GAH.L Regulatory News (GAH)

25 Sep 2007 07:04

Gable Holdings Inc25 September 2007 25 September 2007 GABLE HOLDINGS INC ("Gable" or "the Company" or "the Group") Unaudited Interim Results for the six months ended 30 June 2007 Gable Holdings Inc (AIM: GAH), the European insurance company to the buildingand construction sector, announces its unaudited interim results for the sixmonths ended 30 June 2007. Summary of the Period • Gross written premium of £4.0 million produces an earned premium of £3.3 million and net profit before tax of £0.4 million. On a pro forma basis, as explained below, the net profit would be £1.1 million • New more cost effective reinsurance programme in place from 1st July 2007 • GIAG's solvency position remains very strong and exceeds the requirement for its current and currently anticipated growth strategies Comment and Outlook William Dewsall, Chief Executive, Gable Holdings Inc, said: "The Board is pleased with the progress the Company has made over the last sixmonths, particularly against the backdrop of a UK market which has continued tobe challenging. Our renewal book is solid, giving us a strong start to the year." Enquiries: William Dewsall, Chief ExecutiveGable Holdings Inc tel: +44(0)20 7337 7460 John Bick, Hansard Group tel: +44(0)20 7250 1100 Gable Holdings Inc. Unaudited Interim results for the six months ended 30 June 2007 The Board of Gable Holdings Inc. ("Gable") is pleased to present its unauditedresults for the six months ended 30 June 2007. Results The results for the six months ended 30 June 2007 show gross written premium of£4.0 million. The results below show both the reported result and also anunaudited pro forma result prepared on the basis set out below, which the Boardbelieves provides a more representative basis of presentation for the six monthperiod: Six months ended 30 June 2007 £000s £000s Actual - reported Pro forma Earned premium 3,342 3,342Reinsurance (note 1) (1,212) (682)Acquisition costs (836) (836)Claims (note 2) (767) (690)Other direct costs (81) (81)Net insurance result 446 1,053 Notes 1. The pro forma reinsurance has been calculated based on the new programme(in place from 1 July 2007), as it will apply to all premium written from 1 July2007. 2. The claims provision for the six months has been provided at a levelconsistent with the actuarial evaluation undertaken earlier this year in respectof the 2006 underwriting year. The Board believes that this remains an overlyprudent approach and the pro forma therefore shows a reduction of 10% in theclaims provided. GIAG's solvency position remains very strong and exceeds the requirement for ourcurrent and currently anticipated growth strategies. The reported result for thesix month period shows a profit of £0.4 million (2006: loss of £0.1 million).At the end of the period net assets were £8.9 million (2006: £8.9 million). Cash balances at the end of the period were £1.3 million, of which £0.3 millionwas held by third parties on the Group's behalf as a result of premiumcollection, and in addition financial assets held in respect of insurancecapital in Liechtenstein were £3.6 million. Gable's internet based quotation system continues to provide one of the lowestfixed cost bases in the industry and provides a scalable platform as thebusiness grows. With the company moving into other markets the system has theability to move with it providing the same efficiencies. During the period GIAG purchased its new reinsurance programme, commencing 1July 2007, which is considerably more cost effective than its previous programmeand is also led by an AA rated underwriter. The benefits of this new programmewill be seen incrementally over the coming 12 months. The Board was pleased with the level of contract renewals during the periodgiving the business a strong foundation for the year moving forward. GIAG hasalso continued to see a growing level of business from its network of brokers inthe UK. Board On 20 September the Company announced the appointment of Lance Ranger as aNon-Executive Director. Lance is an international trust lawyer based inSwitzerland and specialises in international law and tax planning where he hasover 20 years experience advising a range of international clients. We welcomeLance to the Company. The Board would also like to thank Joanna Barrett, whostepped down from the Board as Non-Executive Director at the Company's last AGMin order to pursue other business commitments. Our thanks to Joanna for hercontribution since the Company floated on AIM in 2005. Outlook The Board is pleased with the progress the Company has made over the last sixmonths, particularly against the backdrop of a UK market which has continued tobe challenging. Our renewal book is solid, giving us a strong start to the year.Despite competitive market conditions we remain committed to writing onlyprofitable business in line with the Company's strategy to continue to delivershareholder value as the company grows. We can look forward to introducing newproducts and entering new markets in Europe later in the year and into 2008 andthe Board remains confident that it is well placed to meet its expectations forthe year ended 31 December 2007. William DewsallChief Executive24 September 2006 GABLE HOLDINGS INC.Consolidated Income StatementFor the six months ended 30 June 2007 Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 Notes £000s £000s £000s unaudited unaudited audited Gross written premiums 3,971 4,131 6,214Change in provision for gross unearned premiums 5 (629) (3,213) (2,626)Gross earned premiums 3,342 918 3,588 Outward reinsurance premiums (1,415) (480) (2,195)Change in provision for unearned premiums - reinsurers' share 5 203 373 920Net earned premiums 2,130 811 2,313 Net investment return 72 44 69Total revenue from operations 2,202 855 2,382 Gross claims paid 5 (105) - (29)Movement in gross technical provisions 5 (662) (115) (988)Gross claims incurred (767) (115) (1,017) Reinsurers' share of gross claims paid - - -Movement in reinsurers' share of technicalprovisions - - -Reinsurers share of claims incurred - - - Net claims incurred (767) (115) (1,017) Expenses incurred in insurance activities (836) (330) (908)Other operating expenses (174) (453) (699)Total operating charges (1,010) (783) (1,607) Profit from operations and before taxation 425 (43) (242) Taxation (30) (3) (10)Profit for the period attributable to equity holders of the Company 6 395 (46) (252) Earnings per share 4 0.35p (0.04)p (0.23)p All operations are continuing. GABLE HOLDINGS INC.Consolidated Balance SheetAt 30 June 2007 30 June 30 June 31 December 2007 2006 2006 Notes £000s £000s £000s unaudited unaudited auditedAssetsIntangible assets 4,250 4,250 4,250Tangible fixed assets 212 338 242Reinsurers' share of technical provisions - - -Deferred acquisition and reinsurance costs 5 1,874 1,176 1,606Prepayments and accrued income 594 939 806Trade and other receivables 2,801 2,920 959Financial assets 3,628 3,930 3,703Cash and cash equivalents 8 1,302 106 968Total assets 14,661 13,659 12,534 EquityShare capital 281 279 281Share premium account 5,406 5,308 5,406Share based premium reserve 20 20 20Other reserves 3,875 3,875 3,875Retained earnings (699) (622) (1,021)Total equity attributable to equity holders andtotal equity 6 8,883 8,860 8,561 LiabilitiesTechnical provisions 5 4,905 3,328 3,614Accruals and deferred income - 190 34Trade and other payables 873 1,281 325Total liabilities 5,778 4,799 3,973 Total liabilities and shareholders' funds 14,661 13,659 12,534 Net asset value per ordinary share 4 7.92p 7.95p 7.63p GABLE HOLDINGS INC.Consolidated Cash Flow StatementFor the six months ended 30 June 2007 Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 Notes £000s £000s £000s unaudited unaudited audited Cash flows from operating activitiesCash generated from operations 7 290 (569) (97)Interest received 44 47 37Net cash flows from operating activities 334 (522) (60) Cash flows from investing activitiesPurchases of financial assets - (3,930) (3,703)Purchase of tangible fixed assets - (300) (227)Net cash flows from investing activities - (4,230) (75) Cash flows from financing activitiesShares issued - - 100Share issue costs - - -Net cash flows from financing activities - - 100 Net increase/(decrease) in cash and cashequivalents 8 334 (4,752) (3,890) Cash and cash equivalents at period beginning 968 4,858 4,858 Cash and cash equivalents at period end 8 1,302 106 968 GABLE HOLDINGS INC.Notes to the Interim Consolidated Financial StatementsFor the six months ended 30 June 2007 1. Basis of preparation The Company was incorporated as a Corporation in the Cayman Islands which doesnot prescribe the adoption of any particular accounting framework. For the yearended 31 December 2006, Gable adopted International Financial ReportingStandards ("IFRS") in its Group financial statements for the first time. Theseinterim financial statements have been prepared under the historical costconvention and in accordance with the requirements of International ReportingStandards, in so far as they apply to interim statements. The Group financial statements consolidate the financial statements of GableHoldings Inc. and subsidiary undertakings made up to 30 June 2007. 2. Accounting policies There have been no changes to the Group's accounting policies as set out in theGroup's financial statements for the year ended 31 December 2006 and, as such,those accounting policies have been applied to these interim statements. 3. Segmental information The Group's business is the provision of construction insurance products and ithas, in the six months to 30 June 2007, derived its business from Great Britainand Ireland. 4. Earnings and net asset value per share The calculation of earnings per share is based on the net profit of £395,000(six months ended 30 June 2006: loss £46,000, year ended 31 December 2006 : loss£252,000) divided by the weighted average number of shares in issue during theperiod of 112,200,000 (six months ended 30 June 2006: 111,400,000, year ended 31December 2006 : 111,700,274). The net asset value per share is calculated by dividing the shareholders' fundsof £8,883,000 (30 June 2006: £8,860,000, 31 December 2006: £8,561,000) by thenumber of shares in issue at the end of the period - 112,200,000 (30 June 2006:111,400,000, 31 December 2006: 112,200,000). 5. Insurance assets and liabilities Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 £000s £000s £000s unaudited unaudited auditedDeferred acquisition and reinsurance costsAcquisition costs deferred 751 803 686Provision for unearned reinsurance premium 1,123 373 920 1,874 1,176 1,606 Technical provisionsClaims reserve 1,650 115 988Unearned premium 3,255 3,213 2,626 4,905 3,328 3,614 Claims paid 105 - 29Claims reservedAt 1 January 2007 988 - -Claims notified and reserved in the period 601 - 290Incurred but not reported movement in the period 61 115 698At 30 June 2007 1,650 115 988 Movement for provision in unearned premiumAt 1 January 2007 2,626 - -Movement in provision for the period 629 3,213 2,626 3,255 3,213 2,626 Movement in provision for unearned reinsurance premiumAt 1 January 2007 920 - -Movement in provision for the period 203 373 920 1,123 373 920 6. Reconciliation of movements in shareholders' funds Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 £000s £000s £000s unaudited unaudited audited Profit for the period 395 (46) (252)Issue of ordinary share capital - - 100Currency translation differences (73) - (193)Net (decrease)/increase in shareholders' funds 322 (46) (345)Equity shareholders' funds brought forward 8,561 8,906 8,906Equity shareholders' funds carried forward 8,883 8,860 8,561 7. Reconciliation of profit for the period before taxation to net cash flowsfrom operating activities Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 £000s £000s £000s unaudited unaudited audited Profit for the period after taxation 395 (43) (252)Interest received (44) (47) (69)Non-cash exchange movements 2 - (193)Depreciation of tangible fixed assets 30 37 60Increase of technical provisions 1,291 3,328 3,614Increase in deferred acquisition and reinsurance costs (268) (1,176) (1,606)Increase in debtors (1,630) (3,835) (1,709)Increase in creditors 514 1,167 58Net cash flows from operating activities 290 (569) (97) 8. Reconciliation of net cash flows to movement in net funds Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 £000s £000s £000s unaudited unaudited audited Change in cash for the period 334 (4,752) (3,890)Change in net funds resulting from cash flows 334 (4,752) (3,890)Net funds brought forward 968 4,858 4,858Net funds carried forward 1,302 106 968 9. General information The information for the period ended 30 June 2007 does not constitute statutoryaccounts as defined in Section 240 of the Companies Act 1985. The figures forthe period ended 31 December 2006 have been extracted from the 2006 statutoryfinancial statements prepared under IFRS. The auditors' report on thoseaccounts was unqualified and did not contain a statement under section 237(2) ofthe Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange