RNS Number:4013B
Riceman Insurance Investments PLC
24 November 1999
Riceman Insurance Investments plc
Interim Results for the six months ended 31 July 1999
Chairman and Chief Executive's Review
For the six month period ended 31 July 1999, your Company incurred an unaudited
pre-tax loss of #182,491 against a loss #373,478 for the corresponding period in
1998.
For the first time, almost all our turnover in the first six months comprises
quality small and medium repeat business. Unfortunately, total turnover was
below that of the corresponding period last year which included a significant
"one-off" item of business, and also because our changing course is just
beginning to gather momentum. This has been achieved at a time when our
administration costs have been reduced substantially compared to the comparable
period last year.
Based on our new philosophy of targeting quality small and medium repeat
business at manageable cost, and following the overhead saving measures taken, I
can sum up that although the Company is still in loss, the rate of loss has
reduced rapidly.
I will now turn to the specific business activity by territory.
Russia: Moscow
Following last year's disastrous financial turmoil, as well as the collapse of
oil prices, this market has recovered only slowly so far this year. However, the
reorganisation of our operations there, as reported previously, is beginning to
bear fruit. A dedicated production and sales team has now been established, and
the pace of income is picking up on a monthly basis.
Uzbekistan: Tashkent
As reported previously, in view of the non-convertibility of the Som, local
business is proving very difficult due to the need to purchase reinsurance
capacity that is only available in hard currency. For this reason, we are
considering the viability of our presence in Uzbekistan.
Azerbaijan: Baku
This market, even more than Russia, is an oil and gas based economy.
Accordingly, the fall of oil prices this year has had a major dampening effect
on the Azerbaijan economy and short-term business projects there. However, as a
direct result of reorganisations within their operations, Anglo Azerbaijan has
been able to maintain its prominent position in the market by continuing to
cultivate small to medium businesses.
Kyrgyzstan: Bishkek
Work continues on developing large business accounts in co-operation with our
joint venture partner, the State Property Fund. Although turnover during the
period was affected due to financial problems experienced by a major client, the
recent appointment of a new General Director of the company, who has significant
experience across the entire spectrum of wholesale and retail business, should
improve income.
Georgia: Tbilisi
During the period under review, the mix of our partners has improved, resulting
in all local partners being Georgian businesses. Good progress has been made and
the company is now the third largest insurance company in Georgia.
Future Developments
As a result of the ongoing reorganisations which have been taking place with
local partners, general directors, new sales structures, new incentives for
achievers and cost controls, we anticipate improved turnover. We will continue
to seek reductions in our cost base.
We already have some income from business in Kazakhstan and are looking to see
how to best further our operations there. As I have previously reported, we are
also looking at setting up in some other emerging markets. Accordingly, we are
reviewing the broad spectrum of options available to us to raise fresh new
capital to finance this expansion programme.
I would like to extend the Board's sincere thanks to all employees, both
overseas and in London, for their efforts during a challenging period.
Kamran Amin
Chairman and Chief Executive
24 November 1999
Unaudited Consolidated Profit and Loss Account
for the six months ended 31 July 1999
Six months Six months Year ended
ended 31 July ended 31 July 31 January
1999 1998 1999
Note Unaudited Unaudited Audited
# # #
TURNOVER 163,244 202,624 381,741
Net operating expenses (357,320) (616,341) (1,565,927)
OPERATING LOSS (194,076) (413,717) (1,184,186)
Interest receivable 2 11,585 40,239 49,684
Interest payable and
similar charges - - (471)
LOSS ON ORDINARY
ACTIVITIES BEFORE TAXATION (182,491) (373,478) (1,134,973)
Tax on profit on ordinary
activities - - -
LOSS ON ORDINARY
ACTIVITIES AFTER TAXATION
TRANSFERRED TO RESERVES (182,491) (373,478) (1,134,973)
BASIC LOSS
PER SHARE 4 (0.28)p (0.57)p (1.72)p
All activities derive from continuing operations.
Unaudited Consolidated Balance Sheet
31 July 1999
31 July 31 July 31 January
1999 1998 1999
Note Unaudited Unaudited Audited
# # #
FIXED ASSETS
Tangible assets 29,437 47,171 38,773
Investments - associated
undertakings 5 363,655 567,482 362,723
393,092 614,653 401,496
CURRENT ASSETS
Debtors 6 501,256 529,092 688,139
Cash at bank 808,016 1,068,587 651,279
1,309,272 1,597,679 1,339,418
CREDITORS: amounts falling
due within one year 7 (938,078) (504,050) (794,127)
NET CURRENT ASSETS 371,194 1,093,629 545,291
NET ASSETS 764,286 1,708,282 946,787
CAPITAL AND RESERVES
Called up share capital 65,939 65,939 65,939
Share premium account 1,896,685 1,896,685 1,896,685
Profit and loss account (1,198,338) (254,342)(1,015,837)
TOTAL EQUITY
SHAREHOLDERS' FUNDS 764,286 1,708,282 946,787
Unaudited Consolidated Cash Flow Statement
for the six months ended 31 July 1999
Six months Six months Year ended
ended 31 July ended 31 July 31 January
1999 1998 1999
Note Unaudited Unaudited Audited
# # #
CASH (OUTFLOW)/INFLOW
FROM OPERATING ACTIVITIES
8(a) 146,406 (468,522) (846,003)
RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE 8(b) 11,585 40,239 49,213
Taxation - 15,264 15,264
NET CASH OUTFLOW FROM
CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT 8(b) (1,244) (54,878) (110,566)
Acquisitions and disposals - - -
CASH (OUTFLOW)/INFLOW
BEFORE THE USE OF LIQUID
RESOURCES AND FINANCING 156,747 (467,897) (892,092)
(Decrease)/increase in cash
8(c) 156,747 (467,897) (892,092)
Notes to the Interim Financial Information
for the six months ended 31 July 1999
1. PREPARATION
(i) The interim financial information for the six months ended 31 July 1999
consolidates the results of Riceman Insurance Investments plc, Riceman
Underwriters Limited and Riceman Insurance Consultants Limited.
A supplementary statement incorporating the results of the associated
undertakings has not been prepared on the grounds of practicality.
All activities derive from continuing operations.
(ii) The unaudited results for the six months ended 31 July 1999 have been
prepared on the basis of accounting policies adopted in the audited accounts for
the year ended 31 January 1999.
(iii) The Interim Report is unaudited and does not constitute Statutory
Accounts. The results for the year ended 31 January 1999 have been extracted
from the audited financial statements for that period which have been filed with
the Registrar of Companies. The Auditors' opinion on these accounts was
unqualified.
The Interim Report for the six months ended 31 July 1999 was approved by the
Directors on 24 November 1999.
2. INTEREST RECEIVABLE AND SIMILAR INCOME
31 July 31 July 31 January
1999 1998 1999
Unaudited Unaudited Audited
# # #
Bank interest receivable 11,585 40,239 49,684
3. PROPOSED DIVIDEND
No dividend is proposed to be paid in respect of the six months ended 31
July 1999 (31 July 1998: #nil; 31 January 1999: #nil)
4. EARNINGS PER SHARE
The calculation of earnings per share is based on the loss after taxation
for the period of #182,491 (31 July 1998: Loss #373,478) and on 65,938,530
ordinary shares (31 July 1998: 65,938,530) being the average number of ordinary
shares in issue during the period.
Notes to the Interim Financial Information
for the six months ended 31 July 1999
5. INVESTMENTS
31 July 31 July 31 January
1999 1998 1999
Unaudited Unaudited Audited
# # #
Associated undertakings
Anglo-Russia Insurance Company 100,000 319,826 100,000
Anglo-Tashkent Insurance Company - 39,216 -
Anglo-Azerbaijan Insurance Company 92,224 92,224 92,224
Anglo-Kyrgyz Insurance Company 80,839 80,240 79,907
Anglo-Georgia Insurance Company 90,592 29,878 90,592
363,655 561,384 362,723
Trade investment at cost Imedi Limited - 6,098 -
363,655 567,482 362,723
6. DEBTORS
31 July 31 July 31 January
1999 1998 1999
Unaudited Unaudited Audited
# # #
Trade debtors 282,942 278,151 346,127
Other debtors 100,135 122,895 219,111
Corporation tax recoverable 100,000 100,000 100,000
Prepayments and accrued income 18,179 28,046 22,901
501,256 529,092 688,139
7. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31 July 31 July 31 January
1999 1998 1999
Unaudited Unaudited Audited
# # #
Trade creditors 824,187 416,233 655,497
Corporation tax - - -
Other creditors 47,967 22,185 23,888
Other taxes and social security 9,747 14,079 17,285
Accruals and deferred income 56,177 51,553 90,570
Bank overdraft - - 6,887
938,078 504,050 794,127
8. CONSOLIDATED CASH FLOW STATEMENT
(a) Reconciliation of operating loss to cash inflow from operating
activities
31 July 31 July 31 January
1999 1998 1999
Unaudited Unaudited Audited
# # #
Operating loss (194,076) (413,717) (1,184,186)
Depreciation charge 9,648 9,673 19,476
Exceptional item - - 259,042
Decrease in debtors 186,883 356,544 197,497
Decrease in creditors 143,951 (421,022) (137,832)
Cash inflow from operating
activities 146,406 (468,522) (846,003)
(b) Analysis of cash flows from headings netted in the cash flow statement
31 July 31 July 31 January
1999 1998 1999
Unaudited Unaudited Audited
# # #
Returns on investment and
servicing of finance
Interest received 11,585 40,239 49,684
Interest paid - - (471)
Net cash inflow from returns on
investments and servicing of finance 11,585 40,239 49,213
Net cash outflow from capital expenditure
and financial investment
Purchase of tangible fixed assets (312) - (1,405)
Purchase of trade investments - - 6,098
Purchase of investment in
associated undertaking (932) (54,878) (115,259)
Net cash outflow from capital expenditure
and financial investment (1,244) (54,878) (110,566)
(c) Analysis of cash
At 1 February Cash At 31 July
1999 flow 1999
# # #
Cash at bank and in hand 651,279 156,737 808,016
Bank overdraft (6,887) - -
644,392 156,737 808,016
9. YEAR 2000
The Directors are aware of the year 2000 problem, and have considered the issues
as regards the Company's own computer hardware and software, which was recently
acquired and is Year 2000 compliant. The UK insurance market and UK suppliers
with which the Company transacts are all expected to be Year 2000 compliant, and
the position will continue to be monitored throughout 1999.
The Directors have also considered the possibility of problems arising outside
the UK. The Anglo companies utilise hardware and software which is Year 2000
compliant. The Directors believe that it is not practical to establish the Year
2000 compliance position of clients of the Anglo companies, but do not believe
that any costs associated with any such problem would have any significant
impact on the results of the Group.
10. Further copies of this Interim Report are available from the Company's
office at 130 Minories, London EC3N 1NU.
END
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