dividend of 0.392p (2006: 0.357p) per share on the Ordinary sharecapital was paid on 27 June 2007, amounting to £0.5m (2006: £0.5m). Thisdividend is paid to the company's immediate holding company, EcclesiasticalInsurance Group plc. 5. Holding company The ultimate holding company is Allchurches Trust Limited, a company limited by guarantee and a registered charity. -----------------------------------------------------------INDEPENDENT REVIEW REPORT TO ECCLESIASTICAL INSURANCE OFFICE PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2007 which comprises the consolidated summaryincome statement, the consolidated statement of recognised income and expense,the consolidated balance sheet, the consolidated cashflow statement and relatednotes 1 to 5. We have read the other information contained in the interim reportand considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2007. Deloitte & Touche LLP Chartered Accountants London 4 September 2007 This information is provided by RNS The company news service from the London Stock Exchange