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IDQ - Indequity Group Limited - Indequity Group Limited interim results March 2012 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 GROUP LIMITED INTERIM RESULTS MARCH 2012 CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION 31 March 31 March 30 2012 2011 September
2011 Unaudited Unaudited Audited R`000 R`000 R`000 ASSETS Property and equipment 417 295 465 Intangible assets 534 531 534
Subrogation and salvage 2 2 2 recoveries 232 538 263 Reinsurance portion of insurance contract provisions 33 21 23 Deferred tax asset 46 80 66 Loans and receivables 105 328 306
Cash and cash equivalents 19 16 15 043 179 987 Total Assets 22 19 19 410 972 644
EQUITY Capital and reserve attributed to the company`s equity holders Share capital 24 24 24
Share premium 13 13 13 645 554 633 Contingency reserve - 2 3 930 104
Accumulated profit/(loss) (5 (4 775 959) 178) Equity attributed to equity 14 10 12 holders of the parent 444 549 583 Minority interest 1 1 1 100 100 100 Total Equity 15 11 13 544 649 683
LIABILITIES Loans payable - - 219
Insurance contract provisions 4 3 3 914 820 292 Tax payable 181 674 142
Dividends payable 3 3 3 Trade and other payables 1 3 2 768 607 524
Total Liabilities 6 8 5 866 323 961 Total shareholders` equity and 22 19 19 liabilities 410 972 644 CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME 31 March 31 March 30 2012 2011 September
2011 Audited Unaudited Unaudited R`000 R`000 R`000
Gross written premium 17 15 32 332 744 196 Less: reinsurance premium (749) (1 (560) 166) Net premium written 16 15 31 583 184 030 Change in provision for unearned premiums, net of reinsurance (7) (21) (4) Net insurance premium revenue 16 15 31 576 163 026
Other income 117 172 504 Investment income 459 325 711
Total revenue 17 15 32 152 660 241 Claims incurred, net of reinsurance (8 (7 (14 241) 421) 649) Administration Expenses (4 (4 (10 854) 654) 124) Acquisition costs (1 (1 (2 350) 171) 430) Finance costs - (15) (2) Total Expenses (14 (13 (27 445) 261) 205) Profit before taxation 2 2 5 707 399 036
Taxation (858) (1 (672) 354) Total comprehensive income for the 1 1 3 period 849 727 682 Profit/(loss) attributable to: - Equity holders of the parent 1 1 3 849 727 682
- Minority interest - - - 1 1 3 849 727 682
Earnings attributable to the equity holders Basic earnings per share (cents) 31.33 15.64 14.77
Diluted earnings per share (cents) 15.55 14.77 30.98 Dividends per share (cents) - Ordinary shares - - CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY Share Accumulated Contingency Minority Total capital and loss reserve Interest premium
R`000 R`000 R`000 R`000 R`000 Balance as at 1 13 578 (7 514) 2 758 1 100 9 October 2010 922 Changes in Equity for the year ended 30 September 2011 Total comprehensive - 3 682 - - 3 income for 682 the year ended 30 September 2011 Ordinary shares 79 - - - distributed by 79 Indequity Group Limited share incentive purchase scheme Transfer to - (346) 346 - - contingency reserve Balance at 30 13 657 (4 178) 3 104 1 100 13 September 2011 683 Total comprehensive - 1 849 - - 1 income for the 849 6 months ended 31 March 2012 Ordinary shares 12 - - - distributed by 12 Indequity Group Limited share incentive purchase scheme Transfer from - 3 104 (3 104) - - contingency reserve Balance at 31 March 13 669 775 - 1 100 15 2012 544 Balance as at 1 13 578 (7 514) 2 758 1 100 9 October 2010 922 Total comprehensive - 1 727 - - 1 income for the 727 6 months ended 31 March 2011 Transfer to - (172) 172 - - contingency reserves Balance as at 31 13 578 (5 959) 2 930 1 100 11 March 2011 649 CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS 6 Months 6 Months Year ended Ended Ended 31 March 31 March 30 September
2012 2011 2011 Unaudited Unaudited Audited R`000 R`000 R`000
Net cash from operating 2 834 2 2 activities 497 679 Net cash from/(used in) 222 investing (85) (240) activities Net cash used in financing - activities - (219) Net increase in cash and cash 3 056 2 2 equivalents 412 220 Cash and cash equivalents at 15 987 13 13 beginning of period 767 767 Cash and cash equivalents at 19 043 16 15 end of period 179 987 HEADLINE EARNINGS PER SHARE AND DILUTED HEADLINE EARNINGS PER SHARE 6 months 6 months Year ended ended ended
31 March 31 March 30 September 2012 2011 2011 Unaudited Unaudited Audited
Headline earnings per share 15.64 (cents) 14.77 31.33 Diluted headline earnings per 15.55 share (cents) 14.77 30.98 Number of shares - in issue 13 170 000 13 170 13 170 000 000 - weighted average 11 829 967 11 688 11 753 910 333 - diluted 11 886 817 11 688 11 886 910 817
The number of shares has been used in the calculation of earnings per share, diluted earnings per share and headline earnings per share. FINANCIAL REVIEW Indequity`s results for the 6 months ending 31 March 2012 reflect a continuance of the earnings growth experienced over the last 4 years with profit before tax increasing by 13% on the excellent results reported for the same period of the prior financial year. The results display Indequity`s effective utilisation of capital resources with a pre-tax return on capital of 40%. Taking into consideration the difficult economic conditions that persisted and claim costs still under pressure throughout the short-term insurance industry, Indequity is pleased to report an 8% increase in underwriting profit and a 10% increase in gross written premium year on year. This growth is testament to Indequity`s disciplined underwriting approach. Indequity`s claims costs as a percentage of net written premium remained stable on 49% compared to the industry average of approximately 61%. Profit after tax increased by 7% from R1,7 million for the same period of the prior financial year to R1,8 million. The lower increase in profit after tax compared to profit before tax, is due to a higher effective tax rate for the current period. The continued improvement and growth of Indequity over this period resulted in an increase in cash and cash equivalents from R16,0 million at 30 September 2011 to R19,0 million at 31 March 2012, an increase of R3,0 million. PROSPECTS Management remains optimistic about the prospects for the second half of the year, but is cautious given increasing competition in the industry as well as 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. Indequity is well positioned to face current challenges with its unique product and a quality existing business. ACCOUNTING POLICIES AND PREPARATIONS The principal accounting policies applied in preparing the condensed interim financial statements for the six months ended 31 March 2012 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 2011. The interim financial statements were prepared in accordance with the recognition, measurement, presentation and disclosure requirements of IFRS, IAS 34 - Interim Financial Reporting and in compliance with the Listing Requirements of the JSE Limited. The financial information has been prepared in accordance with IFRS`s that are currently effective. This may differ from interpretive guidance from the International Financial Reporting Interpretation Committee of International Accounting Standards Board. The financial statements have not been audited, or reviewed by the company`s auditors. 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 16 May 2012 Directors: LJ van Rensburg, JF Zwarts*, G Williamson*, AV van Jaarsveldt* (British), (*non-executive) Company secretary: S Haripersad 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) 457 0816 Fax: (+27 11) 475 0877 Prepared by: S Haripersad (Chief Financial Officer) Date: 16/05/2012 07:05:04 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
