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7 Mar 2019 10:00
INFORMATION FOR GENERAL ACCIDENT PLC PREFERENCE SHAREHOLDERS
GENERAL ACCIDENT PLC
Preliminary Announcement of results for the year ended 31 December 2018
These results are published for the benefit of preference shareholders of General Accident plc ("the Company") for the year ended 31 December 2018. The preference shares have remained listed on the London Stock Exchange following the merger of the Company with Commercial Union plc, in June 1998 to form CGU plc ("CGU"), and the subsequent merger of CGU with Norwich Union plc in May 2000 to form Aviva plc (formerly CGNU plc).
The Company transferred its interest in its subsidiaries to its parent company, Aviva plc ("Aviva") in 2005, in return for an inter-company loan with Aviva. The income of the Company for the year ended 31 December 2018 consists of interest received on this loan. The principal risks and uncertainties facing the Company for the remainder of the year are (1) credit risk, as the net asset value of the Company's financial resources is exposed to the potential default on the loans and short term receivables due from its parent, Aviva, and (2) interest rate risk, as the net asset value of the Company's financial resources is exposed to potential fluctuations in interest rates impacting investment income. Exposure to both credit and interest rate risk is managed through the monitoring of several risk measures.
On 8 March 2018, as part of its 2017 results, Aviva announced that it had the ability to cancel its existing preference shares at par. On 23 March 2018, it announced that it would take no action to cancel the preference shares. On 30 April 2018, Aviva announced that it would offer a discretionary goodwill payment to shareholders who sold preference shares in the period from 8 to 22 March 2018 (inclusive) at a share price that was lower than the price that the preference shares returned to following the announcement on 23 March 2018. The total cost of the goodwill payments to preference shareholders, including associated administration costs, was £10 million against the initial estimate of approximately £14 million. £2 million was recognised in the Company. No material provision remains outstanding as at 31 December 2018.
The Company is part of the Aviva group ("Group") and Aviva owns 100% of the Company's ordinary issued share capital.
Summarised income statement | Audited | Audited | |
| results | results | |
| 12 months to | 12 months to | |
| 31 December | 31 December | |
Statutory results | 2018 | 2017 | |
| £m | £m | |
|
|
| |
Investment income
Preference share goodwill payment
| 146
(2) | 138
- | |
|
| ||
Total income | 144 | 138 | |
|
|
| |
Profit on ordinary activities before tax | 144 | 138 | |
Tax on profit on ordinary activities | - | - | |
Profit for the period | 144 | 138 | |
Basic earnings per share (pence) | 0.64 | 0.61 |
Summarised statement of financial position |
Audited |
Audited | |
31 December | 31 December | ||
2018 | 2017 | ||
£m | £m | ||
|
|
| |
Total assets | 13,934 | 13,973 | |
|
|
| |
Equity attributable to ordinary shareholders | 13,684 | 13,691 | |
Preference share capital | 250 | 250 | |
|
|
| |
Total equity | 13,934 | 13,941 | |
|
|
| |
Liabilities | - | 32 | |
Total equity and liabilities | 13,934 | 13,973 | |
| |||
| |||
Statement of changes in equity | Audited | Audited | |
results | results | ||
12 months to | 12 months to | ||
31 December | 31 December | ||
2018 | 2017 | ||
£m | £m | ||
| |||
Total equity at 1 January | 13,941 | 13,914 | |
|
|
| |
Profit for the period | 144 | 138 | |
Total comprehensive income for the period |
144 |
138 | |
|
|
| |
Dividends | (151) | (111) | |
|
|
| |
Total equity at 31 December | 13,934 | 13,941 | |
|
Summarised statement of cash flows as at 31 December 2018 | Audited | Audited |
results | results | |
12 months to | 12 months to | |
31 December | 31 December | |
2018 | 2017 | |
£m | £m | |
| ||
Cash flows from financing activities | - | - |
Net cash from financing activities | - | - |
Total net increase/(decrease) in cash and cash equivalents | - | - |
Cash and cash equivalents at 1 January | - | - |
Cash and cash equivalents at 31 December1 | - | - |
|
|
|
1 The closing balance as at 31 December 2018 is £116 (2017: £nil). The majority of the Company's cash requirements are met by fellow Group companies.
Basis of preparation
The preliminary announcement for the year ended 31 December 2018 was approved by the Board of Directors on 6 March 2019. The preliminary announcement for the year ended 31 December 2018 is prepared on the basis of the accounting policies set out in the annual accounts. Audited statutory accounts, together with the auditor's report thereon, will be filed with the Registrar of Companies when approved and published.
The Company's Annual Report and Accounts for 2017 have been filed with the Registrar of Companies. The results for the year ended 31 December 2017 and 2018 were audited by PricewaterhouseCoopers LLP. The auditor's report was unqualified and did not contain a statement under section 498(2) or section 498(3) of the Companies Act 2006.
The audited annual reports and accounts of both the Company and of Aviva plc for the year ended 31 December 2018, once published, will be available on application to the Group General Counsel and Company Secretary, Aviva plc, St Helen's, 1 Undershaft, London, EC3P 3DQ. Copies will be made available on the Aviva plc website once published at http://www.aviva.com/investor-relations/reports/.
Enquiries: Chris Esson, Investor Relations Director, Aviva plc 020 7662 8115
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