TIDMFBH
RNS Number : 4534H
FBD Holdings PLC
01 August 2019
FBD HOLDINGS PLC
1 August 2019
FBD HOLDINGS PLC
Half yearly Report
For the Six Months ended 30 June 2019
KEY HIGHLIGHTS
-- Gross Written Premium (GWP) EUR190m compared to EUR192m in 2018
-- Profit before tax of EUR39m
-- Disciplined underwriting in the face of strong competition
delivered excellent Combined Operating Ratio ("COR") of 82.5%;
driven by solid current year profitability, exceptionally benign
winter weather and prior year reserve release of EUR9m.
-- Investment income was EUR9m for the period (EUR1m in 2018) as
a result of the recent market rally
-- Continued progress in developing our business offering to all customers
o New business policy count growth increased 5% year on year
o New Farm product launched - environmental (pollution) cover is
a first in Irish market
o New advertising media campaign launched in April
o An Post Insurance partnership progressing well
2019 2018
FINANCIAL SUMMARY EUR000s EUR000s
Gross written premium 189,716 191,985
Underwriting profit 29,214 18,934
Profit before taxation 38,661 18,423
Loss ratio 56.4% 63.3%
Expense ratio 26.1% 25.3%
Combined operating ratio 82.5% 88.6%
Cent Cent
Basic earnings per share 97 46
Net asset value per share 896 800
-- GWP of EUR190m: (2018: EUR192m). Retention remains healthy
with increased new business in Commercial and Private Motor
-- Underwriting profit of EUR29.2m, EUR10.3m higher than 2018
(EUR18.9m) as a result of disciplined underwriting and benign
weather
-- Net profit before tax of EUR38.7m, compared to EUR18.4m in 2018
-- 2019 COR of 82.5% versus 88.6% in 2018. This includes prior
year reserve release of EUR8.8m (2018: EUR6.0m)
-- Positive investment income of EUR8.6m and a EUR14.0m gain in
Mark to Market (MTM) compared to losses in second half of 2018
emphasising the volatility of returns and the need for continued
underwriting discipline
-- Expense ratio of 26.1% is 0.8% percentage points higher year
on year predominately due to increased marketing and salary
costs
-- Strong growth in Net Asset Value per share to 896 cent from 800 cent in 2018.
Commenting on these results Fiona Muldoon, Group Chief
Executive, said:
"I am pleased to announce these strong 2019 half year results
reflecting our excellent underwriting discipline, an exceptionally
benign winter, some prior year reserve releases and supplemented by
strong investment returns in the period.
Our premium levels are down marginally due to strong competition
and modest rate decreases. FBD seeks to grow our business in the
face of strong competition but we are also committed to
underwriting discipline and to writing the risks we know and
understand.
Our litigation claims costs continue to increase. The average
cost of court awards, particularly for soft tissue injuries,
remains too high. Despite some judicial progress in limiting court
awards we have seen no meaningful progress on structural reform and
Irish businesses continue to be held to impossible standards in
personal injury cases.
We are committed to developing our business offering and we
recently launched our new Farm product. It offers additional cover
for pollution risks as well as extending public liability
protection. We will launch a flexible new small business product
soon that will suit many family owned businesses. FBD aims to be
the Irish insurer of choice in a crowded and competitive
market.
These strong results position us well to support our core
farming customer base amid the challenges posed by Brexit to the
Irish economy."
A presentation will be made to analysts at 9.00am today, a copy
of which will be available on our Group website
www.fbdgroup.com.
Enquiries Telephone
FBD
Michael Sharpe, Investor Relations +353 1 409 3962
Powerscourt
Jack Hickey +353 83 448 8339
About FBD Holdings plc ("FBD")
FBD is one of Ireland's largest property and casualty insurers,
looking after the insurance needs of farmers, consumers and
business owners. Established in the 1960s by farmers for farmers,
FBD has built on those roots in agriculture to become a leading
general insurer serving the needs of its direct agricultural, small
business and consumer customers throughout Ireland. It has a
network of 34 branches nationwide.
Forward Looking Statements
Some statements in this announcement are forward-looking. They
represent expectations for the Group's business, and involve risks
and uncertainties. These forward-looking statements are based on
current expectations and projections about future events. The Group
believes that current expectations and assumptions with respect to
these forward-looking statements are reasonable. However, because
they involve known and unknown risks, uncertainties and other
factors, which are in some cases beyond the Group's control, actual
results or performance may differ materially from those expressed
or implied by such forward-looking statements.
The following details relate to FBD's ordinary shares of EUR0.60
each which are publicly traded:
Listing Euronext Dublin UK Listing Authority
Listing Category Premium Premium (Equity)
Trading Venue Euronext Dublin London Stock Exchange
Market Main Securities Market Main Market
ISIN IE0003290289 IE0003290289
Ticker FBD.I or EG7.IR FBH.L
OVERVIEW
The half year results for 2019 demonstrate solid underlying
profitability and also benefit from the performance of investment
markets, benign weather and prior year reserve releases. The profit
before tax was EUR38.7m. We paid a dividend of EUR17.7m in May in
respect of 2018 results.
Premium growth has not materialised as we operate in an
increasingly competitive environment despite new business growth
and high retention levels. We continue to focus on underwriting
discipline and writing risks we know and understand.
The Group reported profit before tax of EUR38.7m (2018:
EUR18.4m) including an underwriting profit of EUR29.2m (2018:
EUR18.9m) and a gross written premium decrease of 1% to EUR189.7m
(2018: EUR192.0m).
UNDERWRITING
Premium income
Gross written premium decreased EUR2.3m to EUR189.7m (2018:
EUR192.0m). There were premium reductions in all channels with the
exception of the broker channel which increased marginally.
New business volumes increased by 5% on the first half of 2018.
Retention remains satisfactory as we leverage our loyal customer
relationships and quality products.
Reinsurance
The same reinsurance programme is in place in 2019 as 2018. This
programme limits our exposure to adverse weather events. We have
also achieved some modest reductions in reinsurance rates compared
to 2018 reflecting the strong underwriting result improvement in
more recent years.
Claims
Net claims incurred reduced by EUR10.4m to EUR94.3m (2018:
EUR104.7) primarily due to benign weather in 2019 and prior year
reserve releases of EUR8.8m compared to EUR6.0m in 2018. Positive
prior year reserve releases are coming from accident years 2014 to
2018 while some stability has led to improved settlements.
The average frequency of claims has reduced because of the
absence of a major storm and better underwriting of risk. Increased
labour costs continue to drive increases in the cost of property
claims.
The Motor Insurers Bureau of Ireland (MIBI) and Motor Insurers
Insolvency Compensation Fund (MIICF) levies were EUR6.2m (2018:
EUR2.1m). The 2018 figure is net of an over-accrual of EUR1.8m in
2017 due to the later than anticipated introduction of the MIICF
levy.
Claims Environment
Limited progress has been made on reform of the claims
environment. There continues to be a very high level of
compensation paid for soft tissue injuries in Irish courts.
FBD has contributed to a public and political debate advocating
for claims reform in order to reduce the cost of insurance. FBD has
submitted data for inclusion in the National Claims Information
Database and for various government reports. FBD has assisted with
the first stage of the Motor Third Party Liability (MTPL) insurance
database and is in the process of implementing amended non-life
renewal regulations which will provide additional information to
customers on renewal of their insurance policies. While improving
customer transparency none of these initiatives address the
underlying issue of personal injury (and in particular, soft
tissue) award levels.
However FBD notes certain progress on awards to date which we
expect to have some limited impact on the cost of claims
including:
-- The Court of Appeal overturned a number of cases citing the
Byrne v Ardenhealth Company ruling. This case requires the
exercising of reasonable care by individuals for their own personal
safety and should assist businesses who are being held to
unreasonably high standards in personal injury cases
-- The PIAB (Amendment) Act enacted in April attempts to address
the non-co-operation of claimants and their legal representatives
including failure to attend medical examinations, failure to
cooperate with experts etc. Claimants can now incur penalties in
respect of legal costs but only at the judge's discretion
-- The Civil Liability & Courts Act has been amended to
reduce the timeframe of notification of a claim to a defendant from
2 months to 1 month. This will assist claims defence
-- A second amendment to the Civil Liability & Courts Act
currently in the Oireachtas if passed would allow a claim to be
dismissed if a claimant's affidavit is false or misleading. The
claimant could also be referred to the DPP at the judge's
discretion
-- A section of the Judicial Council Bill was passed that will
enable the establishment of a Personal Injuries Guidelines
Committee to provide guidelines on soft tissue injuries. If this
happens and if the guidelines are followed by judiciary we believe
we would see award levels fall.
However further action is outstanding on other issues:
-- Use the new Bill to provide and implement guidelines to
address the level of soft tissue injury awards
-- Reform the legal system to speed up litigation and reduce costs
-- Enshrine pre-action protocol in legislation to fast-track
rejected Injuries Board awards through a more simplified litigation
process
-- Establish a fully functioning integrated insurance fraud database to detect patterns of fraud
-- Make gross exaggeration an offence
-- Establish and resource a Garda fraud investigation unit.
In addition and on the other hand it should be noted that the
Consumer Contracts Bill, currently before the Oireachtas, proposes
a number of changes which will make it more difficult for insurers
to repudiate exaggerated claims and consequently risks increasing
the cost of claims further.
Weather, Claims Frequency and Large Claims
No weather events of note occurred in the period. 2019 weather
to date has been benign compared to the major snow - Storm Emma in
March 2018.
There was a modest reduction in Motor injury frequency in H1
2019. Employer's Liability claims frequency is being monitored
closely as the upward trend continues driven largely by economic
activity.
The average number of large casualty claims has been redefined
as greater than EUR250k. At 30 June 2019 the number of such claims
is in line with the average number reported in the previous 7
years. The average estimated cost after 6 months is lower than the
average cost at the same period in the previous 7 years. It should
be noted that the number and size of large claims can vary greatly
from year to year and the cost of an individual large claim can
vary significantly over the lifetime to settlement.
Expenses
The Group's expense ratio was 26.1% (2018: 25.3%). Other
underwriting expenses were EUR43.7m, an increase of EUR1.8m. The
increase is driven mainly by increased marketing spend in a highly
competitive environment and increased salary costs.
GENERAL
FBD's Combined Operating Ratio ("COR") was 82.5% (2018:
EUR88.6%) generating an underwriting profit of EUR29.2m (2018:
EUR18.9m).
Investment Return
FBD's total annualised investment return for the first six
months of 2019 was 4.3% (2018: -0.4%). Annualised investment income
is 1.6% (2018: 0.3%) and annualised MTM 2.7% (2018: -0.7%) in Other
Comprehensive Income (OCI). This reflects the rally in investment
markets in early 2019 following losses in Q4 2018. The positive MTM
is driven by credit spreads narrowing on the corporate bond
portfolio and reducing interest rates as lower-for-longer
accommodative monetary policy is implemented by the ECB. Risk
assets delivered positive returns partly as a result of
geo-political stabilisation particularly between the US and
China.
A large decrease in the discount rate has not impacted the
pension surplus significantly as the assets and liabilities are
reasonably well matched. This is a positive result of the
structural changes made to the pension scheme in 2015 and 2016.
Financial Services
The Group's financial services operations returned a profit
before tax of EUR2.1m for the period (2018: EUR1.4m). Revenue
increased by EUR0.2m while costs decreased from EUR3.2m to EUR2.7m
as a result of lower legal expenses in FBD Holdings plc.
Profit per share
The diluted profit per share was 95 cent per ordinary share,
compared to 44 cent per ordinary share in 2018.
Dividend
The shareholders approved the final dividend proposed by the
Board for 2018 at the Annual General Meeting on 10 May 2019 and a
dividend of EUR17.7m was paid on 17 May 2019 in respect of 2018
results.
The Group dividend policy targets an annual pay-out range of 20%
to 50% of full year profits when appropriate given the inherent
cyclicality of all insurance businesses.
STATEMENT OF FINANCIAL POSITION
Capital position
Ordinary shareholders' funds at 30 June 2019 amounted to
EUR311.7m (December 2018: EUR283.5m). The increase in shareholders'
funds is driven by the following:
-- Profit after tax for the half year of EUR33.8m
-- Mark to market gains on Available for Sale investments of EUR12.3m after tax
-- EUR17.7m reduction due to the dividend and an increase of EUR1.2m due to share based payment
-- A decrease in the defined benefit pension scheme surplus of EUR1.4m
Net assets per ordinary share are 896 cent, compared to 818 cent
per share at 31 December 2018.
Investment Allocation
The Group has a conservative investment policy that ensures that
its technical reserves are matched by cash and fixed interest
securities of similar nature and duration. FBD has increased its
allocation to Risk Assets modestly over the first 6 months of 2019
in line with the company's Strategic Asset Allocation and increases
in shareholders' funds.
The allocation of the Group's underwriting investment assets is
as follows:
30 June 2019 31 December 2018
EURm % EURm %
Corporate bonds 507 47% 498 48%
Government bonds 304 28% 297 29%
Deposits and cash 152 14% 146 14%
Equities 31 3% 24 2%
Investment property 18 2% 18 2%
Other risk assets 59 6% 55 5%
1,071 100% 1,038 100%
-------- ------ ---------- --------
Solvency
The audited Solvency Capital Ratio (SCR) of 165% at 31 December
2018 as reported in the Solvency and Financial Condition Report.
The Group is committed to maintaining a strong solvency
position.
Risks and uncertainties
The principal risks and uncertainties faced by the Group are
outlined on pages 18-24 of the Group's Annual Financial Statements
for the year ended 31 December 2018 and remain unchanged for the
next six months.
OUTLOOK
The half year results for 2019 are strong driven by disciplined
underwriting, a rebound in investment markets, a good winter and
prior year reserve releases. Despite new business growth, overall
premium levels are down modestly reflecting a difficult competitive
environment including aggressive competition and sustained price
pressure.
The Group has a clear strategy that will deliver sustainable
growth in book value through a customer centred approach,
underwriting discipline and careful risk selection. The combined
operating ratio of 82.5% reflects that underwriting discipline.
The claims environment continues to moderate although inflation
is still present. We continue to call for substantive reform in the
level of personal injury awards and a rebalancing of personal
responsibility vis à vis the impossible standards small businesses
are held to in injury cases. FBD continues to tackle fraud and
exaggerated claims to help but soft-tissue injury awards must come
down for real progress to be made.
Brexit uncertainty continues and we view a hard Brexit as
negative for Ireland's farm and agri industry particularly and
rural Ireland generally. Our business is planning for some limited
operational impacts that may arise to support the continuing needs
of our customers.
The Group targets a COR in the low 90's (absent exceptional
weather) and a low double-digit return on equity (ROE) through the
cycle. Given the strong performance in the first six months of this
year underpinned by a number of one-offs and assuming a more
normalised second half, the Group expects that the full year 2019
ROE will be mid to high teens.
FBD HOLDINGS PLC
Condensed Consolidated Income Statement
For the half year ended 30 June 2019
Half year Half year Year ended 31/12/18 (audited)
ended ended
30/06/19 30/06/18
Notes (unaudited) (unaudited)
EUR000s EUR000s EUR000s
Revenue 3 202,062 204,261 396,003
------------- ------------- ------------------------------
Income
Gross premium written 189,716 191,985 371,504
Reinsurance premiums (16,104) (20,260) (36,735)
------------- ------------- ------------------------------
Net premium written 173,612 171,725 334,769
Change in provision for unearned premiums (6,405) (6,215) 3,134
------------- ------------- ------------------------------
Net premium earned 167,207 165,510 337,903
Net investment return 8,627 1,297 2,482
Financial services income - Revenue from contracts with
customers 1,905 2,026 3,754
- Other
financial
services
income 2,873 2,522 5,282
------------- ------------- ------------------------------
Total income 180,612 171,355 349,421
Expenses
Net claims and benefits (88,139) (102,596) (183,367)
Other underwriting expenses 4 (43,699) (41,873) (84,054)
Movement in other provisions (6,155) (2,107) (7,064)
Financial services and other costs (2,673) (3,163) (6,548)
Revaluation of property, plant and equipment - - (1,034)
Finance costs (1,285) (3,193) (5,453)
Exceptional loss on purchase and cancellation of
convertible debt - - (11,836)
Profit before taxation 38,661 18,423 50,065
Income taxation charge (4,860) (2,308) (7,682)
------------- ------------- ------------------------------
Profit for the period 33,801 16,115 42,383
------------- ------------- ------------------------------
Attributable to:
Equity holders of the parent 33,801 16,115 42,383
FBD HOLDINGS PLC
Condensed Consolidated Income Statement
For the half year ended 30 June 2019
Half year Half year
ended ended 30/06/18 Year ended 31/12/18 (audited)
30/06/19 (unaudited)
(unaudited)
Notes
Earnings per Cent Cent Cent
share
Basic 7 97 46 122
---------------- ------------------- -------------------------------
Diluted 7 95(1) 44(2) 112(3)
---------------- ------------------- -------------------------------
(1) Diluted earnings per share reflects the potential vesting of
the share based payments.
(2) Diluted earnings per share reflects the potential conversion
of the convertible debt and share based payments.
(3) Diluted earnings per share reflects the potential conversion
of the convertible debt up until the date of purchase and
cancellation of the convertible debt and the potential vesting of
the share based payments.
FBD HOLDINGS PLC
Condensed Consolidated Statement of Comprehensive Income
For the half year ended 30 June 2019
Half year Half year Year ended
ended 30/06/18 31/12/18
(audited)
ended 30/06/19 (unaudited)
(unaudited)
EUR000s EUR000s EUR000s
Profit for the period 33,801 16,115 42,383
----------------- ----------------- ------------
Items that will or may be reclassified
to profit or loss in subsequent
periods:
Net gain/(loss) on available for
sale assets 14,007 (3,474) (7,845)
Taxation (charge)/credit relating
to items that will or may be reclassified
to profit or loss in subsequent
periods (1,751) 434 981
Items that will not be reclassified
to profit or loss in subsequent
periods:
Actuarial (loss)/gain on retirement
benefit obligations (1,544) 1,002 3,232
Taxation credit/(charge) relating
to items not to be reclassified
in subsequent periods 193 (125) (404)
----------------- ----------------- ------------
Other comprehensive income/(expense)
after taxation 10,905 (2,163) (4,036)
----------------- ----------------- ------------
Total comprehensive income for the
period 44,706 13,952 38,347
----------------- ----------------- ------------
Attributable to:
Equity holders of the parent 44,706 13,952 38,347
FBD HOLDINGS PLC
Condensed Consolidated Statement of Financial Position
At 30 June 2019
ASSETS 30/06/19 30/06/18 31/12/18
(unaudited) (unaudited) (audited)
Notes EUR000s EUR000s EUR000s
Property, plant and equipment 67,297 66,093 68,492
Intangible assets 1,159 - 355
Investment property 17,500 18,000 18,310
Right of use asset 6,500 - -
Loans 598 574 615
Deferred taxation asset 1,224 4,167 1,081
Financial assets
Available for sale investments 811,807 744,224 795,717
Investments held for trading 89,079 81,228 78,778
Deposits with banks 50,000 178,286 70,998
------------- ------------- -----------
950,886 1,003,738 945,493
------------- ------------- -----------
Reinsurance assets
Provision for unearned premiums 2 6 6
Claims outstanding 78,432 93,326 80,919
------------- ------------- -----------
78,434 93,332 80,925
------------- ------------- -----------
Retirement benefit surplus 11,400 10,900 12,944
Current taxation asset 3,949 3,934 3,949
Deferred acquisition costs 32,356 31,621 31,956
Other receivables 74,058 68,518 62,868
Cash and cash equivalents 106,195 35,572 77,639
------------- ------------- -----------
Total assets 1,351,556 1,336,449 1,304,627
------------- ------------- -----------
FBD HOLDINGS PLC
Condensed Consolidated Statement of Financial Position
(continued)
At 30 June 2019
EQUITY AND LIABILITIES 30/06/19 30/06/18 31/12/18 (audited)
(unaudited) (unaudited)
Notes EUR000s EUR000s EUR000s
Equity
Ordinary share capital 6 21,409 21,409 21,409
Capital reserves 21,608 20,225 20,430
Retained earnings 268,638 217,609 241,645
Other reserves - 18,232 -
Equity attributable to ordinary equity holders of
the parent 311,655 277,475 283,484
Preference share capital 2,923 2,923 2,923
------------- ------------- -------------------
Total Equity 314,578 280,398 286,407
Liabilities
Insurance contract liabilities
Provision for unearned premiums 189,276 192,225 182,875
Claims outstanding 731,442 765,091 738,025
------------- ------------- -------------------
920,718 957,316 920,900
Other provisions 11,945 7,331 7,738
Convertible debt - 53,268 -
Subordinated debt 49,455 - 49,426
Lease liability 6,558 - -
Deferred taxation liability 5,138 4,543 3,610
Current taxation liability 6,895 - 3,312
Payables 36,269 33,593 33,234
-------------
Total liabilities 1,036,978 1,056,051 1,018,220
------------- ------------- -------------------
Total equity and liabilities 1,351,556 1,336,449 1,304,627
------------- ------------- -------------------
FBD HOLDINGS PLC
Condensed Consolidated Statement of Cash Flows
For the half year ended 30 June 2019
Half year Half year ended 30/06/18 Year
ended (unaudited) ended 31/12/18 (audited)
30/06/19
(unaudited)
EUR000s EUR000s EUR000s
Cash flows from operating
activities
Profit before taxation 38,661 18,423 50,065
Adjustments for:
(Profit)/Loss on investments held
for trading (5,942) 1,960 4,411
Exceptional loss on purchase and
cancellation of convertible bond - - 11,836
Loss on investments available for
sale 2,153 2,368 4,825
Interest and dividend income (4,165) (3,675) (12,072)
Depreciation/amortisation of
property, plant and equipment and
intangible assets 4,955 6,125 11,682
Depreciation of right of use 386 - -
asset
Share-based payment expense 1,177 499 704
Revaluation of investment property 810 - (310)
Revaluation of property, plant and
equipment - - 1,034
Increase/(decrease) in insurance
contract liabilities 2,309 3,529 (20,480)
Increase in other provisions 4,207 684 1,091
Operating cash flows before
movement in working capital 44,551 29,913 52,786
(Increase)/decrease in receivables
and deferred acquisition costs (13,382) (6,927) 3,390
Increase in payables 4,316 5,994 7,883
Interest payments on convertible
debt - (2,450) (5,130)
Interest payments on (1,250) - -
subordinated debt
Lease obligation repayments (328) - -
and interest
Purchase of investments held for
trading (6,416) (82,916) (82,916)
Sale of investments held for
trading 2,057 45,075 45,075
-------------- -------------------------- ---------------------------
Cash generated from / (used in)
operations 29,548 (11,311) 21,088
Interest and dividend income
received 5,956 5,851 11,992
Income taxes paid (1,450) - -
-------------- -------------------------- ---------------------------
Net cash generated from operating
activities 34,054 (5,460) 33,080
-------------- -------------------------- ---------------------------
Cash flows from investing
activities
Purchase of available for sale
investments (95,748) (49,075) (138,798)
Sale of available for sale
investments 91,512 57,694 89,101
Purchase of property, plant and
equipment (3,709) (3,967) (13,003)
Sale of property, plant and
equipment - - 90
Purchase of intangible assets (855) - (399)
Decrease in loans and advances 17 107 66
Decrease in deposits invested with
banks 20,998 17,699 124,987
Net cash generated from investing
activities 12,215 22,458 62,044
-------------- -------------------------- ---------------------------
Cash flows from financing
activities
Ordinary and preference dividends
paid (17,713) (8,602) (8,602)
Purchase and cancellation of
convertible bond - - (86,059)
Proceeds from issue of
subordinated debt - - 50,000
Net cash used in financing
activities (17,713) (8,602) (44,661)
-------------- -------------------------- ---------------------------
Net increase in cash and cash
equivalents 28,556 8,396 50,463
Cash and cash equivalents at the
beginning of the period 77,639 27,176 27,176
Cash and cash equivalents at the
end of the period 106,195 35,572 77,639
-------------- -------------------------- ---------------------------
FBD HOLDINGS PLC
Condensed Consolidated Statement of Changes in Equity
(UNAUDITED)
For the half year ended 30 June 2019
Called up Capital Retained Other Attributable to Preference Total
share Reserves earnings Reserves Ordinary shareholders share equity
capital capital
presented
as equity
EUR000s EUR000s EUR000s EUR000s EUR000s EUR000s EUR000s
---------- --------- ------------------ -------------- ------------------------------------- ----------- ----------
Balance at 1
January 2019 21,409 20,430 241,645 - 283,484 2,923 286,407
Profit after
taxation - - 33,801 - 33,801 - 33,801
Other
comprehensive
income - - 10,905 - 10,905 - 10,905
21,409 20,430 286,351 - 328,190 2,923 331,113
Dividends paid
and approved
on ordinary
and
preference
shares - - (17,713) - (17,713) - (17,713)
Recognition of
share based
payments - 1,178 - - 1,178 - 1,178
Balance at
30 June 2019 21,409 21,608 268,638 - 311,655 2,923 314,578
---------- --------- ------------------ -------------- ------------------------------------- ----------- ----------
Balance at 1
January 2018 21,409 19,726 212,259 18,232 271,626 2,923 274,549
Profit after
taxation - - 16,115 - 16,115 - 16,115
Other
comprehensive
expense - - (2,163) - (2,163) - (2,163)
21,409 19,726 226,211 18,232 285,578 2,923 288,501
Dividends paid
and approved
on ordinary
and
preference
shares - - (8,602) - (8,602) - (8,602)
Recognition of
share based
payments - 499 - - 499 - 499
Balance at
30 June 2018 21,409 20,225 217,609 18,232 277,475 2,923 280,398
---------- --------- ------------------ -------------- ------------------------------------- ----------- ----------
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
Note 1 Statutory information
The half yearly financial information is considered
non-statutory financial statements for the purposes of the
Companies Act 2014 and in compliance with section 340(4) of that
Act we state that:
-- the financial information for the half year to 30 June 2019
does not constitute the statutory financial statements of the
company;
-- the statutory financial statements for the financial year
ended 31 December 2018 have been annexed to the annual return and
delivered to the Registrar;
-- the statutory auditors of the company have made a report
under section 391 Companies Act 2014 in respect of the statutory
financial statements for year ended 31 December 2018; and
-- the matters referred to in the statutory auditors' report
were unqualified, and did not include a reference to any matters to
which the statutory auditors drew attention by way of emphasis
without qualifying the report.
This half yearly financial report has not been audited but has
been reviewed by the auditors of the Company.
Note 2 - Accounting policies
Basis of preparation
The annual financial statements of FBD Holdings plc are prepared
in accordance with International Financial Reporting Standards
("IFRSs") as adopted by the European Union. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with IAS 34 'Interim Financial
Reporting', as adopted by the European Union.
Going concern
The Directors are satisfied that the Group has sufficient
resources to continue in operation for a period of not less than
twelve months from the date of this report. Accordingly, they
continue to adopt the going concern basis of accounting in
preparing the condensed financial statements.
Consistency of accounting policy
The accounting policies and methods of computation used by the
Group to prepare the interim financial statements for the six month
period ended 30 June 2019 are the same as those used to prepare the
Group Annual Report for the year ended 31 December 2018 except as
described below.
Standards adopted in the period
The Group applied a number of new or amended standards issued by
the International Accounting Standards Board (IASB) that are
mandatorily effective for an accounting period that begins on or
after 1 January 2019.
-- IFRS 16 Leases
-- IFRIC 23 Uncertainty over Income Tax Treatments
-- Amendments to IAS 19 Employee Benefits
The adoption of these standards has not had a material impact on
the Financial Statements of the Group. Further detail with respect
to IFRS 16 Leases is included below.
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
IFRS 16 Leases
IFRS 16 Leases became effective on 1 January 2019 and was
adopted by the Group on that date. The Group has applied the
modified retrospective approach and have not restated comparatives
for the 2018 reporting period, as permitted under the specific
transitional provisions in the standard.
On adoption of IFRS 16, the Group recognised a lease liability
and a right of use asset for each of the leases which had
previously been classified as 'operating leases' under the
principles of IAS 17 Leases. All leases are property leases.
The lease obligations were measured at the present value of the
remaining lease payments, discounted using the Group's Incremental
Borrowing Rate (IBR) as of 1 January 2019. The weighted average IBR
applied to the lease liabilities on 1 January 2019 was 4.41%.
The adjustments recognised on adoption of IFRS 16 from the date
of initial application are shown below:
Operating lease commitments disclosed as at 31 December 2018
EUR9.6m
Discounted using the Group's incremental borrowing rate at the
date of initial application EUR7.1m
Less short term leases recognised on a straight-line basis as
expense
(EUR0.2m)
Lease liability recognised as at 1 January 2019 EUR6.9m
The right of use assets were measured at the amount equal to the
lease liability, adjusted by the amount of any prepaid or accrued
lease payments relating to that lease recognised in the Statement
of Financial Position as at 31 December 2018. There were no onerous
lease contracts that would have required an adjustment to the
right-of-use assets at the date of initial application.
The Group has elected to apply the practical expedient permitted
by the standard to recognise operating leases with a remaining
lease term of less than 12 months as at 1 January 2019 as
short-term leases. The Group has also elected to apply the
practical expedient to use hindsight in determining the lease term
where the contract contains options to extend or terminate the
lease.
The adoption of IFRS 16 affected the following items on the
Statement of Financial Position on 1 January 2019:
Right of use asset EUR6.9m
Lease liability EUR6.9m
The adoption of IFRS 16 did not have a material impact on the
key metrics or alternative performance measures (APMs) of the
Group.
Standards and interpretations not yet effective
IFRS 17 Insurance Contracts(1)
IFRS 9 Financial Instruments(2)
(1) Effective for annual periods on or after 1 January 2022,
with earlier application permitted.
(2) Consolidated financial statements only. Effective for annual
periods on or after 1 January 2022, with earlier application
permitted.
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
IFRS 17 Insurance Contracts
IFRS 17 Insurance Contracts is effective for annual periods
beginning on or after 1 January 2022.
IFRS 17 is expected to have a material impact on the
Consolidated Financial Statements of the Group. There is a project
team in place and training has been provided on the impact of the
new standard. The Groups implementation programme is progressing in
line with expectations.
IFRS 9 Financial Instruments in respect of the Consolidated
Financial Statements is being considered as part of the project for
the adoption of IFRS 17 Insurance Contracts.
Critical accounting estimates and judgements in applying
accounting policies
The critical accounting estimates and judgements used by the
Group in applying accounting policies are the same as those used to
prepare the Group Annual Financial Statements for the year ended 31
December 2018. While there have been some changes in estimates of
amounts in the current financial period these changes do not have a
significant impact on the results for the period.
Note 3 - Segmental information
(a) Operating segments
The principal activities of the Group are underwriting of
general insurance business and financial services. For management
purposes, the Group is organised in two operating segments -
underwriting and financial services. The profit earned by each
segment is reported to the chief operating decision maker, the
Group Chief Executive, for the purpose of resource allocation and
assessment of segmental performance. Central administration costs
and Directors' salaries are allocated based on actual activity.
Restructuring costs and income taxation are direct costs of each
segment. Discrete financial information is prepared and reviewed on
a regular basis for these two segments. The accounting policies of
the reportable segments are the same as the Group accounting
policies. There has been no material change to the assets by
reportable segment from the disclosure in the 2018 Annual
Report.
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
The following is an analysis of the Group's revenue and results
from continuing operations by reportable segments:
Half year ended 30/06/2019 Financial
Underwriting Services Total
EUR000s EUR000s EUR000s
Revenue 197,284 4,778 202,062
--------------- ---------- --------
Result before taxation 36,556 2,105 38,661
Income taxation charge (4,570) (290) (4,860)
--------------- ---------- --------
Result after taxation 31,986 1,815 33,801
--------------- ---------- --------
Half year ended 30/06/2018 Financial
Underwriting Services Total
EUR000s EUR000s EUR000s
Revenue 199,713 4,548 204,261
--------------- ------------ --------
Profit before taxation 17,037 1,386 18,423
Income taxation charge (2,130) (178) (2,308)
--------------- ------------ --------
Result after taxation 14,907 1,208 16,115
--------------- ------------ --------
Year ended 31/12/2018 Financial
Underwriting Services Total
EUR000s EUR000s EUR000s
Revenue 386,967 9,036 396,003
--------------- ------------ --------
Profit before taxation 47,577 2,488 50,065
Income taxation charge (7,165) (517) (7,682)
--------------- ------------ --------
Result after taxation 40,412 1,971 42,383
--------------- ------------ --------
(b) Geographical segments
The Group's operations are located in Ireland.
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
Note 4 - Underwriting result
Half year Half year Year
ended 30/06/19
(unaudited)
ended ended
30/06/18 31/12/18
(unaudited) (audited)
EUR000s EUR000s EUR000s
Gross premium written 189,716 191,985 371,504
----------------- -------------- ------------
Net premium earned 167,207 165,510 337,903
Net claims incurred (88,139) (102,596) (183,367)
Motor Insurers Bureau of Ireland Levy (6,155) (2,107) (7,064)
----------------- -------------- ------------
72,913 60,807 147,472
----------------- -------------- ------------
Gross management expenses (43,129) (41,867) (84,220)
Deferred acquisition costs 400 254 590
Reinsurers' share of expenses 1,227 1,492 2,876
Broker commissions payable (2,197) (1,752) (3,300)
----------------- -------------- ------------
Other Underwriting expenses (43,699) (41,873) (84,054)
----------------- -------------- ------------
Underwriting result 29,214 18,934 63,418
----------------- -------------- ------------
The Group's half yearly results are not subject to any
significant impact arising from the seasonality of operations.
Note 5 - Dividends
Half Year Half Year Year
ended 30/06/19 ended 30/06/18
(unaudited) (unaudited) ended
31/12/18
(audited)
Paid: EUR000s EUR000s EUR000s
2018 dividend of 8.4 cent (2017: 8.4
cent) per share on 14% non-cumulative
preference shares of EUR0.60 each 113 113 113
2018 dividend of 4.8 cent (2017: 4.8
cent) per share on 8% non-cumulative
preference shares of EUR0.60 each 169 169 169
2018 final dividend of 50.0 cent (2017:
24.0 cent) per share on ordinary shares
of EUR0.60 each 17,431 8,320 8,320
---------------- --- ---------------- --- -----------
Total dividends paid 17,713 8,602 8,602
---------------- --- ---------------- --- -----------
2018 dividend payments were approved by the shareholders at the
Annual General Meeting on 10 May 2019 and paid on 17 May 2019.
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
Note 6 - Ordinary share capital
Half year Half year Year
ended 30/06/19 ended 30/06/18
(unaudited) (unaudited)
ended
31/12/18
(audited)
Number EUR000s EUR000s EUR000s
(i) Ordinary shares
of EUR0.60 each
Authorised:
At beginning and end
of period 51,326,000 30,796 30,796 30,796
------------ ---------------- ---------------- -----------
Issued and fully paid:
At beginning and end
of period 35,461,206 21,277 21,277 21,277
------------ ---------------- ---------------- -----------
(ii) 'A' Ordinary shares
of EUR0.01 each
Authorised:
At beginning and end
of period 120,000,000 1,200 1,200 1,200
------------ ---------------- ---------------- -----------
Issued and fully paid:
At beginning and end
of period 13,169,428 132 132 132
------------ ---------------- ---------------- -----------
Total Ordinary Share
Capital 21,409 21,409 21,409
---------------- ---------------- -----------
The number of ordinary shares of EUR0.60 each held as treasury
shares at 30 June 2019 was 598,742. At 31 December 2018 the number
held was 795,005.
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
Note 7 - Earnings per EUR0.60 ordinary share
The calculation of the basic and diluted earnings per share
attributable to the ordinary shareholders is based on the following
data:
Half year Half year Year
ended ended 30/06/18 ended 31/12/18
(audited)
30/06/19 (unaudited)
(unaudited)
EUR000s EUR000s EUR000s
Earnings
Profit for the period for the purpose
of basic earnings
per share 33,801 16,115 42,383
-------------- ---------------- ----------------
Profit for the period for the purpose
of diluted earnings
per share 33,801 18,909 46,639
-------------- ---------------- ----------------
Number of shares
Weighted average number of ordinary
shares for
the purpose of basic earnings per
share (excludes treasury shares) 34,770,837 34,666,201 34,666,201
Weighted average number of ordinary
shares for
the purpose of diluted earnings
per share (excludes treasury shares) 35,436,482 43,329,630 41,507,329
-------------- ---------------- ----------------
Cent Cent Cent
Basic earnings per share 97 46 122
-------------- ---------------- ----------------
Diluted earnings per share 95(1) 44(2) 112(3)
-------------- ---------------- ----------------
(1) Diluted earnings per share reflects the potential vesting of
the share based payments.
(2) Diluted earnings per share reflects the potential conversion
of the convertible debt and share based payments.
(3) Diluted earnings per share reflects the potential conversion
of the convertible debt up until the date of purchase and
cancellation of the convertible debt and the potential vesting of
the share based payments.
The 'A' ordinary shares of EUR0.01 each that are in issue have
no impact on the earnings per share calculation.
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
Note 8 - Retirement Benefit Surplus
The Group operates a funded defined benefit retirement scheme
for qualifying employees that is closed to future accrual and new
entrants.
The amounts recognised in the Statement of Financial Position
are as follows:
30/06/19 30/06/18 31/12/18
(unaudited) (unaudited) (audited)
EUR000s EUR000s EUR000s
Fair value of plan assets 103,400 97,900 96,378
Present value of defined benefit
obligation (92,000) (87,000) (83,434)
------------ ------------ ----------
Net retirement benefit surplus 11,400 10,900 12,944
------------ ------------ ----------
Note 9 - Financial Instruments and Fair Value Measurement
(a) Financial Instruments
30/06/19 30/06/18 31/12/18
(unaudited) (unaudited) (audited)
EUR000s EUR000s EUR000s
Financial Assets
At amortised cost:
Deposits with banks 50,000 178,286 70,998
At fair value:
Investments held for trading 89,079 81,228 78,778
Available for sale investments 811,807 744,224 795,717
At cost:
Loans 598 574 615
Other receivables 74,058 68,518 62,868
Cash and cash equivalents 106,195 35,572 77,639
Financial Liabilities
At amortised cost:
Convertible debt - 53,268 -
Subordinated debt 49,455 - 49,426
Lease liability 6,558 - -
At cost:
Payables 36,269 33,593 33,234
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
Note 9 - Financial Instruments and Fair Value Measurement
(continued)
(b) Fair value measurement
The following table compares the fair value of financial assets
and liabilities with their carrying values:
30/06/19 30/06/19 30/06/18 30/06/18 31/12/18 31/12/18
(unaudited) (unaudited) (unaudited) (unaudited) (audited) (audited)
Fair Carrying Fair Carrying Fair Carrying
value value value value value value
EUR000s EUR000s EUR000s EUR000s EUR000s EUR000s
Financial assets
Loans 717 598 689 574 738 615
Financial investments 950,886 950,886 1,003,738 1,003,738 945,493 945,493
Financial liabilities
Convertible debt - - 66,406 53,268 - -
Subordinated
debt 52,105 49,455 - - 49,817 49,426
Lease liability 6,558 6,558 - - - -
The carrying amount of the following financial assets and
liabilities is considered a reasonable approximation of their fair
value:
-- Other receivables
-- Cash and cash equivalents
-- Payables
The following tables provide an analysis of financial
instruments that are measured subsequent to initial recognition at
fair value, grouped into Levels 1 to 3 based on the degree to which
the fair value is observable.
-- Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities.
-- Investments held for trading and available for sale
investments - quoted debt securities are fair valued using latest
available closing bid price. UCITS funds are valued using the
latest available closing NAV of the fund.
-- Deposits with banks and cash and cash equivalents are valued
at the placement value.
-- Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
-- Investment property and property held for own use were fair
valued by independent external professional valuers, CB Richard
Ellis, Valuation Surveyors at 31 December 2018 (refer to note 14
and note 16 in the Group Annual Report for year ended 31 December
2018). An adjustment has been made to the investment property to
reflect updated market data since 31 December 2018.
-- Subordinated debt is valued using a discounted cash flow
methodology using a discount rate based on observable market yields
for a similar instrument.
-- Lease liability is valued using a discounted cash flow
methodology using market interest rates.
-- Loans are fair valued using market interest rate.
-- Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable inputs).
Among the valuation techniques used are cost, net asset or net book
value or the net present value of future cash flows based on
operating projections.
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
Note 9 - Financial Instruments and Fair Value Measurement
(continued)
30 June 2019 (unaudited) Level Level Level 3 Total
1 2
EUR000s EUR000s EUR000s EUR000s
Assets
Loans - 717 - 717
Investment property - 17,500 - 17,500
Property held for own use - 17,184 - 17,184
Financial assets
Investments held for trading
- quoted shares 52 - - 52
Investments held for trading
- UCIT Funds 89,027 - - 89,027
AFS(1) investments - quoted debt
securities 811,184 - - 811,184
AFS(1) investments - unquoted
investments - - 623 623
Deposits with banks 50,000 - - 50,000
Cash and cash equivalents 106,195 - - 106,195
---------- -------- -------- ----------
Total assets 1,056,458 35,401 623 1,092,482
---------- -------- -------- ----------
Liabilities
Subordinated debt - 52,105 - 52,105
Lease liability - 6,558 - 6,558
---------- -------- -------- ----------
Total liabilities - 58,663 - 58,663
---------- -------- -------- ----------
(1) Available for sale
30 June 2018 (unaudited) Level Level Level 3 Total
1 2
EUR000s EUR000s EUR000s EUR000s
Assets
Loans - 689 - 689
Investment property - 18,000 - 18,000
Property held for own use - 14,754 - 14,754
Financial assets
Investments held for trading
- quoted shares 292 - - 292
Investments held for trading
- UCIT Funds 80,936 - - 80,936
AFS(1) investments - quoted debt
securities 743,380 - - 743,380
AFS(1) investments - unquoted
investments - - 844 844
Deposits with banks 178,286 - - 178,286
Cash and cash equivalents 35,572 - - 35,572
---------- -------- -------- ----------
Total assets 1,038,466 33,443 844 1,072,753
---------- -------- -------- ----------
Liabilities
Convertible debt - 66,406 - 66,406
---------- -------- -------- ----------
Total liabilities - 66,406 - 66,406
---------- -------- -------- ----------
(1) Available for sale
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
Note 9 - Financial Instruments and Fair Value Measurement
(continued)
31 December 2018 (audited) Level 1 Level Level 3 Total
2
EUR000s EUR000s EUR000s EUR000s
Assets
Loans - 738 - 738
Investment property - 18,310 - 18,310
Property held for own use - 17,185 - 17,185
Financial assets
Investments held for trading
- quoted shares 262 - - 262
Investments held for trading
- UCITs 78,516 - - 78,516
AFS(1) investments - quoted debt
securities 795,094 - - 795,094
AFS(1) investments - unquoted
investments - - 623 623
Deposits with banks 70,998 - - 70,998
Cash and cash equivalents 77,639 - - 77,639
---------- -------- -------- ----------
Total assets 1,022,509 36,233 623 1,059,365
---------- -------- -------- ----------
Liabilities
Subordinated debt - 49,817 - 49,817
---------- -------- -------- ----------
Total liabilities - 49,817 - 49,817
---------- -------- -------- ----------
(1) Available for sale
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
A reconciliation of Level 3 fair value measurement of financial
assets is shown in the table below
30/06/19 30/06/18 31/12/18
(unaudited) (unaudited) (audited)
EUR000s EUR000s EUR000s
Opening balance Level 3 financial assets 623 844 844
Additions - - -
Disposals - - (250)
Unrealised gains recognised in Consolidated Income Statement - - 29
Closing balance Level 3 financial assets 623 844 623
------------ ------------ ----------
Available for sale investments grouped into Level 3 comprise
unquoted securities and consist of a number of small investments.
The values attributable to these investments are derived from a
number of valuation techniques including the net present value of
future cash flows based on operating projections. A change in one
or more of these inputs could have an impact on valuations. The
maximum exposure the Group has in relation to Level 3 valued
financial assets at 30 June 2019 is EUR623,000 (30 June 2018:
EUR844,000; 31 December 2018: EUR623,000).
Note 10 - Transactions with related parties
For the purposes of the disclosure requirements of IAS 24, the
term "key management personnel" (i.e. those persons having
authority and responsibility for planning, directing and
controlling the activities of the Group) comprises the Board of
Directors and Company Secretary of FBD Holdings plc and the members
of the Executive Management Team. Full disclosure in relation to
the compensation of the Board of Directors and details of
Directors' share options are provided in the Report on Directors'
Remuneration in the 2018 Annual Report. An analysis of share-based
payments to key management personnel is also included in Note 40 of
the 2018 Annual Report.
Note 11 - Contingent liabilities and contingent assets
There were no contingent liabilities or contingent assets at 30
June 2019, 30 June 2018 or 31 December 2018.
Note 12 - Information
This half yearly report and the Annual Report for the year ended
31 December 2018 are available on the Company's website at
www.fbdgroup.com.
Note 13 - Approval of Half Yearly Report
The half yearly report was approved by the Board of Directors of
FBD Holdings plc on 31 July 2019.
FBD HOLDINGS PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the half year ended 30 June 2019
RESPONSIBILITY STATEMENT
The Directors are responsible for preparing the Half Yearly
Financial Report in accordance with the Transparency (Directive
2004/109/EC) Regulations 2007, the related Transparency Rules of
the Central Bank of Ireland and with IAS 34, Interim Financial
Reporting as adopted by the European Union.
We confirm that to the best of our knowledge:
a) the Group condensed set of interim financial statements have
been prepared in accordance with IAS 34 "Interim Financial
Reporting" as adopted by the European Union;
b) the interim management report includes a fair review of the
important events that have occurred during the first six months of
the financial year, and their impact on the condensed set of
interim financial statements and the principal risks and
uncertainties for the remaining six months of the financial
year;
c) the interim management report includes a fair review of
related party transactions that have occurred during the first six
months of the current financial year and that have materially
affected the financial position or the performance of the Group
during that period, and any changes in the related parties'
transactions described in the last Annual Report that could have a
material effect on the financial position or performance of the
Group in the first six months of the current financial year.
On behalf of the Board
Liam Herlihy Fiona Muldoon
Chairman Group Chief Executive
31 July 2019
APPIX
ALTERNATIVE PERFORMANCE MEASURES (APM's)
The Group uses the following alternative performance measures:
Loss ratio, expense ratio, combined operating ratio, annualised
investment return, net asset value per share, return on equity and
gross written premium.
Loss ratio (LR), expense ratio (ER) and combined operating ratio
(COR) are widely used as a performance measure by insurers, and
give users of the financial statements an understanding of the
underwriting performance of the entity. Investment return is used
widely as a performance measure to give users of financial
statements an understanding of the performance of an entities
investment portfolio. Net asset value per share (NAV) is a widely
used performance measure which provides the users of the financial
statements the book value per share. Return on equity (ROE) is also
a widely used profitability ratio that measures an entity's ability
to generate profits from its shareholder investments. Gross written
premium refers to the revenue of an insurance company and is widely
used across the general insurance industry.
The calculation of the APM's is based on the following data:
Half year Half year Year
ended ended ended 31/12/18
30/06/19 30/06/18 (audited)
(unaudited) (unaudited)
EUR000s EUR000s EUR000s
Loss ratio
Net claims and benefits 88,139 102,596 183,367
Movement in other provisions 6,155 2,107 7,064
------------- --------------
Total claims incurred 94,294 104,703 190,431
Net premium earned 167,207 165,510 337,903
------------- -------------- ----------------
Loss ratio (Total claims incurred/Net
premium earned) 56.4% 63.3% 56.3%
-------------
Expense ratio
Other underwriting expenses 43,699 41,873 84,054
Net premium earned 167,207 165,510 337,903
------------- -------------- ----------------
Expense ratio (Underwriting expenses/Net
premium earned) 26.1% 25.3% 24.9%
------------- -------------- ----------------
Combined operating ratio % % %
Loss ratio 56.4% 63.3% 56.3%
Expense ratio 26.1% 25.3% 24.9%
------------- -------------- ----------------
Combined operating ratio (Loss
ratio + Expense ratio) 82.5% 88.6% 81.2%
------------- -------------- ----------------
Annualised investment return EUR000s EUR000s EUR000s
Investment return recognised
in consolidated income statement 8,627 1,297 2,482
Investment return recognised
in statement of comprehensive
income 14,007 (3,474) (7,845)
------------- -------------- ----------------
Total investment return 22,634 (2,177) (5,363)
Average underwriting investment
assets 1,061,025 1,063,672 1,047,711
Investment return (Total investment
return/Average underwriting investment
assets) 4.3%(1) (0.4%)(1) (0.5%)
------------- -------------- ----------------
(1) Annualised
Half year Half year Year
ended ended ended 31/12/18
30/06/19 30/06/18 (audited)
(unaudited) (unaudited)
Net asset value per share (NAV
per share) EUR000s EUR000s EUR000s
Shareholders' funds - equity
interests 311,655 277,475 283,484
------------- -------------- ----------------
Number of shares
Weighted average number of ordinary
shares 34,770,837 34,666,201 34,666,201
------------- -------------- ----------------
Cent Cent Cent
Net asset value per share (Shareholders
funds /Weighted average number
of ordinary shares) 896 800 818
------------- -------------- ----------------
Return on Equity EUR000s EUR000s EUR000s
Weighted average equity attributable
to ordinary equity holders of
the parent 297,570 274,551 277,555
Result for the period 33,801 16,115 42,383
------------- -------------- ----------------
Return on equity (Result for
the period/Weighted average equity
attributable to ordinary equity
holders of the parent) 23%(1) 12%(1) 15%
------------- -------------- ----------------
Gross premium written: The total premium on insurance underwritten
by an insurer or reinsurer
during a specified period, before deduction of reinsurance
premium.
(1) Annualised
Independent review report to FBD Holdings plc
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed FBD Holdings plc's condensed consolidated
interim financial statement (the "interim financial statements") in
half-yearly report of FBD Holdings plc for the six month period
ended 30 June 2019. Based on our review, nothing has come to our
attention that causes us to believe that the interim financial
statements are not prepared, in all material respects, in
accordance with International Accounting Standard 34, Interim
Financial Reporting, as adopted by the European Union and the
Transparency (Directive 2004/109/EC) Regulations 2007 and the
Transparency Rules of the Central Bank of Ireland.
What we have reviewed
The interim financial statements, comprise:
-- the condensed consolidated statement of financial position as at 30 June 2019;
-- the condensed consolidated income statement for the period then ended;
-- the condensed consolidated statement of comprehensive income
for the period then ended;
-- the condensed consolidated statement of cash flows for the period then ended;
-- the condensed consolidated statement of changes in equity for
the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the half-yearly
report have been prepared in accordance with International
Accounting Standard 34, Interim Financial Reporting, as adopted by
the European Union and the Transparency (Directive 2004/109/EC)
Regulations 2007 and the Transparency Rules of the Central Bank of
Ireland.
As disclosed in note 2 to the interim financial statements, the
financial reporting framework that has been applied in the
preparation of the full annual financial statements of the group is
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The half-yearly report, including the interim financial
statements, is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the
half-yearly report in accordance with the Transparency (Directive
2004/109/EC) Regulations 2007 and the Transparency Rules of the
Central Bank of Ireland.
Our responsibility is to express a conclusion on the interim
financial statements in the half yearly report based on our review.
This report, including the conclusion, has been prepared for and
only for the company for the purpose of complying with the
Transparency (Directive 2004/109/EC) Regulations 2007 and the
Transparency Rules of the Central Bank of Ireland and for no other
purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity, issued by the Auditing Practices Board for use in
the United Kingdom and Ireland. A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (Ireland)
and, consequently, does not enable us to obtain assurance that we
would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
We have read the other information contained in the half yearly
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers
Chartered Accountants
Dublin
31 July 2019
(a) The maintenance and integrity of the FBD Holdings plc
website is the responsibility of the directors; the work carried
out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the financial statements since
they were initially presented on the website.
(b) Legislation in the Republic of Ireland governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR CKDDQABKDKON
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