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8 Mar 2018 09:56
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GENERAL ACCIDENT PLC
Preliminary Announcement of results for the year ended 31 December 2017
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These results are published for the benefit of preference shareholders of General Accident plc ("the Company") for the year ended 31 December 2017. 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).
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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 2017 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 plc, and (2) interest rate risk, as the net asset value of the Company's financial resources is exposed to potential fluctuations in interest rates. Exposure to both credit and interest rate risk is managed through the monitoring of several risk measures.
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The Company is part of the Aviva group and Aviva owns 100% of the Company's ordinary issued share capital. In this context the Board has noted that in Aviva's 2017 results announcement on 8 March Aviva advised that it was targeting more than Ā£500 million in additional capital returns, incorporating liability management and returns to shareholders. In this regard, Aviva also noted the ability to cancel the preference shares at par value (plus accrued interest, arrears and in the case of the preference shares issued by General Accident plc, issue premium) through a reduction of capital, subject to shareholder vote and court approval and that the preference shares carry high coupons that are not tax-deductible and they will not count as regulatory capital from 2026. As the Company and Aviva evaluate alternatives, one of the things we are considering is how to balance the interests of ordinary and preferred shareholders.
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Summarised income statement | Audited | Audited | |
Ā | results | results | |
Ā | 12 months to | 12 months to | |
Ā | 31 December | 31 December | |
Statutory results | 2017 | 2016 | |
Ā | Ā£m | Ā£m | |
Ā | Ā | Ā | |
Investment income | 138 | 160 | |
Ā | Ā | ||
Total income | 138 | 160 | |
Ā | Ā | Ā | |
Profit on ordinary activities before tax | 138 | 160 | |
Tax on profit on ordinary activities | - | (32) | |
Profit for the year | 138 | 128 | |
Basic earnings per share (pence) | 0.61 | 0.56 |
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Ā Summarised statement of financial position | Ā Audited | Ā AuditedĀ | |
31 December | 31 December | ||
2017 | 2016 | ||
Ā£m | Ā£m | ||
Ā | Ā | Ā | |
Total assets | 13,973 | 13,980 | |
Ā | Ā | Ā | |
Equity attributable to ordinary shareholders | 13,691 | 13,664 | |
Preference share capital | 250 | 250 | |
Ā | Ā | Ā | |
Total equity | 13,941 | 13,914 | |
Ā | Ā | Ā | |
Liabilities | 32 | 66 | |
Total equity and liabilities | 13,973 | 13,980 | |
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Statement of changes in equity | Audited | ||
results | |||
12 months to | |||
31 December | |||
2017 | |||
Ā£m | |||
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Total equity at 1 January 2017 | 13,914 | ||
Ā | Ā | ||
Profit for the year | 138 | ||
Other comprehensive income | Ā | - | |
Ā Total comprehensive income for the year | Ā | Ā 138 | |
Ā | Ā | Ā | |
Dividends | Ā | (111) | |
Ā | Ā | Ā | |
Total equity at 31 December 2017 | Ā | 13,941 | |
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Summarised statement of cash flows as at 31 December 2017
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No statement of cash flows is presented as all balances would be nil (2016: nil). All the Company's cash requirements are met by fellow Group companies.
Basis of preparation
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The preliminary announcement for the year ended 31 December 2017 was approved by the Board of Directors on 7 March 2018. The preliminary announcement for the year ended 31Ā December 2017 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.
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The Company's Annual Report and Accounts for 2016 have been filed with the Registrar of Companies. The results for the year ended 31 December 2016 and 2017 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.
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The audited annual reports and accounts of both the Company and of Aviva plc for the year ended 31 December 2017, 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/.
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Enquiries: Chris Esson, Investor Relations Director, Aviva plc 020 7662 8115
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