RNS No 3166h
RICEMAN INSURANCE INVESTMENTS PLC
30th November 1998
Riceman Insurance Investments plc
Interim Results for the six months ended 31 July 1998
Chief Executive's Review
1998 has proven to be one of the most challenging periods for businesses
focused within emerging market economies. None more so than the States of
the Former Soviet Union (FSU). The worst affected of these States was the
Russian Federation. As a matter of generality, and despite my previous
optimism, Riceman's business has suffered along with many others in these
markets. It is with this backdrop that I regret to announce a further
deterioration in the financial performance of your Company. For the period to
31st July 1998 your Company has incurred a pre-tax loss of #373,478 against a
profit of #406,924 for the corresponding period of 1997. Following the loss of
certain large accounts to state insurers as reported in my year-end
statement and the consequential large loss of our income, we have changed our
emphasis away from concentrating on high profile major accounts. Instead we
have concentrated on developing a portfolio of smaller and medium sized
businesses that have a good prospect of remaining clients over the longer
term. Progress in this respect has been made in our joint venture operations in
the FSU. Bearing in mind large losses of income referred to above and our
sizeable fixed overheads, we have continued the line by line review of
operating expenses within the insurance company joint ventures and in London.
Furthermore, as in previous periods, we continue to charge the profit and loss
account with development expenses. Clearly the results are very disappointing
and in view of the current situation the Directors do not propose the
payment of an interim dividend. I will now turn to the specific business
activity by territory.
Russia: Moscow
This has proved to be a very difficult market. Moreover, we no longer have
the benefit of, or the reliance on, one or two major accounts.
Accordingly, we are viewing this operation with caution.
Uzbekistan: Tashkent
As reported previously, our major businesses were lost to the state
insurer. Additionally, in view of the nonconvertibility of the Uzbek
Som, local business is proving very difficult in view of the need to
purchase reinsurance capacity that is only available in hard currency. For
these reasons, we are considering the viability of our presence in Uzbekistan.
Azerbaijan: Baku
Anglo-Azerbaijan has continued to make good progress
throughout the period, gaining more small and medium sized renewable
business.
Kyrgyzstan: Bishkek
Anglo-Kyrgyz has finally started to generate some medium sized business
during the period under review. In the autumn of 1998, Anglo-Kyrgyz became
the insurer of Kyrgyzstan Airlines' entire aviation insurance account.
We are continuing to work to develop certain other larger
businesses in co-operation with our joint venture partner, The State
Property Fund.
Georgia: Tbilisi
Anglo-Georgian Insurance Company is our newest joint venture.
Following the establishment of the company and the obtaining of the
necessary licences, the company commenced underwriting various small and
medium sized accounts. In the autumn of this year Anglo-Georgian Insurance
Company became the insurer of Georgian Airlines. The airline at present has
only an eastern manufactured fleet of modest size. However, it is the
national flag carrier and we expect the airline to develop in a similar
manner to the state airlines of other FSU countries.
Future Developments
The future development of the group's business is focused on obtaining an
increasing flow of small and medium sized commercial business. Whilst we
previously enjoyed the fruits of acting as local insurers to certain major
businesses, our results show we have been
vulnerable to the loss of the major accounts due in many respect to
factors outside our control. Whilst we regret the loss of major sources of
income, we remain of the view that our current strategy to build our
portfolio with regular renewable clients is the correct course to
follow. Development might be slower but it will be a firm foundation for the
future. The Company has adequate resources to continue in operation in
the foreseeable future.
We will of course continue to develop sizeable accounts such as have been
won in Kyrgyzstan and Georgia. However, the focus will be on spread of
account, volume of clients and a continuous review to reduce the level of
expenses. Marketing efforts in each of our joint ventures have been
modified toward cost effective business acquisition in line with our evolving
strategy.
Finally, I would like to extend my sincere thanks to my fellow Directors
and to all our staff both overseas and here in London all of who work
tirelessly in this extremely challenging period for the Group.
Robert J Alford
Chief Executive
30 November 1998
Unaudited Consolidated Profit and Loss Account for the six months ended 31
July 1998
Six months Six months Year ended
ended 31 July ended 31 July 31 January 1998
1998 1997
Note Unaudited Unaudited Audited
# # #
TURNOVER 202,624 929,898 1,242,248
Net operating expenses (616,341) (559,948) (1,675,093)
OPERATING (LOSS)/PROFIT (413,717) 369,950 (432,845)
Interest receivable 2 40,239 37,008 96,495
Interest payable and
similar charges - (34) (73)
(LOSS)/PROFIT ON ORDINARY
ACTIVITIES BEFORE TAXATION(373,478) 406,924 (336,423)
Tax on profit on
ordinary activities - (130,177) 115,264
(LOSS)/PROFIT ON ORDINARY
ACTIVITIES AFTER TAXATION
TRANSFERRED TO RESERVES (373,478) 276,747 (221,159)
BASIC (LOSS)/EARNINGS
PER SHARE 4 (0.57)p 0.42p (0.34)p
All activities derive from continuing operations.
Unaudited Consolidated Balance Sheet
31 July 1998
31 July 31 July 31 January
1998 1997 1998
Note Unaudited Unaudited Audited
# # #
FIXED ASSETS
Tangible assets 47,171 40,078 56,844
Investments -
associated undertakings 5 567,482 385,165 512,604
614,653 425,243 569,448
CURRENT ASSETS
Debtors 6 529,092 1,280,439 900,900
Cash at bank 1,068,587 2,297,260 1,544,245
1,597,679 3,577,699 2,445,145
CREDITORS: amounts falling
due within one year 7 (504,050) (1,293,099) (932,833)
NET CURRENT ASSETS 1,093,629 2,284,600 1,512,312
TOTAL ASSETS
LESS CURRENT LIABILITIES 1,708,282 2,709,843 2,081,760
CREDITORS: amounts
falling due after
more than one year
- corporation tax - (130,177) -
NET ASSETS 1,708,282 2,579,666 2,081,760
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 (254,342) 617,042 119,136
TOTAL EQUITY
SHAREHOLDERS' FUNDS 1,708,282 2,579,666 2,081,760
Unaudited Consolidated Cash Flow Statement
for the six months ended 31 July 1998
Six months Six months Year ended
ended 31 July ended 31 July 31 January 1998
1998 1997
Note Unaudited Unaudited Audited
# # #
CASH (OUTFLOW)/INFLOW
FROM OPERATING ACTIVITIES 8(a)(468,522) 729,912 244,873
RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE 8(b) 40,239 36,974 96,422
Taxation 15,264 - (178,125)
NET CASH OUTFLOW FROM
CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT8(b) (54,878) (21,912) (177,972)
Acquisitions and
disposals - - (2,000)
CASH (OUTFLOW)/INFLOW
BEFORE THE USE OF LIQUID
RESOURCES AND FINANCING (467,897) 744,974 (16,802)
(Decrease)/increase in cash8(c)(467,897) 744,974 (16,802)
Notes to the Interim Financial Information for the six months ended 31 July
1998
1. PREPARATION
(i)The interim financial information for the six months ended 31 July
1998 consolidates the results of Riceman Insurance Investments plc,
Riceman Underwriters Limited and Ricemans 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 1998 have
been prepared on the basis of accounting policies adopted in the audited
accounts for the year ended 31 January 1998.
(iii) The Interim Report is unaudited and does not constitute
Statutory Accounts. The results for the year ended 31 January 1998
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 1998
was approved by the Directors on 30 November 1998.
2. INTEREST RECEIVABLE AND SIMILAR INCOME
31 July 31 July 31 January
1998 1997 1998
Unaudited Unaudited Audited
# # #
Bank interest receivable 40,239 37,008 96,495
3. PROPOSED DIVIDEND
No dividend is proposed to be paid in respect of the six months ended 31
July 1998 (31 July 1997: #nil; 31 January 1998: #nil)
4. EARNINGS PER SHARE
The calculation of earnings per share is based on the loss after taxation for
the period of #373,478 (31 July 1997: profit #276,747) and on 65,938,530
ordinary shares (31 July 1997: 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 1998
5. INVESTMENTS
31 July 31 July 31 January
1998 1997 1998
Unaudited Unaudited Audited
# # #
Associated undertakings
Anglo-Russia
Insurance Company 319,826 319,826 319,826
Anglo-Tashkent
Insurance Company 39,216 39,216 39,216
Anglo-Azerbaijan Insurance
Company 92,224 761 92,224
Anglo-Kyrgyz
Insurance Company 80,240 25,362 25,362
Anglo-Georgian
Insurance Company 29,878 - 29,878
561,384 385,165 506,506
Trade investment at
cost: Imedi Limited 6,098 - 6,098
567,482 385,165 512,604
6. DEBTORS
31 July 31 July 31 January
1998 1997 1998
Unaudited Unaudited Audited
# # #
Trade debtors 278,151 662,438 712,897
Other debtors 122,895 592,514 57,288
Corporation tax
recoverable 100,000 - 115,264
Prepayments and
accrued income 28,046 25,487 15,451
529,092 1,280,439 900,900
7. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31 July 31 July 31 January
1998 1997 1998
Unaudited Unaudited Audited
# # #
Trade creditors 416,233 1,013,603 783,484
Corporation tax - 178,125 -
Other creditors 22,185 75,569 51,105
Other taxes and
social security 14,079 2,870 25,994
Accruals and
deferred income 51,553 22,932 64,489
Bank overdraft - - 7,761
504,050 1,293,099 932,833
8. CONSOLIDATED CASH FLOW STATEMENT
(a) Reconciliation of operating (loss)/profit to cash
inflow from operating activities
31 July 31 July31 January
1998 1997 1998
Unaudited Unaudited Audited
# # #
Operating (loss)/profit(413,717)369,950(432,845)
Depreciation charge 9,673 3,310 9,668
Decrease in debtors 356,544 527,381 1,027,681
Decrease in creditors(421,022) (171,729) (359,631)
Adjustment for investment
in subsidiary - 1,000 -
Cash outflow from
operating activities(468,522) 729,912 244,873
(b) Analysis of cash flows from headings netted in the
cash flow statement
31 July 31 July 31 January
1998 1997 1998
Unaudited Unaudited Audited
# # #
Returns on investment and
servicing of finance
Interest received 40,239 37,008 96,495
Interest paid - (34) (73)
Net cash inflow from
returns on investments
and servicing of finance40,239 36,974 96,422
Net cash outflow from capital expenditure
and financial investment
Purchase of tangible fixed assets - (17,254) (45,875)
Purchase of trade
investments - - (6,098)
Purchase of investment in
associated undertaking (54,878)(4,658)(125,999)
Net cash outflow from capital expenditure
and financial investment (54,878) (21,912) (177,972)
(c) Analysis of cash
At 1 February Cash At 31 July
1998 flow 1998
# # #
Cash at bank and
in hand 1,544,245 (475,658) 1,068,587
Bank overdraft (7,761) 7,761 -
1,536,484 (467,897) 1,068,587
9. Further copies of this Interim Report are available from the Company's
office at 130 Minories, London EC3N 1NT.
END
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