Wrap Text
Interim results for 6 months ended 31 December 2020
Clientèle Limited
(Registration number 2007/023806/06)
Share code: CLI ISIN: ZAE000117438
Interim results
for the six months ended 31 December 2020
Recurring Embedded Value Earnings increased by 47% to R414.6 million
Diluted headline earnings per share increased by 11% to 58.57 cents per share
Annualised return on average shareholders' interest of 41%
Net insurance premiums increased to R1.09 billion
Embedded Value per share of R17.58
Value of New Business increased by 145% to R124.9 million
Annualised Recurring Return on Embedded Value of 14.9%
Commentary
Introduction
Despite the impact of the COVID-19 pandemic, Clientèle Limited ("Clientèle") is pleased to report a strong set of results for the period with an improvement in all of its key
performance metrics when compared to the same period last year. This has been achieved against the backdrop of a struggling economy and has been driven by
production which has exceeded expectations, improved collection practices, better investment returns and tight control of expenses. The excess claims incurred during the
period as a result of the COVID-19 pandemic were provided for at 30 June 2020 and an additional COVID-19 risk reserve has been established to cover expected additional
claims for the six months to 30 June 2021.
We are pleased to report that the distribution capabilities and demand for Clientèle's products remains strong, however pressure on our clients' payment ability due to the
lockdown, reduced disposable income, increasing unemployment and the poor state of the economy are expected to endure for the foreseeable future.
Reassuringly, given the tough environment and factors referred to above, the Group is in a sound solvency and liquidity position.
The Clientèle Group ("the Group") achieved an annualised investment return for the period of 10.7% (2019: 5.5%) from its investment portfolios.
Clientèle's loyalty program, Clientèle Rewards, has been well subscribed to by clients and Rewards contracts have now been taken up by approximately 17% of Clientèle's
client base.
The Clientèle Application ("the Clientèle App") which has been keenly adopted by our clients enables a more interactive relationship with them and serves as a platform for
Clientèle Rewards and Clientèle Mobile, as well as many future opportunities.
Outlook
Clientèle is, more than ever, aware of the demand for its products and the need to continue to treat its clients well. Management continue to successfully navigate the
business through the COVID-19 lockdown challenges and Clientèle remains well positioned to service new and existing clients into the future.
Management's recent initiatives, which include Clientèle Rewards, the Clientèle App and Clientèle Mobile coupled with the roll-out of DebiCheck are aimed at improving
persistency, the quality of new business written and adding value to our customers. These initiatives have progressed during the period. Clientèle will continue to focus on
increasing production levels across all of its distribution channels, many of which have been successfully re-engineered for the new operating environment.
Tight control will continue to be kept on expenses and every effort will be made to maintain and improve business efficiencies.
Clientèle Rewards, the Clientèle App and Clientèle Mobile are important ingredients in offering our customers improved value, convenience and service which we believe will
further enhance and differentiate the Clientèle business model in future.
Clientèle remains committed to providing products and services that are relevant and meet our customers' needs and will continue to improve on the delivery of them to the
market conveniently and efficiently.
The Board is pleased with the results for the period, particularly given the context of a difficult economic, investment and operating environment and is comfortable that the
recent challenges have been handled well. Despite the pressure on Clientèle's customers' disposable income which has been compounded by COVID-19 and the
lockdown, the Board remains encouraged by the prospects for growth and value creation over time. Nonetheless in the short-term the Board still anticipates great
uncertainty and a poor economic climate.
The Board commends management and all employees for their effort and commitment in these extraordinary times.
By order of the Board
GQ Routledge BW Reekie
Chairman Managing Director
Johannesburg
22 February 2021
Six months ended Year
31 December ended
% 30 June
2020 2019 change 2020
Net profit for the period (R'000) 196,678 176,671 11 328,517
Headline earnings per share for the period (cents) 58.64 52.69 11 99.18
Earnings per share for the period (cents) 58.65 52.69 11 97.97
Embedded Value at the end of the period (R'000) 5,896,376 6,352,354 (7) 5,874,486
Embedded Value per share (cents) 1,758.42 1,894.44 (7) 1,751.90
Annualised Recurring return on Embedded Value (%) 14.9 9.1 *
Value of New Business for the period (R'000) 124,881 50,913 145 (90,549)**
Recurring Embedded Value Earnings for the period (R'000) 414,581 282,005 47 *
* As a consequence of COVID-19 and the lockdown, the change in EV was negative for the year ended 30 June 2020 and any split between recurring and once-off items
would be spurious due to the inter-relationship of various factors following the shutdown of much of the new business operations for a few months.
** Value of New Business for the year ended 30 June 2020 includes the once-off COVID-19 impact of negative R159.4 million.
Short-form announcement dated 22 February 2021
This short-form announcement is the responsibility of the Directors and is only a summary of the information in the full announcement and does not contain the full or
complete details. The full announcement can be found through this link (https://senspdf.jse.co.za/documents/2021/jse/isse/CLI/CLI2020.pdf). Copies of the full
announcement are available for inspection at the Company's registered office, at no charge, during office hours and may also be requested from Wilna van Zyl on
011 320 3284 or wvanzyl@clientele.co.za. Any investment decisions should be based on consideration of the full announcement accessible via the JSE link above and
published on the Company's website. Comprehensive commentary including regulatory requirements is contained in the full announcement.
Sponsor: PricewaterhouseCoopers Corporate Finance Proprietary Limited
Registered office: Clientèle Office Park, Cnr Rivonia and Alon Roads, Morningside, Johannesburg 2196, South Africa PO Box 1316, Rivonia 2128, South Africa
Transfer secretaries: Computershare Investor Services Proprietary Limited, First floor, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2106, South Africa
PO Box 61051, Marshalltown 2107, South Africa
Directors:
GQ Routledge BA LLB (Chairman); BW Reekie BSc (Hons), FASSA* (Managing Director); ADT Enthoven BA, PhD (Political Science); GK Chadwick MAgric, MBA#; B du Toit
BCom*; PR Gwangwa BProc LLB, LLM; LED Hlatshwayo CA(SA), MBA; IB Hume CA(SA), ACMA*; BY Mkhondo BCom, MBA; PG Nkadimeng BSc Statistics and
Economics; BA Stott CA(SA); RD Williams BBusSc (Hons), FASSA
(*Executive Director) (#Alternate Director)
Company secretary: W van Zyl CA(SA)
Date: 22-02-2021 05:00:00
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