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Abridged Report for the Year Ended 30 September 2019
Indequity Group Limited
Registration number: 1998/015883/06
Incorporated in the Republic of South Africa
Share code: IDQ
ISIN: ZAE000016606
(“Indequity” or “the Group” or “the Company”)
SHORT FORM ANNOUNCEMENT FOR THE YEAR ENDED 30 SEPTEMBER 2019
HIGHLIGHTS
Change 30 September 2019 30 September 2018
R’000 R’000
Total income 12.2% 66 589 59 330
Profit before taxation 26.2% 15 187 12 038
Cents Cents
Capital distribution (2019) / Dividend (2018) per share 23.8% 29.72 24.00
Basic earnings per share 35.1% 96.47 71.41
Headline earnings per share 31.0% 97.01 74.06
COMMENTS ON RESULTS
The Group is delighted to present a very satisfying set of results for the year ended 30 September 2019, especially in
light of current economic conditions.
A few highlights are detailed as follows:
Our pre-taxation return on capital was 37.1% (2018: 29.4%), which comfortably exceeds our target of 20% per annum.
Turnover grew by 7.5% (2018: 9.6%) whilst our gross claims ratio decreased from 43% in 2018 to 41.2% in 2019.
Investment income increased to R4.2 million (2018: R1 million). This translated into growth in profit before tax of 26.2%
over the prior year.
As a result of further share repurchases made by the Group in terms of its share repurchase program, the weighted
average number of shares outstanding at year-end decreased which, in addition to the increased profits, contributed
to a 35.1% increase in diluted earnings per share and a headline earnings per share increase of 31.0% to 97.01 (2018:
74.06) cents per share.
OPERATIONS
The insurance industry in South Africa remains exceedingly competitive and the economic climate in the past few years
has become increasingly challenging. Achieving growth targets and delivering superior results remains a challenge. No
major natural disasters impacted the Group during the year, which enabled the Group to deliver a very pleasing set of
financial results from its insurance operations. In addition, the Group’s investments have performed well and have
started contributing positively to the Group’s profits. The cash generated by the Group amounted to R14.7 million.
LONG TERM GROWTH OF THE BUSINESS
The progress the Group has made over the years can be illustrated through the following statistics (figures in R’000):
2011 2012 2013 2014 2015 2016 2017 2018 2019
Net Premium Income 31,030 33,841 36,917 39,702 43,158 46,833 52,109 57,969 62,180
Underwriting Profit 16,381 17,795 19,439 21,006 24,167 26,949 27,335 32,534 35,965
Profit Before Tax 5,036 6,094 6,841 8,012 10,045 11,275 10,346 12,038 15,187
PROSPECTS
The Group continued to deliver growth in the insurance operations and is confident that this will continue into the
future, despite an exceptionally challenging insurance landscape.
A further R7.5 million ($539 thousand) was invested in the Group’s US subsidiary with the objective to serve as a hedge
against a depreciation of the South African Rand, and also to seek further opportunities to deploy the cash more
productively internationally. The Group’s cash and investments amounted to approximately R58 million at year end.
The Group continues to look for attractive investment opportunities where returns on capital can be maximised.
Although this is a long-term strategy, we are pleased to report that returns from investments have contributed notably
to the Group’s results in the current financial year.
CONCLUSION
Continued growth and increased profitability over the years and into the current year could only be achieved with the
continued support and commitment of our many stakeholders. We thank each and every stakeholder for their
continued contributions and together we look forward to even greater achievements in the future.
CAPITAL REDUCTION
For the year ending 30 September 2019, a capital reduction of 13.78 cents per ordinary share (2018: 14.00 cents per
share) and 2.29 cents per A class preference share (2018: 2.46 cents per share) has been declared to all ordinary
shareholders and A class preference shareholders recorded in the books of Indequity at the close of business on Friday,
13 December 2019. This payment is being paid out of contributed tax capital. CTC is defined as stated capital before
1 January 2011 less any deemed dividend before that date plus the consideration for new share issues subsequent to
1 January 2011 less any distribution from contributed tax capital after 1 January 2011.
The capital distribution timetable is structured as follows:
Declaration and finalisation date Wednesday, 20 November 2019
Last day to trade cum capital reduction Tuesday, 10 December 2019
First day to trade ex-capital reduction Wednesday, 11 December 2019
Record date Friday, 13 December 2019
Payment date Tuesday, 17 December 2019
Share certificates will not be able to be rematerialised or Wednesday, 11 December 2019 and
dematerialised between (both days inclusive) Friday, 13 December 2019
All ordinary shareholders and A class preference shareholders are hereby advised that the capital reduction will
not be subject to dividends tax.
In accordance with paragraphs 11.17(a)(i) to (ix) and 11.17(c) of the JSE Listings Requirements, the following
additional information is provided:
- The capital reduction has been declared out of stated capital
A class preference share capital
Ordinary share capital reduction reduction (cents per A class
(cents per ordinary share) preference share)
Capital reduction amount for
ordinary shareholders/A class 13.78 2.29
preference shareholders exempt
from dividends tax
- Indequity’s income tax reference number is 9887001718.
- The Group has 12 337 418 Ordinary shares, 14 870 000 A class preference shares and 11 669 680 B class
preference shares in issue.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of the shareholders of Indequity Group Limited will be
held at the registered office of the company – First Floor, Cascade House, Constantia Office Park, corner 14th
Avenue and Hendrik Potgieter Road, Constantia Kloof, Johannesburg – on Wednesday, 22 January 2020 at 11:00.
The AGM timetable is structured as follows:
- Last day to trade: Tuesday, 14 January 2020
- Record date: Friday, 17 January 2020
- Proxy date: Monday, 20 January 2020
- Annual General Meeting: Wednesday, 22 January 2020
SHORT FORM ANNOUNCEMENT
The content of this short form announcement is the responsibility of the directors. Shareholders are advised
that this short form announcement represents a summary of the information contained in the full long form
announcement which is available at https://senspdf.jse.co.za/documents/2019/jse/isse/idq/ye19.pdf and also
published on the Company’s website at http://www.indequity.com/documents. Any investment decisions by
investors and/or shareholders should be based on a consideration of the full announcement as a whole and
investors and shareholders are encouraged to review the full announcement, which is available as detailed
herein.
Copies of the full announcement may also be requested at the Company’s registered office or the office of the
sponsor, Merchantec Capital, at no charge, during office hours. Any investment decision should be based on the
full announcement released on SENS and published on the Company’s website.
Directors: AV van Jaarsveldt* (British), LJ van Rensburg, G Williamson*, JF Zwarts*, TE Vorster (* non-executive)
Company secretary: W du Preez
Transfer secretary: Link Market Services South Africa (Pty) Ltd
Registered address: First Floor, Cascade House, Constantia Office Park, cnr 14 th Avenue and Hendrik Potgieter
Road, Constantia Kloof, Johannesburg, 1709
Postal address: PO Box 5433, Weltevredenpark, 1715
Telephone: (+2711) 475-0816
Fax: (+2711) 475-0877
Website: www.indequity.com
Sponsor: Merchantec Capital
20 November 2019
Date: 20/11/2019 07:05:00
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