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INDEQUITY INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2015
Indequity Group Limited
Registration number: 1998/015883/06
Incorporated in the Republic of South Africa
“Indequity” or “the Group” or “the Company”
Share code: IDQ
ISIN: ZAE000016606
INDEQUITY INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2015
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
31 March 31 March 30 September
2015 2014 2014
Unaudited Unaudited Audited
R'000 R'000 R'000
ASSETS
Property and equipment 995 745 701
Intangible assets 535 530 535
Subrogation and salvage recoveries 1 536 1 310 1 707
Reinsurance portion of insurance
contract provisions 41 36 45
Deferred tax asset - 34 -
Loans and receivables 45 35 54
Cash and cash equivalents 28 455 23 810 27 554
Total Assets 31 607 26 500 30 596
EQUITY
Capital and reserve attributed to the
company's equity holders
Share capital 23 23 23
Share premium 11 411 11 835 11 411
Retained income 12 272 7 905 11 436
Total Equity 23 706 19 763 22 870
LIABILITIES
Deferred tax liability 174 - -
Insurance contract provisions 4 974 5 055 4 629
Tax payable 136 8 201
Dividends payable 89 86 26
Trade and other payables 2 528 1 588 2 870
Total Liabilities 7 901 6 737 7 726
Total shareholders' equity and
liabilities 31 607 26 500 30 596
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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
6 Months 6 Months
Ended Ended Year Ended
31 March 31 March 30 September
2015 2014 2014
Unaudited Unaudited Audited
R'000 R'000 R'000
Gross written premium 22 023 20 236 41 220
Less: reinsurance premium (862) (717) (1 518)
Net premium written 21 161 19 519 39 702
Change in provision for gross unearned
premiums 15 122 (26)
Net insurance premium earned 21 176 19 641 39 676
Other income 35 39 76
Investment income 793 548 1 200
Total income 22 004 20 228 40 952
Claims incurred, net of reinsurance (9 615) (9 768) (18 696)
Gross claims incurred (9 798) - -
Reinsurance recoveries 183 - -
Administration Expenses (6 199) (5 922) (11 259)
Acquisition costs (1 645) (1 469) (2 985)
Total Expenses (17 459) (17 159) (32 940)
Profit before taxation 4 545 3 069 8 012
Taxation (1 272) (861) (2 273)
Total comprehensive income for the period 3 273 2 208 5 739
Profit attributable to:
- Equity holders of the parent 3 273 2 208 5 739
Earnings attributable to the equity
holders
Basic earnings per share (cents) 28.65 19.11 49.76
Diluted earnings per share (cents) 28.65 19.11 49.76
Dividends per share (cents)
- Ordinary shares 17.50 17.50 17.50
- "A" class preference shares 3.33 3.33 3.33
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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
Share capital Retained Total
and premium income
R'000 R'000 R'000
Balance as at 1 October 2013 12 152 8 160 20 312
Changes in Equity for the year
ended 30 September 2014
Total comprehensive income for
the year ended 30 September
2014 5 739 5 739
Dividend paid to shareholders (2 463) (2 463)
Treasury shares purchased by
subsidiary (718) (718)
Balance at 30 September 2014 11 434 11 436 22 870
Changes in Equity for the 6
months ended 31 March 2015
Total comprehensive income for
the 6 months ended 31 March
2015 3 273 3 273
Dividends Paid (2 437) (2 437)
Treasury shares purchased by
subsidiary
Balance at 31 March 2015 11 434 12 272 23 706
Balance as at 1 October 2013 12 152 8 160 20 312
Changes in Equity for the 6
months ended 31 March 2014
Total comprehensive income for
the 6 months ended 31 March
2014 2 208 2 208
Dividends Paid (2 463) (2 463)
Treasury shares purchased by
subsidiary (294) (294)
Balance as at 31 March 2014 11 858 7 905 19 763
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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
6 Months 6 Months
ended ended Year ended
31 March 31 March 30 September
2015 2014 2014
Unaudited Unaudited Audited
R'000 R'000 R'000
Net cash from operating activities 3 627 1 684 5 957
Net cash used in investing
activities (289) (137) (183)
Net cash used in financing activities (2 437) (2 675) (3 158)
Net movement in cash and cash
equivalents 901 (1 128) 2 616
Cash and cash equivalents at
beginning of the period 27 554 24 938 24 938
Cash and cash equivalents at
end of the period 28 455 23 810 27 554
EARNINGS PER SHARE
6 Months 6 Months
ended ended Year ended
31 March 31 March 30 September
2015 2014 2014
Unaudited Unaudited Audited
Basic earnings per share (cents) 28.65 19.11 49.76
Diluted earnings per share (cents) 28.65 19.11 49.76
Headline earnings per share (cents) 28.65 19.11 49.94
Fully diluted headline earnings per share
(cents) 28.65 19.11 49.94
Number of shares
- in issue 12 515 000 12 515 000 12 515 000
- weighted average 11 415 632 11 552 989 11 531 334
- diluted 11 415 632 11 552 989 11 531 334
The number of shares has been used in the calculations of earnings per share,
diluted earnings per share, headline earnings per share and fully diluted headline
earning per share.
Reconciliation of net profit attributable to
shareholders of the parent to headline
earnings
Net profit attributable to shareholders of
the parent (R'000) 3 273 2 208 5 739
Loss/Profit on sale of property and
equipment (R'000) - 21 21
- Before tax - 29 29
- tax - (8) (8)
Headline earnings (R'000) 3 273 2 229 5 760
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REVIEW OF RESULTS
Indequity is pleased to announce that it has increased its basic earnings per share
by 50% compared to the basic earning per share reported in the previous six month
period. Basic earnings per share increased from 19.11 cents for the six months ended
31 March 2014 to 28.65 cents for the six months ended 31 March 2015.
Indequity achieved a net claims ratio of 45% (2014:50%) and therefore once again
significantly outperformed its industry sector peers. The decreased net claims ratio
is largely due to the fact that there were no catastrophic events during the last
summer, combined with Indequity’s continued focus to effectively manage costs.
In order to trade profitably in the short term insurance market one needs to strike a
sensible balance between premium collections on the one hand and claims on the other.
We attribute our underwriting success to our disciplined underwriting practices and
effective control over claims expenses.
Administration expenses as a percentage of net insurance premium earned decreased
from 30% for the six months ended 31 March 2014 to 29% for the six months ended
31 March 2015, bearing testimony to the success of the efficiency improvements which
have been implemented in the business.
Indequity’s main objective has always been to create shareholder wealth through the
generation of superior returns on capital compared to its peers. We are pleased to
announce that we have again managed to generate an excellent annualised pre-tax
return on capital of 42% (2014: 31%).
PROSPECTS
Management remains optimistic about the prospects for the second half of the year,
but is cautious given the inherent uncertainty of any insurance business. The Company
will continue its efforts to optimise profitability with a focus on building a
superior quality business, building on successes of the past and improving
efficiencies.
ACCOUNTING POLICIES AND PREPARATIONS
The principal accounting policies applied in preparing the condensed interim
financial statements for the six months ended 31 March 2015 are in terms of
International Financial Reporting Standards (“IFRS”) and are consistent with those of
the annual financial statements for the year ended 30 September 2014. The interim
financial statements were prepared in accordance with and containing information
required by the recognition, measurement, presentation and disclosure requirements of
IFRS, IAS 34 – Interim Financial Reporting as well as the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council and in
compliance with the Listing Requirements of the JSE Limited and the Companies Act
(No.71 of 2008), as amended.
The financial information has been prepared in accordance with standards of IFRS that
are currently effective. This may differ from interpretive guidance from the
International Financial Reporting Interpretation Committee of International
Accounting Standards Board.
The condensed interim financial statements have not been audited, or reviewed by the
Company’s auditors.
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SEGMENT INFORMATION
No segment analysis has been prepared for the six months as the Group’s operations
are focused only on short-term insurance activities.
DIVIDENDS
In accordance with the Group’s insurance operations’ current cash requirements, no
interim dividends have been declared to ordinary shareholders.
ON BEHALF OF BOARD
LJ van Rensburg JF Zwarts Johannesburg
Chief Executive Officer Chairman 21 April 2015
Directors: LJ van Rensburg, TE Vorster, JF Zwarts*, G Williamson*,
AV van Jaarsveldt* (British), (*non-executive)
Company secretary: R Fourie
Transfer secretary: Link Market Services South Africa (Pty) Ltd
Sponsor: KPMG Services (Pty) Ltd
Registered address: First Floor, Cascade House, Constantia Office Park
CNR 14th Avenue and Hendrik Potgieter Road
Constantia Kloof
1709
Postal address: PO Box 5433
Weltevredenpark
1715
Telephone: (+27 11) 475 0816
Fax: (+27 11) 475 0877
Prepared by: R Fourie (Financial Accountant) under the supervision of
TE Vorster (Financial Director) is responsible for the
preparation of the interim results announcement.
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Date: 22/04/2015 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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