FBH Fbd Holdings Plc

RNS Number:3385T
FBD Holdings PLC
29 April 2008



                          INTERIM MANAGEMENT STATEMENT

FBD Holdings plc ("FBD" or the "Company") is issuing the following Interim
Management Statement in accordance with the reporting requirements of the
Transparency (Directive 2004/109/EC) Regulations, 2007 which will be read by the
Chairman at the Company's Annual General Meeting to be held in Dublin at 12.00
noon today.

                                 REVIEW OF 2007

I am very pleased to report that 2007 was another year of significant progress
for the FBD Group and one in which our continuing commitment to optimising
returns to shareholders was further demonstrated.

Operating profit for the year amounted to Euro235.5 million. This benefited from
releases from claims reserves of Euro107.6 million consequent to the revision of
the Group's claims reserving policy. This revision was implemented by your Board
in light of the improvement in the claims environment as a result of reforms
undertaken in recent years including legislative changes, the introduction of
penalty points and PIAB. The reserve release contributed Euro94.2 million to profit
after taxation and we are proposing to distribute this to shareholders by way of
a special dividend. Following changes made in the 2008 Irish Finance Act
affecting the taxation treatment of dividends to corporate shareholders, the
board is considering the most tax effective manner of distributing this amount
to all shareholders before finalising the timing of the payment.

Gross written premiums amounted to Euro408 million, up 0.2% in a highly competitive
marketplace. Premium income in the Irish insurance market fell, in total, by
5.8%. FBD's market share grew to 11.3% from 10.7% in the prior year. This was
the seventh consecutive year in which we increased our market share.

We continued to strengthen our organisation and to invest in our people while
maintaining a low expense ratio relative to our competitors.. Our platform for
cost-efficient growth was also underpinned during the year with the speedy
establishment of our Support Centre in Mullingar. This facility has expanded our
capacity for personal lines insurance sales and has further enhanced our
customer service levels.

Our hotel and leisure property businesses in Ireland and Spain and our financial
services activities delivered results which were ahead of budget and the prior
year in what were particularly challenging markets.

Continued Delivery to Shareholders

2007 was another year of continued delivery and release of value to our
shareholders:

   * In June 2007 FBD made a special distribution of Euro176 million of capital
     to shareholders equating to Euro5.00 per share. This represented capital which
     was deemed by your Board to be surplus to the capital required to enable 
     the Group fulfill its ambitious development plans;
   * During the year FBD purchased over 1.9 million of our own shares, in the
     process returning a further Euro53 million to shareholders. The 2007 payouts
     bring the total for capital repatriations to shareholders since March 2005
     to Euro496 million;
   * The final dividend for 2007 which is recommended by the Board of 52 cent
     per share will bring the total for the year to 79.5 cent, an increase of 
     15% on the prior year. This brings the six year compound annual growth 
     rate for the ordinary dividend to 26.4%;
   * The average total shareholder return in the past five years has been
     48%.


                     GROUP PERFORMANCE DURING 2008 TO DATE

Underwriting

Price reductions have been a continuous feature of the Irish insurance market
for the past five years arising from both reforms in the claims environment and
from competition. These reductions have continued into 2008. The sustainability
of such pricing is questionable and we believe that the current market premium
for certain products does not provide an adequate return for capital.
Consequently, we expect the downward price trend in the market to be reversed.
In January of this year we implemented a range of single digit price increases
on specific products where rate changes were warranted. We are keeping the
pricing environment under constant review. Gross premiums written continue to be
in line with the corresponding period in 2007.

In the year to date reported personal injury incidence levels are similar to
2007. However our Property claims experience is somewhat worse than anticipated.

In February of 2008 the Group launched a new car insurance brand "No Nonsense"
Car Insurance in conjunction with Ryanair which is available through the
Internet only. The building of this brand in the Irish marketplace is underway.
Results to date have been encouraging.


Non-Underwriting

The challenging market conditions which prevailed during 2007 in our leisure and
property development businesses in Ireland and Spain and our financial services
businesses have continued into the current year.

The continuing turbulence and consequent downturn in financial markets during
2008 has had an impact on the performance of the capital fund. The capital fund
has now been converted entirely to cash.


Profit before taxation

The downturn in financial markets referred to above has also had an impact on
Short Term Fluctuations in Investment Return in the year to date, and
consequently on profit before taxation. This was greatly mitigated by the
Group's decision to reduce its exposure to equities during 2007.


                                    OUTLOOK

Underwriting

Indications are that premium rates will harden during the remainder of the year.
Our recent investment in people and infrastructure leaves us well positioned to
take advantage of such market conditions.

Significant new e-commerce developments and other initiatives to extend our
customer reach and engagement are well advanced and we are confident that they
will enhance our sales potential and our customer service levels. These
initiatives will ensure that we maintain our competitive cost advantage into the
future and leave us well geared to deal with changing market conditions.

We have capacity for further growth in our local offices with the introduction
of the Support Centre in Mullingar. Larger urban centres will provide additional
opportunities and we have increased staff numbers to capitalise on these. A new
initiative through the broker channel in Dublin and Cork is also in place.


Non-Underwriting

In our leisure and property development businesses in Ireland and Spain and our
financial services businesses in Ireland, Management remains focused on delivery
of both new marketing and sales initiatives and operational cost efficiencies to
ensure that these businesses meet their targets for the year.


                                   CORPORATE


Update on Eureko Approach

On 7 April 2008 the Board confirmed that it had received a preliminary approach
from Eureko B.V and, after due consideration, had concluded that the approach
was unclear, appeared to differentiate among shareholders and was highly
conditional.

On 28 April 2008 the Board confirmed that it had received further correspondence
from Eureko B.V. The Board reiterated that it had not received an offer or an
intention to make an offer. The Board advised that having considered all aspects
of the approach in conjunction with the Board's financial advisers, Goldman
Sachs International and Goodbody Corporate Finance, the Board had concluded that
the approach was entirely without merit and that accordingly the Board had
rejected this approach.

Yesterday, 29 April 2008 we noted the decision of Eureko B.V. to withdraw its
approach. I have to say that I am not surprised at their decision given that our
considered analysis of their approach failed to identify any commercial,
strategic or financial logic in their proposal and consequently would not have
been in the interests of shareholders.


Returns to Shareholders

I have outlined above the returns which FBD has continued to deliver to
shareholders. These demonstrate the ongoing commitment of your Board to
efficient capital management. They also reaffirm that the utilisation of capital
generated by the Group will be determined in the light of the capital needs
associated with the Group's development plans and in a manner consistent with
maximising returns to shareholders.


                       BOARD CHANGES DURING THE PAST YEAR

Philip Fitzsimons

It is with a deep sense of sadness that we mark the passing of our Chief
Executive, Philip Fitzsimons, who died suddenly on 20 April just past.

On behalf of the Board, Management, Staff and shareholders of FBD, I extend
deepest sympathy to Philip's wife Paula and his five children.  Philip was a
devoted family man and is a huge loss to them.

All of us in FBD know that Philip's contribution to the company has been
outstanding. He devoted his entire career to building FBD into one of Ireland's
most successful enterprises.  The energy, passion and vision he demonstrated
over 37 years will be missed by all of us. His unwavering integrity was an
inspiration to everyone associated with FBD.

During his time as Chief Executive there have been unparalleled shareholder
returns. FBD's share of the Irish market grew from 8.2% to 11.3% over this
period while policy numbers grew by 55%. A truly remarkable performance by any
standard.

Having worked closely with Philip over many years it was clear that his style of
leadership by example and personal pride in the company was infectious and drew
the very best out of everyone who worked with him. Through his vision and
constant drive for further growth and improvement he has left FBD in great shape
and well positioned for the future.


Joe Rea

I must sadly also refer to the death in June of last year of an esteemed Board
member, Mr. Joe Rea. Joe, a former President of the Irish Farmers' Association
served on the Board of FBD for many years and supported the Group's development
with enormous vigour and commitment.


Sean Dorgan

Sean Dorgan, former Chief Executive of IDA Ireland, was co-opted to the Board in
December last. I welcome Sean as a Director and look forward to the contribution
which he will, I have no doubt, make in the years ahead.


Andrew Langford - Interim Chief Executive

Your Board has appointed Andrew Langford as Interim Chief Executive. Andrew is a
Chartered Accountant and has been with the Group for 12 years. He was appointed
to the Board in 2003 as Group Finance Director. We are fortunate to have an
executive of Andrew's calibre to lead us through this challenging period.


                                   CONCLUSION

In conclusion I extend my sincerest thanks to my fellow Board members, to the
Management and Staff for their efforts and dedication in delivering another
excellent performance for the Group. With the talent, dedication and loyalty
throughout FBD I am confident that the Group will continue to develop
successfully. We have clear strategies for continued growth and we have a
strengthened platform and organisation in place to deliver on them.


For Reference                                        Telephone
FBD
Andrew Langford, Interim Chief Executive             +353 1 409 3208
Adrian Taheny, Director of Marketing and Sales


Murray Consultants
Joe Murray                                           +353 1 4980 300
Joe Heron

ENDS
             

             FBD Holdings plc  FBD House Bluebell Dublin 12 Ireland
             Registered in Dublin, Ireland Registered Number 135882



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