TIDMTAW
RNS Number : 6037A
Tawa PLC
22 March 2013
PRESS RELEASE 22 MARCH 2013
PRELIMINARY RESULTS ANNOUNCEMENT
Tawa plc
Preliminary results for the year ended 31 December 2012
2012 was a year focused on operational optimisation
Tawa plc ("Tawa" or "the Company" and its subsidiaries together
"the Group") today announces preliminary results for the year ended
31 December 2012.
Financial highlights
-- Loss for the period attributable to owners of the Company was
$22.5 million (2011: loss $21.6 million);
-- Risk carriers profit excluding QX Re was $8.1 million (2011: loss $18.6 million);
-- Loss for QX Re was $14.3 million (2011: profit $7.8 million);
-- Investment in incubators was $7.0 million (2011: $ 7.5 million);
-- Service business profit was $2.7 million before charging
extraordinary costs of $3.2 million, giving a net loss of $0.5
million (2011: profit $6.0 million);
-- The Group's total equity has decreased by $19.7 million since
31 December 2011 to $178.5 million as at 31 December 2012;
-- Net assets per share in sterling decreased from GBP1.13 to
GBP0.98 ($ decreased from $1.75 to $1.57); and
-- No dividend planned for 2012.
General activities during 2012
-- Asta Insurance Markets Limited ("Asta" - formerly Whittington
Insurance Markets Limited acquired on 26 January 2012 by a
consortium comprising Tawa, Skuld, and the Paraline Group, Ltd;
-- Hamburger Internationale Ruckversicherung AG ("HIR") acquired
on 20 April 2012. HIR is the holding company for the Chiltington
group of companies;
-- The proposed sale of KX Reinsurance Company Limited and its
wholly owned subsidiary OX Reinsurance Company to Catalina was
announced on 24 September 2012. This transaction is subject to
regulatory approval; and
-- On 10 September 2012 the Board announced the launch of a
formal sale process, aimed at expanding the search for further
equity backers of the Group. The process was terminated on 30
November 2012.
Gilles Erulin, Chief Executive Officer of Tawa plc,
commented:
"After an expansive external growth 2011 year, 2012 focussed on
integration, turn around and replenishing our investment capacity.
While we did not succeed on the latter point, we did achieve the
two former goals.
Going back to basics, we actively and profitably downscaled our
risk carriers, restructured our service cost basis and got our
incubated companies off the ground.
We are disappointed by the QX Re outcome, which masks the
results of a solid year of work from all our teams, and look
forward to 2013 for those efforts to progressively crystallize into
cash flow and net asset value".
-END-
Enquiries:
Gilles Erulin, Chief Executive, Tawa plc 020 7068 8000
Victoria Sisson or Alexandra Thompson, FWD 020 7623 2368
James Britton, or Guy Wiehahn, Peel Hunt (Nominated
Adviser and Broker) 020 7418 8900
Notes for Editors:
Tawa plc was formed in 2001 and is a specialised investor in the
insurance industry. In the last few years, Tawa has moved from
being a pure run-off risk owner towards being a multi-segment
investor in the insurance market, expanding significantly in the
servicing arena of the international insurance industry.
Tawa invests in acquiring run-off portfolios ("Portfolios",
"Risk Carriers") and investing in servicing business. The Group
also operates as an incubator for new projects and has invested
alongside professional teams to create two new businesses, Q360 and
Lodestar Marine, in addition to developing its own products to
serve the insurance market as a wholesuch as STRIPE(R) .
On the portfolio front, Tawa has acquired, since its formation,
nine insurance entities in run-off - CX Reinsurance Company
Limited, Hamburger Internationale Rückversicherung AG, KX
Reinsurance Company Limited, Lincoln General Insurance Company,
PXRE Reinsurance Company, Island Capital Limited, Island Capital
(Europe) Ltd, Pavant International Re S.A, and OX Reinsurance
Company Limited. As an alternative technique to assuming run-off
risks, Tawa established a dedicated reinsurance vehicle, QX
Reinsurance Company Limited, in Bermuda to reinsure portfolios. On
the service side, Tawa acquired Pro Insurance Solutions Ltd (Pro)
in 2009 and the HIR group in April 2012. HIR owns the Chiltington
Consulting Group. Through HIR, Tawa now offers a vehicle for
European run-off portfolios transfers under the European Union
portfolios transfer directive.
The Group's combined team of approximately 400 professionals
provide underwriting, claims management, broking and consulting
services to a broad array of international clients across the
global insurance market, whether active underwriters or run-off.
The Group has also established an innovative platform to provide
turnkey services supporting clients wishing for immediate start of
a new broking or MGA venture.
As part of its expansion in the Lloyd's market, in January 2012,
Tawa became the owner of 33% of Asta Limited, the leading turnkey
agency management services company in Lloyd's.
Tawa plc is listed on the AIM market.
Further information can be found on the Company's website:
www.tawaplc.co.uk.
Joint statement of the Chairman and the Chief Executive
Officer
To our Shareholders,
2012 was dominated by two themes for Tawa. One of these was
ensuring the proper integration of the various businesses acquired
and investments made in 2011. The other was the search for new
equity backers, which took the form of a formal sales process.
Overview
Over the last three years, Tawa has moved from being a pure
run-off risk carrier towards being a multi-segment player in the
insurance market. Acting as a specialised investor in the insurance
industry, Tawa owns run-off portfolios and insurance service
providers. The Group also operates as an incubator for new projects
in the sector and supports professional teams to launch and operate
new business ventures.
In 2012 Tawa completed the previously announced acquisition of
the Chiltington Group ("Chiltington"), a specialist in insurance
consulting, and the acquisition of 33% of Asta (formerly known as
Whittington), the leading turnkey agency management services
company in Lloyd's, through a newly-created consortium. It also
announced the sale, subject to regulatory approval, of KX Re to
Catalina as part of its investment management program.
The priority in 2012 was the integration of recently acquired
businesses and the optimisation of the operations and profitability
of Tawa's business lines. Volatility reduction and portfolio
downscaling received a great deal of attention in 2012. The risk
carriers, excluding QX Re, returned a net profit of $8.1 million
against a loss of $18.6 million in 2011. QX Re had a loss of $14.3
million (2011: profit $8.8 million) largely arising from
strengthening reserves by $15.8 million. We expect these results
will enable us to extract capital from the risk carriers in 2013
with regulatory consent.
The agreed KX Re sale to Catalina (subject to regulatory
approval) will finalise a cash-on-cash return of $46.6 million
(total purchase and interest costs of $71.7 million against total
capital extractions, management fees and sale price of $118.3
million) for the Group and will enable us to deleverage the
platform. While this disposal will result in a loss in 2013 of
$20.0 million under IFRS accounting, cash-on-cash numbers are a
better indicator of how our investment portfolio creates value for
our shareholders.
Turning to the service business, in steering the business mix
towards a more balanced portfolio, our subsidiaries have made
significant investments to support new products. Meanwhile they
continued to suffer from a high cost base. Profits of $2.7 million
from Pro Insurance Solutions Limited ("Pro") and Chiltington were
reduced to a loss of $0.5 million through exceptional restructuring
costs to reduce the cost base going forward.
We have been successful in retaining more contract business for
a longer period than had been expected as well as in replacing much
of that business reaching the end of its natural lifecycle with new
clients and more revenues from new business lines. Nonetheless, the
staffing needs continued to change as a result of the changing
business mix. Whilst we redeployed significant numbers of employees
to new roles this year, we did let others go. We want to take this
opportunity to thank each of them for their dedicated efforts on
our behalf and to wish them well for the future.
On a more positive note, the continued development and
profitability from Asta is an area of satisfaction. With 6
syndicates under management and the approval by Lloyd's of the new
Nephila syndicate, Asta is on a steady course. It has met all its
regulatory deadlines including the demanding Solvency II deadlines
and expects to assist two of its incubated syndicates set up their
own managing agencies in the next year or so. The free cash flow
generated by the business has enabled a slightly accelerated
repayment of the acquisition loans.
Also in 2012, Tawa invested $7.0 million in support of Lodestar
Marine, the marine P&I MGA, the broking firm Q360, and in
developing STRIPE(R) , an internet claims management system. Whilst
we consider these outlays as investments expected to provide
superior earnings in the future, under IFRS accounting they were
fully expensed during the year rather than capitalised.
Lastly, your management team continue to pursue opportunities
for significant overhead cost savings across the organisation.
Those costs have reduced by $3.0 million year on year on a like for
like basis, excluding the acquisition of the Chiltington Group.
Formal sale process
On 10 September 2012 the Board announced the launch of a formal
sale process, aimed at expanding the search for further equity
backers of the Group. Although a number of proposals for certain
parts of the Group were received, no proposal satisfactory to the
board was forthcoming. The process was terminated on 30 November
2012.
Accounts and dividends
On the accounting front, Tawa reported a full year loss of $21.9
million, bringing the net assets per share at 31 December 2012 to
$1.57 per share (GBP0.98 per share) compared with 31 December 2011
of $1.75 per share (GBP1.13 per share) and a share price of 44p at
the end of 2012.
These results stem mainly from the $15.8 million adverse reserve
development in QX Re, the Bermudian regulated special purpose
insurer formed in March 2011 to provide reinsurance for a book of
US lead paint exposure. Tawa has given the cedant company notice of
potential claims arising out of the transaction documents. Ongoing
discussions are being held with respect to resolution of these
notified claims.
As noted above the $7.0 million invested in Lodestar Marine,
Q360 and STRIPE(R) was fully expensed during the year rather than
capitalised.
In light of these results, Tawa will not recommend any dividend
in 2013 relating to the results for 2012.
2013 Prospects
2013 will see a continuation of our efforts to grow the service
business. Volatility reduction and downscaling will continue for
our risk carriers. At Group level our agenda remains: deleveraging,
cost savings and the restoration of an internal and external
investment capacity.
Risk management and compliance
Tawa perceives the current regulatory environment, which is
imposing a high toll on the industry in terms of expense and
management focus, to be beneficial to its business model as high
standards of compliance and risk management are increasingly
becoming a USP for our service business.
Tawa and its subsidiaries are committed to respond positively
and proactively to regulatory evolution and are allocating
increased resources in the areas of risk management, compliance and
internal audit. Our responsibility to our various shareholders is
to assume and manage business risk, whilst ensuring that our low
tolerance of other forms of risk is addressed through effective
systems of internal control.
The Tawa senior team is closely involved in all companies in our
portfolio to ensure our systems and controls are consistent with
the size and the complexity of our different businesses. This
requires constant improvement and an approach that ensures we are
never complacent about what we perceive as a key business
enabler.
Practically, the leadership teams run a balance between hands-on
day to day management, what might be termed "management by walking
around", and a more formalised approach to risk management.
* * * * * *
In conclusion, we would like to thank each of our shareholders
for their strong support during 2012. The company has started to
build on foundations laid in 2011 to develop a larger high-end,
stand-alone service unit and the momentum for a stronger and more
profitable Group.
To achieve our goals, your company will rely on what makes us
different from other places, namely our people: people across the
world with high expertise, skills and integrity, working together
to achieve our common purpose. On your behalf, we would like to
thank each of them for their continuing contribution to the
Group.
Lastly, thanks also go to the Directors for their active
contribution and support.
Financial review
Introduction to the Group's business
Tawa plc ("Tawa"), was formed in 2001 and is a specialised
investor in the insurance industry. In the last few years, Tawa has
moved from being a pure run-off risk owner towards being a
multi-segment investor in the insurance market, expanding
significantly in the servicing arena of the international insurance
industry.
Tawa invests in acquiring run-off portfolios ("Portfolios",
"Risk Carriers") and investing in servicing business. The Group
also operates as an incubator for new projects and has invested
alongside professional teams to create two new businesses, Q360 and
Lodestar Marine, in addition to developing its own products to
serve the insurance market as a whole such as STRIPE(R) .
On the portfolio front, Tawa has acquired, since its formation,
nine insurance entities in run-off - CX Reinsurance Company
Limited, Hamburger Internationale Rückversicherung AG, Island
Capital Limited, Island Capital (Europe) Ltd, KX Reinsurance
Company Limited, Lincoln General Insurance Company, Pavant
International Re S.A, OX Reinsurance Company Limited and PXRE
Reinsurance Company. As an alternative technique to assuming
run-off risks, in 2011 Tawa established QX Reinsurance Company
Limited, a special purpose reinsurer in Bermuda to reinsure a book
of US lead paint exposure. In 2012 the Group has been focused on
volatility reduction, portfolio downscaling and potential sale of
some assets.
On the service side, Tawa acquired Pro in 2009 and the HIR group
in April 2012. HIR owns the Chiltington Consulting Group. Through
HIR, Tawa now offers a vehicle for European run-off portfolio
transfers under the European Union portfolio transfer directive.
Tawa currently services a number of significant insurance clients,
and aims to continue the development of this platform. This
development of the service business remains a key focus of the
Group and it has changed the Group's metrics from being only a
balance sheet cash extraction driven business to a more balanced
mix between recurring cash flows matched with release of excess
capital from the risk carriers.
In addition, since 2011, the Group has operated as an incubator
for new and innovative products and projects in the insurance
market. Tawa is investing significant financial and operating
resources in this area as a means to diversify into the live
insurance market and thereby provide the Group with enhanced
business opportunities. Tawa has developed a web-based platform
allowing principal to principal processing of claims and
post-placement transactions which is branded as the STRIPE(R)
system. In addition, in 2012 Pro expanded its intermediary
management capacity to support brokers and managing general agency
("MGA") turnkeys. On this basis, Tawa launched and funded two new
"incubation projects", namely Q360, a London-based broker, and
Lodestar Marine, a MGA.
As part of its expansion in the Lloyd's market, in January 2012,
Tawa acquired 33% of Asta Insurance Markets Limited (formerly
Whittington Insurance Markets Limited), the leading turnkey agency
management services company in Lloyd's.
Tawa has the following divisions with clearly identified lines
of business, namely:
-- risk carriers/insurance division which holds the Group's
acquired insurance entities in run-off (risk carriers).
Profitability is achieved by effectively managing these assets and
liabilities;
-- service providers which comprise a platform that generates
income from consulting and outsourcing. Consulting typically
includes work provided directly for clients and the outsourcing
division includes work done on behalf of clients on Tawa's
platform; and
-- corporate division which comprises incubators, all group
overheads, corporate costs, acquisition activities and
financing.
Summary of 2012 financial results
31 Dec 2012 $m 31 Dec 2011 $m
--------------------------------------------------------------------------- ---------------- ----------------
External revenue 33.0 35.4
Profit recognised upon set-up of QX Re - 20.9
Loss recognised in respect of QX Re for the period (14.3) (13.1)
Profit/(loss) recognised in respect of other risk carriers for the period 8.1 (18.6)
Loss recognised in respect of incubator costs for the period (7.0) (7.5)
(Loss)/profit recognised in respect of service division for the period (0. 5) 6.0
Loss recognised in respect of share of associate Asta for the period (1.2) -
Corporate costs for the period (4.4) (7.2)
Finance costs for the period (3.2) (2.1)
--------------------------------------------------------------------------- ---------------- ----------------
Total losses for the period attributable to the owners of the Company (22.5) (21.6)
Equity attributable to members 178.5 198.2
-- Loss for the period attributable to owners of the Company was
$22.5 million (2011: loss $42.5 million excluding profit of $20.9
million on set-up of QX Re);
-- The Group's total equity has decreased by $19.7 million since
31 December 2011 to $178.5 million as at 31 December 2012;
-- Net assets per share in sterling decreased from GBP1.13 to
GBP0.98 ($ decreased from $1.75 to $1.57); and
-- The Group's net tangible assets are $154.6 million (2011: $173.5 million).
On 26 January 2012, a consortium comprising Tawa plc, Skuld, and
Paraline Group Limited completed the acquisition of Whittington
Insurance Markets Limited. The company has since been renamed Asta
Insurance Markets Limited under a new holding company set up by the
consortium named Asta Capital Limited ("Asta"). This transaction
provides Tawa with a platform through which to expand its range of
services to the Lloyd's market. Asta is the leading franchise in
the Lloyd's agency management market and provides the Group with
real scale as a provider of insurance services to the live market.
This is highly complementary with the range of consulting and
outsourcing services currently provided through Pro.
On 20 April 2012, Tawa completed the acquisition of Hamburger
Internationale Rückversicherung AG ("HIR"), the holding company for
the Chiltington group of companies ("Chiltington"). Chiltington
provides consultancy and outsource services to the international
(re)insurance industry. While strengthening Tawa's UK and US units,
this transaction provides a strong footprint in Continental Europe
and a unique insurance consulting platform in South America. Also,
through HIR, Tawa now offers a vehicle for European run-off
portfolio transfers under the European Union portfolio transfer
directive such as the Austrian Oberoesterreichische portfolio
received in May 2012, following the Sparkassen portfolio received
in late 2011.
Acquisitions
Tawa is in the business of acquiring, managing and then, if
appropriate, divesting assets. On the portfolio front, during 2012
the divestment strategy has been prevalent, highlighted by the
sale, subject to regulatory approval, of two of its risk carriers.
In contrast, Tawa has pursued and generated acquisition targets
through its servicing business clients and also special situations
where the skill sets and expertise of its staff created a unique
selling point for Tawa. On the servicing front the 2012 goal for
Tawa was moving its internal resources towards providing more
high-end, value-added consulting. This was supplemented by
increasing its offering both geographically and into the Lloyd's
market. Those strategies were achieved, the latter demonstrated by
the acquisitions of HIR and Asta respectively.
Details of Tawa's acquisitions for the year are below:
Hamburger Internationale Rückversicherung AG
On 20 April 2012 the Group acquired 100% of the issued share
capital of Hamburger Internationale Rückversicherung AG ("HIR").
HIR is the parent company of a group of companies detailed below
which are involved in reinsurance, management and advisory
services:
Chiltington Holdings Limited Chiltington International GmbH
Chiltington International Limited Chiltington Internacional
S.A.
Chiltington International Holding GmbH Pavant International Re
S.A. ("PIR")
Chiltington International Inc Hamburg International Reinsurance
Limited
This transaction was accounted for by the purchase method of
accounting. The initial accounting for the business combination is
incomplete and the amounts recognised in these financial statements
are provisional. The fair values of the acquired intangible assets
remain provisional pending the final valuations of these assets.
The net assets acquired in the transaction, and the goodwill
arising, are as follows:
Book value Fair value adjustments Fair value on acquisition
$m $m $m
-------------------------------------------------- ------------ ----------------------- ---------------------------
Assets
Cash and cash equivalents 13.7 - 13.7
Financial assets - investments 32.9 0.2 33.1
Loans and receivables including insurance
receivables 6.0 - 6.0
Reinsurers' share of technical provisions 0.6 - 0.6
Property, plant and equipment 0.1 - 0.1
Liabilities
Creditors arising out of insurance operations (5.1) - (5.1)
Other liabilities (14.8) (1.2) (16.0)
Technical provisions (26.7) 2.0 (24.7)
-------------------------------------------------- ------------ ----------------------- ---------------------------
6.7 1.0 7.7
-------------------------------------------------- ------------ ----------------------- ---------------------------
Consideration paid in cash 4.5
Consideration paid in shares 1.9
Deferred consideration payable 1.0
-------------------------------------------------- ------------ ----------------------- ---------------------------
Consideration paid in cash net of cash and cash
equivalents (9.1)
-------------------------------------------------- ------------ ----------------------- ---------------------------
Negative goodwill arising on acquisition (0.3)
-------------------------------------------------- ------------ ----------------------- ---------------------------
The initial accounting for the business combination is
incomplete and the amounts recognised in these financial statements
are provisional.
Deferred consideration payable as reserved dividends are due to
the sellers as illustrated in the table below:
Maximum settlements per annum
$m
-------------------------------------------------------- ----- ------------------------------
Dividends paid by HIR prior to 31 Mar 2012 100% 3.8
Dividends paid by HIR between 1 Apr 2012 - 31 Dec 2012 90% 3.4
Dividends paid by HIR between 1 Apr 2013 - 31 Dec 2013 75% 2.8
Dividends paid by HIR between 1 Apr 2014 - 31 Dec 2014 60% 2.3
Dividends paid by HIR between 1 Apr 2015 - 31 Dec 2015 45% 1.7
Dividends paid by HIR between 1 Apr 2016 - 31 Dec 2016 30% 1.1
Dividends paid by HIR between 1 Apr 2017 - 31 Dec 2017 15% 0.6
Tawa's actuaries have computed an expected fair value of $1.0
million.
Since acquisition the HIR group of companies have contributed a
profit of $0.6 million after the elimination of intra-group income
and expenses, comprising a profit of $1.4 million from the risk
carriers offset by a loss of $0.8 million from the service
division. If the acquisition of the HIR group of companies had been
completed on the first day of the financial year, Group profit
attributable to equity holders of the parent would have increased
by $0.1 million.
On 5 June 2012 Swiss Re transferred 74% of its shares of ASS
Assekuranz Service-und Sachverständigen GmbH ("ASS") to Chiltington
International Holding GmbH (73%) and PRO Insurance Solutions
Limited (1%). ASS is a specialised service provider in disability
claims handling. Swiss Re will retain 26% of the shares. The
transaction is of no value in the current year.
Asta Capital Limited
On 26 January 2012, the consortium comprising Tawa plc, Skuld,
and Paraline Group Limited completed the acquisition of Whittington
Insurance Markets Limited. The company has since been renamed Asta
Insurance Markets Limited under a new holding company set up by the
consortium named Asta Capital Limited ("Asta"). Tawa's share of
associate as at 31 December 2012 is:
31 December 2012
$m
--------------------------------------------------- ------------------
Gross revenue 34.7
Loss for the year (3.5)
Group's share of associate's loss at 33.33% (1.2)
--------------------------------------------------- ------------------
Total assets 51.4
Total liabilities (24.2)
Net assets 27.2
--------------------------------------------------- ------------------
Group's share of associate's net assets at 33.33% 9.1
--------------------------------------------------- ------------------
Tawa's results for the year summarised by division are:
Insurance risk carriers
----------------------------
Reconciliation
Group Associate Service to financial
subsidiaries CX Re providers Corporate statements Totals
Segmental extract $m $m $m $m $m $m
------------------ -------------- ----------- --------------- --------------- --------------- --------
External revenue - - 33.0 - - 33.0
Segment profit/(loss)
for the year (9.6) (0.2) * (0.4) (12.3) - (22.5)
Total equity 148.4 38.9 9.9 19.2 (37.9) 178.5
* CX Re loss is $0.2 million through deferred consideration.
Risk carriers/insurance division
Tawa generates value from run-offs in a variety of ways,
depending on the nature of each run-off entity in question. These
approaches include:
-- Buying net assets at a significant discount to economic value
and accelerating capital extraction; and
-- Buying volatile books of business and applying management
techniques to create value and reduce volatility.
This division comprises the results from the following run-off
companies in which Tawa held the following interests at the
reporting date:
Place of incorporation (or registration)
Name of subsidiary and operation Portion of ownership interest
------------------------------------------ ------------------------------------------ ------------------------------
KX Reinsurance Company Limited ("KX
Re") Great Britain 100%
PXRE Reinsurance Company ("PXRE") United States Connecticut 100%
Hamburger Internationale
Rückversicherung AG ("HIR") Germany 100%
Island Capital Ltd ("ICL") Bermuda 94.30%
Island Capital (Europe) Ltd ("ICE") Great Britain 94.30%
OX Reinsurance Company Limited ("OX
Re") Great Britain 100%
Pavant International Re S.A ("PIR") France 100%
QX Reinsurance Company Limited ("QX
Re") Bermuda 100%
Name of Associate
------------------------------------------ ------------------------------------------ ------------------------------
CX Reinsurance Company Limited ("CX
Re") Great Britain 12.65%
CX Re was initially a subsidiary of the Group but on 21 March
2006 Tawa disposed of 87.35% of its shareholding. In accordance
with IFRS, the retained shareholding of 12.65% has been accounted
for as an associate since that date. Although the Company disposed
of 87.35% of CX Re the deferred consideration receivable on the
sale will reflect the current net asset value of CX Re. As at 31
December 2012, the total deferred consideration was $48.7 million
(2011: $53.8 million). The reduction in the year reflects the cash
settlement of GBP3.0 million in respect of the transaction
facilitation fee.
During the course of a run-off, the Group is exposed to a range
of risks that need to be identified and managed. These risks
include adverse loss development (insurance risk), liquidity,
operational risks, fluctuating foreign exchange rates, interest
rates and credit risk both in respect of investments and reinsurer
solvency. The Group's focus is to manage and mitigate these
risks.
The liabilities of the run-off companies typically comprise
claims outstanding, being the estimated cost of settling all claims
incurred but not paid, whether reported or not, together with
provisions for future costs related to the management of the
run-off. The claims outstanding reserves are estimated by the
Group's actuaries.
The assets of a run-off company typically comprise cash,
investments, subrogation recoveries and reinsurance recoverables.
From these assets, and any associated investment income, the Group
must meet the cost of administering and paying all claims that
arise on policies issued prior to the run-off. The residual
balance, if any, will be returned to shareholders once all
liabilities have been repaid or when the relevant regulator is
satisfied, inter alia, that the volatility is reduced to a level
where capital can be released. This is based on estimates of the
appropriate level of reserves and capital that the business
requires to settle all valid claims.
The Group's net technical provisions (claims outstanding less
reinsurance recoveries) will be paid over a period of many years
dependent upon the nature of the underlying risk, the claims
outstanding and the related reinsurance recoveries. The Group's
policy is, where appropriate to discount the technical provisions
at the risk-free rate applicable to the relevant currency at the
duration of the liabilities where these have a mean term in excess
of 4 years. Currencies held in the Group are US dollar, sterling
and euro.
The Group's strategic principles for its asset and liability
management ("ALM") in the insurance entities are to:
-- Provide liquid funds to finance liability and capital management;
-- Mitigate exposure to changes in interest and foreign exchange rates;
-- Assume measured credit risk in line with agreed guidelines; and
-- Invest the Group's surplus in line with agreed guidelines.
The ALM return represents the change in value to the Group
statement of financial position from investment activities after
taking into account the unwinding of the discount and fees. The
discount is unwound over the lives of the portfolios, which
represents a charge to the income statement and actual investment
income is measured against this to ensure that it remains
appropriate to continue to discount at the chosen rate.
The risk carriers' net loss of $6.2 million (2011: loss of $32.0
million), excluding taxation which is subject to group relief and
any intergroup fees which are eliminated on consolidation, is
summarised below:
Group risk carriers Associate
------ ---- ----------------------------------------------------- -----------
HIR 31
KX ICG OX Group Total Dec
Re PXRE (1) Re QX Re (2) Group CX Re 2012 31 Dec 2011 (3)
$m $m $m $m $m $m $m $m $m $m
-------------------- ------ -------- ------ ------ ------- ------ ---------- ----------- ------- -----------------------
Results
ALM results 0.6 - 1.0 0.1 1.9 0.2 3.8 2.0 5.8 (1.3)
Premium and other
income 2.8 (0.6) 0.2 - - 0.1 2.5 (0.1) 2.4 4.6
Liability management (1.7) 4.0 0.2 - (15.8) 1.4 (11.9) (1.5) (13.4) (32.5)
Other 0.1 0.8 (0.4) (0.2) (0.4) (0.3) (0.4) (0.6) (1.0) (2.8)
------ -------- ------ ------ ------- ------ ---------- ----------- ------- -----------------------
Group profit/(loss) for
the year 1.8 4.2 1.0 (0.1) (14.3) 1.4 (6.0) (0.2) (6.2) (32.0)
Group relief payment of
surrendered losses (2.0) (0.1) (2.1) 0.6 (1.5) -
Intergroup fees
eliminated on
consolidation (1.5) - - - - - (1.5) (0.6) (2.1) (4.5)
------ -------- ------ ------ ------- ------ ---------- ----------- ------- -----------------------
Segmental profit/(loss)
for the year (1.7) 4.1 1.0 (0.1) (14.3) 1.4 (9.6) (0.2) (9.8) (36.5)
Capital extracted - - - (2.4) - - (2.4) - (2.4) (22.8)
(1) ICG includes the results of ICL and ICE.
(2) HIR Group includes the results of HIR and PIR.
(3) The 31 December 2011 comparative excludes the profit of
$20.9 million recognised following the set-up of QX Re.
This division has experienced losses of $6.2 million during the
year due mainly to volatility on liability management. A dividend
of$2.4 million was paid by OX Re during the year.
The table below illustrates the risk carriers' assets and
liabilities:
Group risk carriers Associate
----- ----- ------------------------------------------------------------------------------------------------------------ --------------
KX HIR Total
Re PXRE ICG OX Re QX Re Group Group CX Re
31 Dec 2012 $m $m $m $m $m $m $m $m
-------------- ---------------------- --------------- --------------- ---------------- --------------- ------- -------------- --------------
Cash and
investments 54.2 106.9 15.6 5.7 60.2 46.7 289.3 154.4
Average mean
term of 10.1 < 4 < 4 < 4 < 4 10.1 8.5
portfolio years years years years years years n/a years
Average effective
rate of
investment Not Not Not Not
return 1.95% discounted discounted discounted discounted 1.95% n/a 1.77%
Net insurance
liabilities
undiscounted (42.5) (9.5) (0.7) (0.3) (32.2) (25.1) (110.3) (105.1)
Net insurance
liabilities
discounted (35.0) (9.5) (0.7) (0.3) (32.2) (25.1) (102.8) (90.6)
Cumulative
dividends paid
to holding
company (75.0) (34.8) - (2.4) - - (109.8) -
31 Dec 2011 $m $m $m $m $m $m $m $m
-------------- ---------------------- --------------- --------------- ---------------- --------------- ------- -------------- --------------
Cash and
investments 66.3 122.2 29.5 8.1 78.7 n/a 304.8 178.0
Average mean
term of 10.3 8.5 < 4 < 4 < 4 8.5
portfolio years years years years years n/a n/a years
Average effective
rate of
investment Not Not Not
return 2.10% 1.91% discounted discounted discounted n/a n/a 1.97%
Net insurance
liabilities
undiscounted (48.4) (43.1) (11.6) (0.3) (38.7) n/a (142.1) (123.4)
Net insurance
liabilities
discounted (39.0) (36.7) (11.6) (0.3) (38.4) n/a (126.0) (104.5)
Cumulative
dividends paid
to holding
company (75.0) (34.8) - - - n/a (109.8) -
The business of KX Re comprises a collection of mature
portfolios of long-tail liabilities, including exposure to
asbestos, environmental and other latent claims. The Group's
objective for KX Re was to reduce the company's liabilities by
accelerating the natural run-off of the portfolio to enable the
extraction of capital with regulatory approval. Since acquisition
Tawa has extracted capital of $75.0 million from KX Re by way of
dividends to the holding company. In 2012, Tawa announced the sale,
subject to regulatory approval, of KX Re to Catalina. In 2012 the
investment return for KX Re, which includes the return on the
surplus, was $0.6 million more than the discount unwind (2011: $0.9
million more than the discount unwind). KX Re's contribution to the
Group's results was a loss of $1.7 million (2011: profit $1.7
million). This loss was due to claims deterioration of $1.7
million, group relief payment of surrendered tax losses of $2.0
million and expenses of $1.5 million being offset by debt purchase
income received of $2.8 million and favourable ALM returns of $0.6
million, as discussed above.
PXRE is mainly comprised of catastrophe exposures. In 2012 the
investment return for PXRE was in line with the discount unwind
(2011: $1.0 million less than the discount unwind). Since
acquisition Tawa has extracted $34.8 million from PXRE by way of
dividends to the holding company. This reflects the significant
progress made in reducing the volatility, achieved by de-scaling
the liability portfolios in this risk carrier. During the year PXRE
made a profit of $4.1 million (2011: loss $5.0 million). This
profit was primarily due to favourable movements on net claims
reserves of $4.0 million.
Island Capital Group ("ICG"), which comprises ICL and ICE, is an
insurance group with a specialist underwriting portfolio of trade
credit and political risk insurance business, which went into
run-off in November 2008 following the sale of its trade credit and
political risk insurance underwriting platform. ICG made a profit
of $1.0 million during the year (2011: loss $5.3 million). This
profit was primarily due to favourable ALM results of $1.0 million,
with an improvement in net claims reserves of $0.2 million being
offset by expenses.
OX Re is a small London market company which has been in run-off
since 1994, which Tawa acquired in 2011 for strategic reasons.
During the year OX Re made a loss of $0.1 million due to expenses
(2011: loss $0.5 million). A dividend of $2.4 million was paid by
OX Re during the year.
QX Re is a Bermudian regulated special purpose insurer which
Tawa set up in 2012. The company provides reinsurance coverage for
a book of lead paint exposure underwritten by Penn National and,
for a book of this nature, is considered short tail. QX Re has made
a loss of $14.3 million as a result of experiencing continuing
claims deterioration seen in the latter half of 2011 reflecting the
large upswing in the number of new claimants. The claims
deterioration of $15.8 million has been partially offset by
favourable ALM results of $1.9 million.
Since acquisition in April 2012, the HIR risk carriers have
contributed a profit of $1.4 million to the Group. This follows the
completion of an actuarial review undertaken in the year, which
identified a EUR5 million reduction against the reserves held. A
reduction of EUR1.3 million has been recognised locally by HIR,
with a further reduction of EUR2.0 million being recognised as a
fair value adjustment at acquisition by the Group.
The associate CX Re has a book of reinsurance contracts written
prior to August 2001, when the company ceased underwriting new
business. The company has consistently maintained a portfolio of
highly rated, readily realisable assets which broadly matches the
duration and currency of the liabilities, plus a substantial tax
asset, the recovery of which depends on the satisfactory resolution
of pending litigation with HMRC. In 2012 the investment return for
CX Re was $2.0 million in excess of the discount unwind (2011: $1.0
million less than the discount unwind). CX Re made a small loss of
$0.2 million in the year (2011: loss of $14.3 million), with the
deterioration in net discounted claims reserves of $1.5 million and
management fees $0.6 million being offset by the favourable ALM
result noted above.
Service providers
Tawa's servicing platform comprises income from both consulting
and outsourcing. Consulting typically refers to work provided
directly for its clients and the outsourcing division refers to
work Tawa does on behalf of clients on its operating platform.
This division comprises the results from the following service
companies, in which Tawa had the following interests at the
reporting date:
Place of incorporation (or registration)
Name of subsidiary and operation Portion of ownership interest
------------------------------------------ ------------------------------------------ ------------------------------
Pro Insurance Solutions Limited
("Pro") Great Britain 100%
Pro IS, Inc ("Pro IS") United States Delaware 100%
Tawa Consulting Limited ("TCL") Great Britain 100%
Chiltington group of companies
("Chiltington") (1) Various 100%
(1) Chiltington group of companies reported under this segment
comprises all entities listed in Note 40, with the exception of the
risk carriers HIR and PIR.
The service providers' net loss of $0.5 million, excluding any
taxation, is summarised below:
In accordance with the terms of the Pro sale and purchase
agreement, from 1 January 2010 the Group shares this segment's
after tax profits with Swiss Re on a 50/50 basis over the five
financial years to 31 December 2014, subject to a cumulative cap of
GBP12 million.
Pro (1) TCL Chiltington 31 Dec 2012 31 Dec 2011
$m $m $m $m $m
------------------- ------------------- ------------------ ------------ ------------------ ----------------------
Results
Revenue from
services 28.8 0.4 5.3 34.5 29.2
Other income 3.0 - - 3.0 3.8
Cost of services (31.7) (0.2) (6.1) (38.0) (27.0)
------------------- ------------------ ------------ ------------------ ----------------------
Group
profit/(loss) for
the year 0.1 0.2 (0.8) (0.5) 6.0
Taxation
eliminated under
Group relief 0.1 - - 0.1 (1.7)
------------------- ------------------ ------------ ------------------ ----------------------
Segmental
profit/(loss) for
the year 0.2 0.2 (0.8) (0.4) 4.3
Capital extracted (3.5) - 0.2 (3.3) (3.2)
(1) Pro includes the results of Pro and Pro IS.
A dividend of $3.5 million was paid by Pro during the period
(2011: $3.3 million).
A key focus within the division during the latter half of 2012
was to rationalise and reduce the cost base of the service
platform. The effect of measures taken including manpower reduction
and potential savings through identifying synergies within the
division following acquisition of Chiltington will offer future
financial savings.
Corporate division
This division incorporates corporate costs and Group overheads,
incubator costs, acquisition activities and financing resulting in
a loss of $12.3 million.
31 Dec 2012 31 Dec 2011
$m $m
----------------------------------------------- ------------- ------------------
Corporate costs
Tawa plc (4.8) (5.2)
Variable pay - (0.7)
Share based payment accrual (0.3) (0.4)
Holding company costs (0.2) (2.3)
Other 0.8 1.4
------------- ------------------
Total corporate costs (4.5) (7.2)
Incubator costs (7.0) (7.5)
Acquisition related costs
Acquisition related costs (0.2) (1.5)
Negative goodwill 0.3 1.5
------------- ------------------
Total acquisition related costs 0.1 -
Finance costs (3.2) (2.1)
Share of result in associate Asta Capital Ltd (1.2) -
------------- ------------------
Group loss for the year (15.8) (16.8)
Group tax relief received 1.4 1.7
Intergroup fees eliminated on consolidation 2.1 4.5
------------- ------------------
Segmental loss for the year (12.3) (10.6)
------------- ------------------
Corporate costs
Corporate costs, excluding any taxation and the investment in
incubators, were $4.5 million for the year (2011: $7.2
million).
Although Tawa's associate Asta Capital Limited returned a
trading profit for the period of $6.8 million, before finance costs
of $2.2 million, it reported an overall loss for the period of $3.5
million, of which Tawa has a 33.33% share. The main contributory
factors for this loss were fees in relation to the acquisition
being expensed and a one-off acquisition completion bonus payable
to executives and staff.
Tawa's investment in incubators
Tawa incubates new projects the Group is developing by providing
capital to carefully selected projects, while Pro provides the
operating platform (reporting, compliance and other support) to
develop these projects until they can operate as independent,
profitable businesses. Current incubation projects are:
-- The STRIPE(R) system, a proprietary web-based platform that
was launched in September 2010, allowing principal to principal
processing of claims and other post placement transactions between
ceding company and reinsurer;
-- Q360 Limited ("Q360"), a new London-based broking operation;
which was launched in February 2012 with Tawa providing the capital
backing. Q360 will initially operate within the business sectors of
onshore energy, property, binding authorities, professional
indemnity and non-recourse construction finance. Central to the
company's operational platform is the technology used, using
innovative processing software, as well as web-based products
giving an efficient binding authority facility. Tawa's subsidiary,
Pro, has been retained to provide Q360's post-placement services;
and
-- Lodestar Marine, an MGA set up by Tawa in 2011 to write
marine protection and indemnity insurance for vessels of a defined
tonnage. Lodestar Marine commenced writing business in September
2012.
A further investment of $7.0 million has been made in the
incubators during the current year (2011: $7.5 million). Q360 costs
are $2.9 million, Lodestar Marine costs are $3.2 million and
STRIPE(R) costs are $0.9 million. As this segment comprises the
development of new projects it is expected that the generation of
positive cash flows will take varying amounts of time.
Acquired company
Tawa's acquisition of Chiltington resulted in an immediate gain
in the income statement of $0.3 million in 2012.
Goodwill shown in the Statement of Financial Position, being the
excess of the cost of an acquisition over the fair value of the
assets and liabilities acquired, as at 31 December 2012 was $22.8
million (2011: $23.4 million). This goodwill has been allocated to
Tawa Management Limited, the incubators, and the Pro group of
companies. Goodwill is tested annually for impairment and no
impairment losses have been recognised in the current year (2011:
$nil).
Acquisition related costs for the year were $0.2 million.
Financing
The corporate division also contains the Group's financing
arrangements.
At the beginning of the year, the Group had an outstanding
balance of $27.2 million on the $50 million facility set up
originally to finance the creation of QX Re. A second facility was
set-up during the year and $24.1 million (GBP15.0 million) was
drawn down during 2012 to fund the Group's investment in its new
associate Asta, Chiltington and the incubators.
As part of the acquisition of ICG in 2010, the Group took on $10
million of that company's debentures repayable in 2035 with an
interest rate of LIBOR +3.75%.
The total Group debt at 31 December 2012 is $60.5 million (2011:
$36.6 million) which represents 33.9% of shareholders' funds (2011:
18.4%).
The finance costs in relation to these loans in 2012 were $3.2
million (2011: $2.1 million).
Consolidated income statement For the year ended 31 December
2012
31 Dec 2012 31 Dec 2011
Notes $m $m
----------------------------------------------------------------------- ------ ---------------------- -------------
Income from continuing operations
Insurance premium revenue (0.2) 58.6
Insurance premium ceded to reinsurers (0.1) (0.4)
Commission income 1.1 -
----------------------------------------------------------------------- ------ ---------------------- -------------
Net earned premium revenue 0.8 58.2
Revenue from consultancy, insurance and run-off services 7 33.0 35.4
Investment return 8 7.7 11.0
Other income 9 11.1 5.6
----------------------------------------------------------------------- ------ ---------------------- -------------
Income 51.8 52.0
Total income 52.6 110.2
----------------------------------------------------------------------- ------ ---------------------- -------------
Insurance claims and loss adjustment expenses 10 (9.3) (84.6)
Insurance claims and loss adjustment expenses recovered from
reinsurers 10 (2.6) 21.6
----------------------------------------------------------------------- ------ ---------------------- -------------
Net insurance claims (11.9) (63.0)
----------------------------------------------------------------------- ------ ---------------------- -------------
Total expenses (56.8) (53.3)
----------------------------------------------------------------------- ------ ---------------------- -------------
Results of operating activities before negative goodwill recognised (16.1) (6.1)
Negative goodwill recognised 40 0.3 1.5
----------------------------------------------------------------------- ------ ---------------------- -------------
Results of operating activities (15.8) (4.6)
Share of results of associates 27 (1.2) (1.8)
Finance costs 14 (5.0) (4.0)
----------------------------------------------------------------------- ------ ---------------------- -------------
Loss before taxation (22.0) (10.4)
Taxation 15 (0.3) 1.0
----------------------------------------------------------------------- ------ ---------------------- -------------
Loss for the year from continuing operations (22.3) (9.4)
Loss for the year from discontinued operations 16 (0.2) (12.5)
---------------------- -------------
Loss for the year 17 (22.5) (21.9)
----------------------------------------------------------------------- ------ ---------------------- -------------
Attributable to:
Owners of the Company (22.5) (21.6)
Non-controlling interests - (0.3)
---------------------- -------------
(22.5) (21.9)
----------------------------------------------------------------------- ------ ---------------------- -------------
Earnings per share
From continuing and discontinued operations
Basic: Ordinary shares (cents per share) 19 (20.22) (19.83)
Diluted: Ordinary shares (cents per share) 19 (20.22) (19.83)
----------------------------------------------------------------------- ------ ---------------------- -------------
From continuing operations
Basic: Ordinary shares (cents per share) 19 (20.04) (8.51)
Diluted: Ordinary shares (cents per share) 19 (20.04) (8.51)
----------------------------------------------------------------------- ------ ---------------------- -------------
Consolidated statement of comprehensive income For the year
ended 31 December 2012
31 Dec 2012 31 Dec 2011
Notes $m $m
--------------------------------------------------------------- ------ ------------- -------------
Loss for the year (22.5) (21.9)
Other comprehensive losses 32
Items that may be reclassified subsequently to profit or loss
Currency translation differences 0.6 (0.8)
--------------------------------------------------------------- ------ ------------- -------------
0.6 (0.8)
Total comprehensive losses for the year (21.9) (22.7)
--------------------------------------------------------------- ------ ------------- -------------
Attributable to:
Owners of the Company (21.9) (22.4)
Non-controlling interests - (0.3)
--------------------------------------------------------------- ------
(21.9) (22.7)
--------------------------------------------------------------- ------ ------------- -------------
Consolidated statement of financial position As at 31 December
2012
31 Dec 2012 31 Dec 2011
Notes $m $m
------------------------------------------------------- ------ ------------- -------------
Assets
Cash and cash equivalents 20 57.0 44.7
Financial assets - investments 21 249.9 267.1
Loans and receivables including insurance receivables 22 59.0 56.5
Reinsurers' share of technical provisions 23 27.9 46.3
Property, plant and equipment 24 1.6 2.1
Deferred assets 25 48.7 53.8
Interest in associates 27 13.9 4.9
Other intangible assets 28 1.1 1.3
Goodwill 29 22.8 23.4
Total assets 481.9 500.1
------------------------------------------------------- ------ ------------- -------------
Equity
Share capital 30 22.2 22.2
Share premium 31 110.6 111.4
Other reserves 32 3.4 (0.2)
Retained earnings 33 41.3 63.8
------------------------------------------------------- ------ ------------- -------------
Equity attributable to owners of the Company 177.5 197.2
Non-controlling interests 1.0 1.0
Total equity 178.5 198.2
------------------------------------------------------- ------ ------------- -------------
Liabilities
Creditors arising out of insurance operations 34 71.2 58.9
Other liabilities 35 41.0 29.4
Financial liabilities - borrowings 36 60.5 36.6
Technical provisions 23 130.7 177.0
Total liabilities 303.4 301.9
------------------------------------------------------- ------ ------------- -------------
Total liabilities and equity 481.9 500.1
------------------------------------------------------- ------ ------------- -------------
Consolidated statement of changes in equity As at 31 December
2012
Share based
Share premium payments Own shares Translation Retained Non-controlling Total
Share capital reserve reserve reserve reserve earnings Total interests equity
$m $m $m $m $m $m $m $m $m
--------------- --------------- ---------------- ---------------- ------------- ------------------- ---------------- ------- ----------------- --------
Balance at 1
January 2011 22.2 111.4 3.2 (1.1) (0.5) 89.8 225.0 1.3 226.3
Comprehensive
income
Loss for the
year - - - - - (21.6) (21.6) (0.3) (21.9)
Other comprehensive loss
Currency
translation
differences - - - - (0.8) - (0.8) - (0.8)
Total
comprehensive
income for
the year - - - - (0.8) (21.6) (22.4) (0.3) (22.7)
--------------- --------------- ---------------- ---------------- ------------- ------------------- ---------------- ------- ----------------- --------
Transactions
with owners
Share based
payments - - 0.5 - - - 0.5 - 0.5
Dividends paid - - - - - (4.4) (4.4) - (4.4)
Own shares
acquired in
the period - - - (1.5) - - (1.5) - (1.5)
Total
transactions
with owners - - 0.5 (1.5) - (4.4) (5.4) - (5.4)
--------------- --------------- ---------------- ---------------- ------------- ------------------- ---------------- ------- ----------------- --------
Balance at 31
December 2011 22.2 111.4 3.7 (2.6) (1.3) 63.8 197.2 1.0 198.2
--------------- --------------- ---------------- ---------------- ------------- ------------------- ---------------- ------- ----------------- --------
Balance at 1
January 2012 22.2 111.4 3.7 (2.6) (1.3) 63..8 197.2 1.0 198.2
Comprehensive
income
Loss for the
year - - - - - (22.5) (22.5) - (22.5)
Currency
translation
differences - - - - 0.6 - 0.6 - 0.6
Total
comprehensive
loss for the
year - - - - 0.6 (22.5) (21.9) - (21.9)
--------------- --------------- ---------------- ---------------- ------------- ------------------- ---------------- ------- ----------------- --------
Transactions
with owners
Issue of share
capital 0.4 1.4 - - - - 1.8 - 1.8
Share based
payments - - 0.4 - - - 0.4 - 0.4
Dividends paid - - - - - - - - -
Own shares
cancelled in
the period (0.4) (2.2) - 2.6 - - - - -
Total
transactions
with owners - (0.8) 0.4 2.6 - - 2.2 - 2.2
--------------- --------------- ---------------- ---------------- ------------- ------------------- ---------------- ------- ----------------- --------
Balance at 31
December 2012 22.2 110.6 4.1 - (0.7) 41.3 177.5 1.0 178.5
--------------- --------------- ---------------- ---------------- ------------- ------------------- ---------------- ------- ----------------- --------
Consolidated statement of cash flows For the year ended 31
December 2012
31 Dec 2012 31 Dec 2011
Notes $m $m
------------------------------------------------------------------------------- ------- ------------- -------------
Net cash (used in)/generated by operations 37 (76.4) 25.9
------------------------------------------------------------------------------- ------- ------------- -------------
Investing activities
Cash payments to acquire debt securities (318.4) (1,144.8)
Cash receipts from sale or maturity of debt securities 368.1 1,113.1
Cash transferred from investing activities 8.3 (3.7)
Cash receipts from interest 7.8 6.8
Purchases of property, plant and equipment (0.1) (1.0)
Acquisition of investment in an associate (10.1) -
Acquisition of subsidiary net of cash and cash equivalents 40 9.1 2.4
------------------------------------------------------------------------------- -------
Cash generated by/(used in) investing activities 64.7 (27.2)
------------------------------------------------------------------------------- ------- ------------- -------------
Financing activities
Dividends paid - (4.4)
Own shares purchased - (1.5)
Proceeds from financial borrowings 24.1 27.6
Repayments of financial borrowings - (24.1)
------------------------------------------------------------------------------- -------
Cash flows generated by/(used in) financing activities 24.1 (2.4)
------------------------------------------------------------------------------- ------- ------------- -------------
Net increase/(decrease) in cash and cash equivalents 12.4 (3.7)
Cash and cash equivalents at beginning of year 44.7 48.5
Effects of exchange rate changes on the balance of cash held in foreign
currencies (0.1) (0.1)
Cash and cash equivalents at end of year 57.0 44.7
------------------------------------------------------------------------------- ------- ------------- -------------
Notes to the consolidated financial statements For the year
ended 31 December 2012
General information
The financial information set out in the announcement does not
constitute the Company's statutory accounts for the years ended 31
December 2012 or 2011. The financial information for the year ended
31 December 2011 is derived from the statutory accounts for that
year which have been delivered to the Registrar of Companies. The
auditors reported on those accounts; their report was unqualified,
did not draw attention to any matters by way of emphasis without
qualifying their report and did not contain a statement under
s498(2) or (3) Companies Act 2006. The audit of the statutory
accounts for the year ended 31 December 2012 is not yet complete.
These accounts will be finalised on the basis of the financial
information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies in
advance of the Company's annual general meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR NKDDBOBKDBNB
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