Tribe Technology set to deliver healthy pipeline of orders from Tier-One miners. Watch the video here.

Less Ads, More Data, More Tools Register for FREE

Pin to quick picksFBH.L Regulatory News (FBH)

  • There is currently no data for FBH

Watchlists are a member only feature

Login to your account

Alerts are a premium feature

Login to your account

2015 Preliminary Results Announcement

29 Feb 2016 07:00

RNS Number : 3736Q
FBD Holdings PLC
29 February 2016
 

FBD HOLDINGS PLC

29 February 2016

PRELIMINARY ANNOUNCEMENT

For the year ended 31 December 2015

 

STRATEGIC DEVELOPMENTS

· FBD has stabilised during the second half of 2015

· Key second half goals have been achieved:

- Sale of FBD Hotels completed

- Capital strengthening effected through bond issuance

- Major pension changes made

- Cost reduction target achieved

· Continued corrective pricing and risk selection actions reflecting current trading environment

· Significant governance changes announced separately today - the amalgamation of the Holdings and Insurance plc Boards will lead to new appointments, four Directors will not go forward for re-election at 2016 AGM and the Chairman will retire at 2017 AGM

· Clear strategy articulated - FBD continues to strengthen its customer base in the Irish agricultural and small business sectors and pursue a single brand consumer strategy

· Path to full year profitability by 2017

 

 

FINANCIAL RESULTS

2015

€000s

2014*

€000s

Gross premium written

363,263

363,735

Net premium earned

313,154

303,444

Net loss before taxation

(84,789)

(3,007)

 

Cent

 

Cent

Diluted loss per share

(213)

(7)

Net asset value per share

623

786

 

* The Group benefited by €32m following a change in the basis of estimate in providing for the Group's share of the Motor Insurance Bureau of Ireland "MIBI" outstanding claims (see note 6 following) and the 2014 comparatives have been restated accordingly.

· Gross premium written stable at €363m for the full year

· Full year average premium rate increases of 9%, offset by an 9% decline in policy volumes

· The full year net loss before tax of €85m is driven largely by prior year claims development of €96m (of which €88m was reported in H1)

· Full year investment return of 2.2% is a strong result in the ongoing low-return environment 

· Net loss before tax includes a restructuring charge of €11m in 2015. Ongoing cost savings of €8m identified with the savings realised from Quarter 1 2016 onwards

· NAV per share at 31 December 2015 is 623c compared to 786c for prior year and 512c at 30 June 2015

· The NAV increase in the second half of the year is largely driven by one-off pension scheme IAS 19 accounting benefits of €28m (81c) and the accounting treatment of the convertible bond, a component of which is taken directly to equity €18m (52c)

· Capital levels within target range of 110-130% of SCR

 

 

Fiona Muldoon, Group Chief Executive, said:

 

"After an exceptionally difficult year FBD has stabilised. We have delivered on the commitments made to our shareholders last summer. Our corrective pricing and risk selection actions are building momentum towards restoring profitability.

 

The cost of claims and all of the ancilliary costs associated are affecting everyone in Ireland. Court award levels are at an all-time high. We will work with the industry and the government to tackle the cost of claims for the benefit of all our customers. We urge the next government to make dealing with this a priority.

 

We have separately announced today significant board reorganisation and governance changes centred on the amalgamation of the FBD Holdings and FBD Insurance Boards. These changes reflect FBD's focus on our general insurance company and our life and pensions intermediary."

 

A presentation will be made to analysts at 9am today, a copy of which will be available on our Group website www.fbdgroup.com.

 

 Enquiries

Telephone

 FBD

 Fiona Muldoon, Group Chief Executive

+353 1 409 3208

 Peter Jackson, Head of Investor Relations

 Kathryn Speedie, Corporate Communications Officer

 

 Powerscourt

 Rory Godson/Jack Hickey

+353 1 669 4633

 

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 33 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 €0.60 each which are publicly traded:

 Listing

Irish Stock Exchange

UK Listing Authority

 Listing Category

Premium

Premium (Equity)

 Trading Venue

Irish Stock Exchange

London Stock Exchange

 Market

Main Securities Market

Main Market

 ISIN

IE0003290289

IE0003290289

 Ticker

FBD.I or EG7.IR

FBH.L

 

 

OVERVIEW

During the second half of 2015 the Group delivered on the important capital and strategic initiatives previously announced. There remains further work to return the business to profitability and we have set our business firmly on that path. Following the strengthening of prior year reserves as reported in the Group's 2015 half yearly report, substantial progress has been made in improving price adequacy and in strengthening the Group's capital position. The Group is focused on what it does best, servicing the insurance needs of FBD's agricultural and small business customers as well as a single brand consumer strategy for motorists and home owners. Important actions to reduce expenditure in line with this simplified strategy were successfully effected during the second half of the financial year.

Significant progress has been made by the Group during the second half of 2015:

· Focused on serving the insurance needs of core agricultural and small business customers. FBD will continue to invest in strengthening its customer relationships in the Irish agricultural and business sector.

· Implementation of the single brand consumer strategy has begun; FBD will service the needs of consumer car and home customers exclusively through the FBD brand.

· FBD has implemented decisive rating and pricing actions to restore profitability. This will continue as necessary in 2016.

· The Group has identified and implemented cost savings of €8m, as targeted in the 2015 half yearly report. A voluntary redundancy program was completed in the second half of 2015. The majority of savings will be realised from the end of the first quarter of 2016.

 

Before exceptional items, the Group made a loss before tax of €5.3m in the second half of 2015 following the loss of €96.4m in the first half of the year. After exceptional items the Group made a profit of €11.6m in the second half of 2015.

In August 2015, the Group outlined a number of measures to strengthen its capital position; divesting its stake in FBD Property & Leisure Limited, overhauling the legacy staff pension scheme, and exploring options for raising regulatory capital in debt capital markets.

The Group has completed each of these steps successfully:

· On 24 August 2015, the Group announced that it had reached agreement with Farmer Business Developments plc to divest its half of the Property & Leisure joint venture for €48.5m. This was approved by shareholders on 22 October 2015, and closed immediately afterwards.

· On 16 September 2015, the Group announced that it had reached an agreement with Fairfax Financial Holdings Limited ("Fairfax"), whereby Fairfax invested €70m in FBD Insurance plc by private placement of a convertible bond instrument. This convertible bond (convertible into equity of FBD Holdings plc) was approved by shareholders on 30 December 2015.

· The Group reached agreement with its staff in relation to the future of its defined benefit pension scheme. 95% of the active members in the scheme chose to leave the scheme in exchange for an enhanced transfer value to a defined contribution arrangement. The impact of the change in benefits coupled with the reduced number of members in the scheme has resulted in the elimination of the deficit of €54.3m as reported at 31 December 2014. A surplus of €9.1m was recorded at year end. The change in scheme benefits, net of the payment of enhanced transfer values has resulted in a credit to the income statement of €28.3m.

 

BUSINESS REVIEW

The Group recorded a loss before tax from continuing and discontinued operations of €84.8m in 2015 (2014: €3.0m). This is after an exceptional charge of €11.4m relating to restructuring costs and an exceptional gain of €28.3m relating to the restructure of the defined benefit pension scheme. Excluding these exceptional items, the Group made a loss of €101.7m in 2015, with €96.4m of this loss recorded in the first half of the financial year and €5.3m in the second half of the financial year.

Underwriting

Premium income

FBD has continued to prioritise profitability over volume and while policy volumes have declined by 8.9% in 2015, this has been offset by average rate increases of 8.9%. The net result is that gross written premium levels remained stable at €363.3m. FBD continues to maintain its focus on the insurance needs of its agricultural, small business and consumer customers and this delivered growth in premium during the period. Net earned premium was €313.2m, an increase of 3.2% on 2014, reflecting the earning through of the rate increases implemented throughout 2014 and 2015.

 

Claims

Net claims incurred increased to €341.3m (2014: €252.1m). Included in this was a full year charge of €95.8m relating to the strengthening of prior year reserves and an increase in the margin for uncertainty.

 

Adverse claims development

As set out in the Group's half yearly report, an adverse claims development pattern, first evident in the second half of 2014, was significantly more pronounced in 2015. It was driven by a number of structural changes in the claims environment. These changes included:

 

· A new Court of Appeal was established on 28 October 2014 with 9 judges who previously sat in the High Court. The positions left by these departures were backfilled mainly from existing judges in the Circuit Court which in turn created new vacancies in the Circuit Court. In all over 20 new judicial appointments were made between the Circuit and High Courts. Many of these new appointments were made in 2015.

· In February 2014 the District Court jurisdiction over claims increased from €6,400 to €15,000 whilst the Circuit Court limit increased from €38,000 to €60,000 for personal injury claims and €75,000 for property damage. This was widely flagged in the media and by the Minister for Justice at the time as a cost saving measure. This increased jurisdiction applied to all new proceedings issued after that date and as such very few cases were seen for trial in 2014 under the new jurisdiction limits. It was during the course of 2015 that the volume of cases began to be heard in the Circuit Court and trends began to emerge in relation to higher Court awards.

In addition, from August 2014 the introduction of the Recovery of Benefit and Assistance Scheme enables the Department of Social Protection to recover some welfare payments from personal injury awards directly from the insurer. Very significantly, the discount rate used in valuing personal injury awards was reduced from the previous 3% to between 1% and 1.5% following the Russell vs HSE case in December 2014 also.

 

Taken together during the course of 2015, FBD began to see strong trends emerging in relation to the level of damages being awarded. Volatility in court awards has led claimants' expectations to increase as court awards, in turn, influence out of court settlement levels.

In addition, in 2015:

· The Heads of Bill for Periodic Payment Orders (PPOs) were published. Submissions were invited before 31 July 2015. The finalised bill has not been published. The proposed introduction of PPOs will bring about the effective annuitisation of lump sum awards.

· The Injuries Board is collating data on personal injury awards and settlements from the Insurance Industry, and it is likely a revised Book of Quantum will be published over the next 12 months.

· The Group experienced a significant increase in motor injury claims frequency in 2014 and also began to see a shift in the claimant culture with more claimants likely to make an injury claim arising out of rear end motor collisions and reporting a greater degree of injury than in the past.

The combination of the above factors suggested that significant claims inflation was underway in the Irish market and at 30 June 2015 led FBD to increase prior year reserves by €88m.

 

In November 2015 a Court of Appeal judgement was delivered following the appeal of the Russell vs HSE ruling on the discount rate applied to settlement awards. The outcome of the appeal was to broaden the judged application, with the lower discount rate now applicable to a broader range of claims than envisaged in the original judgement. This has resulted in an increase in FBD's prior year reserves of €8m in the second half of the year. While the Group had provided for this within the margin for uncertainty at 30 June 2015, given the level of uncertainty still prevalent in the claims environment, the Group has decided not to release this element from the margin for uncertainty at 31 December 2015. As a result prior year reserves have been increased by a further €8m in the second half of 2015, bringing the total prior year reserve and margin for uncertainty charge in 2015 to €95.8m. Other than the impact of this discount rate judgement the prior year development since 30 June 2015 has been negligible. The clarity provided by the November 2015 Court of Appeal judgement has led to some early indications of an emerging willingness by claimants to settle since that date.

 

The Group is engaged with policy makers, through the Government Working Group and Insurance Ireland to investigate ways of improving the claims environment, to ensure that Government policy and the legal system is effective at working to reduce the cost of insurance and of insurance legal costs for all customers and policyholders.

 

Movement in reserves

H1 2015

€m

Full year 2015

€m

Opening Reserves (restated)

716.3

716.3

Prior Year Strengthening

87.9

95.8

Current Year Claims

123.2

245.4

Payments

(96.6)

(210.6)

Increase/(decrease) in UPR

4.4

(0.4)

Closing Reserves (insurance contract liabilities less reinsurance assets)

835.2

846.6

 

Weather, Claims Frequency and Large Claims

Ireland was hit by a number of storms during November and December 2015. Individually, none of the storms were of sufficient size to breach the Group's catastrophe reinsurance retention limit of €5m. The total net cost of these weather events in the last quarter was €11.4m.

Motor injury frequency declined as the underwriting and risk selection actions taken by the Group since the second half of 2014 started to prove effective.

While large claims (greater than €1m) were in line with average historic norms in the first half of 2015, the experience in the second half of 2015 was less favourable. The net cost of large claims for 2015 was €6.8m higher than the average over the previous three years.

Expenses

The Group's expense ratio was 27.4% (2014: 27.0%). Net expenses increased by €3.9m to €85.7m (2014: €81.8m).

 

Much of this was driven by the movement in deferred acquisition costs arising from the earn through of higher levels of broker channel business in 2015 compared to 2014. Net earned premium increased by 3.2%.

 

General

FBD's combined operating ratio, excluding prior year reserve strengthening and the increase in the margin for uncertainty, was 105.8% for 2015.

The Group's charge for the Motor Insurers Bureau of Ireland ("MIBI") was €11.6m (2014: €7.3m). This charge was previously included within claims incurred, however, following the adoption of new Irish GAAP by FBD Insurance plc, this is no longer included as a technical provision but is instead included in other provisions. The Group now provides for its share of the estimated levy call for the following year. Previously the Group provided for its share of the total outstanding claims of MIBI. Prior year comparatives have been restated to reflect this change in accounting policy.

Investment return

FBD's actual investment return for 2015 was 2.2% or €20.3m (2014: €26.1m). This better than expected performance reflected a number of one off gains from the sale of investment property in the UK, revaluation of Irish commercial property and equity gains. The outlook for investment income remains very challenging, as world-wide monetary policy keeps interest rates low. As long as quantitative easing persists as the cornerstone of the European Central Bank's monetary policy, a prolonged period of low investment returns appears likely. Therefore, the investment income outlook continues to be poor and the returns the Group expects to deliver in the near term are likely to be below the returns achieved over the last 5 years.

 

The Group recognised a loss of €1.8m (2014: profit of €1.0m) within the statement of other comprehensive income relating to mark to market movements on available for sale investments, in accordance with its accounting policy. This reflects net investment returns of €18.5m in 2015 (2014: €27.1m).

 

Financial Services

The Group's financial services operations include premium instalment services and life, pension and investment broking (FBD Financial Solutions) less holding company costs. These generated a solid performance in a tough environment, delivering a profit of €3.9m (2014: €5.2m) before exceptional items.

 

Property and Leisure Joint Venture

On 24 August 2015, the Group announced that it had reached an agreement with Farmer Business Developments plc to sell its 50% share of the Property and Leisure joint venture for €48.5m, representing fair value of the Group's share of the joint venture's net assets. The proceeds of the sale were invested in equity in FBD Insurance plc, in order to fulfil its capital requirement on transition to Solvency II on 1 January 2016.

Loss per share

FBD is no longer reporting an operating EPS based on the longer term rate of investment return. This brings FBD in line with practice in most general insurers.

The diluted loss per share was 213 cent per ordinary share, compared to a loss of 7 cent (restated) per ordinary share in 2014.

 

STATEMENT OF FINANCIAL POSITION

Capital Position

Ordinary shareholders' funds at 31 December 2015 amounted to €215.9m (2014: €270.6m restated). The reduction in shareholders' funds for the full year is mainly attributable to the losses in the period of €74.2m and the payment of the final 2014 dividend of €11.8m offset by both other comprehensive income of €12.9m and the accounting treatment of a portion of the convertible bond recognised in equity of €18.2m. Net assets per ordinary share are 623 cent, compared to 786 cent per share (restated) at December 2014. In the second half of the year the NAV per share increased from 512c to 623c, an increase of 111c per share.

The Group's net asset value has benefited by €32m following a change in accounting policy for the Group's share of the MIBI outstanding claims. This follows a change in accounting standards framework applicable to the Group's principal subsidiary, FBD Insurance plc. Previously FBD Insurance plc provided for its market share of the total outstanding claims of MIBI. Under new accounting standards applicable from 1 January 2015, FBD Insurance plc may only provide for its share of the following year's MIBI levy. This change increased the net asset value per share by 93c.

As announced on 16 September 2015, the Group reached an agreement with Fairfax Financial Holdings Limited ("Fairfax"), whereby Fairfax would invest €70m in FBD by private placement of a convertible bond instrument in FBD Insurance plc. This was approved by shareholders on 30 December 2015.

The Convertible Bond is a 10 year Solvency II compliant instrument and carries a coupon of 7.0% per annum which is payable semi-annually. The conversion price has been set at €8.50, a 37% premium over the closing share price on 15 September 2015. Unless previously redeemed, the Convertible Bond is exercisable from year 3 to year 10 and, in the event that the 30 day volume weighted average share price exceeds the conversion price for a period of 180 days, the Convertible Bond will automatically convert into ordinary shares in FBD Holdings plc at the conversion price. It has been accounted for in accordance with IFRS, whereby it is split into a liability component and an equity component. The fair value of the liability component has been determined with reference to the fair value of a similar liability without an equity conversion option. The equity component is recognised initially as the difference between the fair value of the convertible note as a whole and the fair value of the liability component. This investment is a significant vote of confidence in the Group from a very well established global insurance investor.

Solvency

Solvency I:

FBD Insurance plc had a Solvency I level of 46.9% of net premium earned at 31 December 2015, which represents 209% (2014: 366%) of the Solvency I minimum solvency margin, and had a reserving ratio of 270% (2014: 240%).

 

Solvency II:

The solvency capital requirement ("SCR") is the amount of capital which the company needs to hold to withstand a 1 in 200 year event or series of events. This is a risk based calculation which stresses the main risks faced by a general insurance company, namely underwriting and reserving risk, catastrophe risk, market risk, operational risk and default risk. The solvency capital ratio is the ratio of the capital available to the capital requirement. A solvency capital ratio of over 100% means that FBD has sufficient capital within the business to withstand a 1 in 200 year event as described by Solvency II.

 

Solvency II became effective from 1 January 2016 and is a higher capital standard and one which creates more volatility in the solvency calculation. The capital actions taken by the Group over the past number of months, which included the issue of the €70m Solvency II compliant convertible bond, the divestment of its share in the property and leisure joint venture for €48.5m and the subsequent investment of the proceeds as equity in FBD Insurance plc, and the restructuring of the Group's defined benefit pension scheme, have led to a substantial increase in the Group's economic capital over the course of the second half of 2015. The Group's economic capital is within its long term target range of 110-130% of SCR.

 

Investment Allocation

This table shows the assets of the Group.

31 December 2015

31 December 2014

Underwriting investment assets

€m

%

€m

%

Deposits and cash

398

39%

511

58%

Corporate bonds

432

43%

224

25%

Government bonds

101

10%

46

5%

Equities

24

2%

41

5%

Unit trusts

25

2%

25

3%

Own land & buildings

16

2%

16

2%

Investment property

15

2%

20

2%

Underwriting investment assets

1,011

100%

883

100%

Working capital & other assets

117

118

Reinsurers' share of provisions

80

57

Investment in joint venture

-

47

Plant and equipment

56

47

Total assets

1,264

1,152

 

Investment Background

The introduction of quantitative easing by the ECB and continuing low interest rates for the Euro area present challenging investment yield conditions. The divergence in monetary policy between Europe and the US brings market volatility. This divergence, when coupled with uneven global growth and elevated geopolitical risks, justifies our cautious strategy that seeks to minimise volatility in our investment portfolio.

FBD's Investment Allocation

In early 2015 the Group reduced allocation to equities due to our perception of stretched valuations and the poor macro-economic outlook. The Group also divested some development land. Both actions reduced risk assets from 9% to 6%. The Group believes this is an appropriate strategy at this time. The Group holds 92% of its underwriting assets in cash and short dated bonds at 31 December 2015. This large liquid position creates flexibility to act as conditions change and as investment opportunities present themselves. The interest rate environment and the introduction of Solvency II in 2016 provides an opportunity to further develop our strategic asset allocation and reposition the portfolio to deliver sustainable returns over the medium term. The sell-off in financial markets in Q4 allowed the Group to reposition its allocation to corporate bonds at modestly improved book yields.

Dividends

As noted in the half yearly report published in August 2015, the Board has decided that no final dividend will be recommended for 2015.

 

OUTLOOK

Economic indicators continue to point to an expanding domestic economy. This improved outlook for Ireland will be positive for FBD in the medium term. The Irish insurance market continued to grow in 2015, as insurers increased rates following market losses. There was increasing evidence of claims inflation coupled with the higher increased level of frequency experienced in a recovering economy. Insurance rates have hardened considerably in 2015 for both motor insurance and business insurance. The Group expects this trend to continue into 2016.

Despite rate hardening, industry profitability continues to be challenging, and the Group believes that the industry will continue to be loss making for 2016, as the market has not yet increased rates sufficiently to compensate for the significant deterioration in the claims environment. The Group's weather loss experience since the start of 2016 was not severe.

A lot of progress has been made in delivering the key intermediate objectives outlined in 2015. There is still considerable work to be undertaken to return the Group to profitability. The Group's focus on a more simplified strategy will enable it to achieve its goals. FBD will dedicate its resources primarily to its direct agricultural, small business and consumer customers, and will concentrate on those markets where it has developed a significant competitive advantage. The Group will also focus on a single FBD brand strategy. This strategy will deliver sustainable efficiencies and better returns. FBD's business model remains sound, and it has the customers, infrastructure and underwriting experience to return to profitability.  

The Group is committed to taking whatever action is required to return the business to profitability. The Group intends to maintain underwriting discipline and to deliver sustainable shareholder value through growth in book value.

The Group restates its ambition to achieve a sub-100% combined operating ratio by Q4 2016, and a full year's underwriting profitability in 2017. The expectation for 2016 is that for the full financial year the business will make a modest loss after tax. Previously FBD had targeted Return on Equity (ROE) of 18% through the underwriting cycle. The advent of Solvency II brings higher capital levels. Combined with a prolonged low interest rate environment this means a ROE target of 10-12% is more appropriate in the medium term.

FBD has a proud track record of profitable business and excellent customer relationships with its farming, small business and consumer customers. Although 2015 has been a very challenging year and market conditions remain difficult in an inherently cyclical industry, the Board is confident that FBD is on the right path to recovery.

 

FBD HOLDINGS PLC

29 February 2016

 

PRELIMINARY ANNOUNCEMENT

For the year ended 31 December 2015

 

FBD Holdings plc

Consolidated Income Statement

For the year ended 31 December 2015

 

Restated

Continuing Operations

2015

2014

€000s

€000s

Revenue

403,532

406,263

Income

Gross premium written

363,263

363,735

Reinsurance premiums

(50,497)

(52,312)

Net premium written

312,766

311,423

Change in provision for unearned premiums

388

(7,979)

Net premium earned

313,154

303,444

Net investment return

20,260

26,068

Financial services income

14,277

15,380

Total income

347,691

344,892

Expenses

Net claims and benefits

(341,260)

(252,091)

Other underwriting expenses

(85,725)

(81,786)

Other charges

(11,581)

(7,259)

Financial services expenses

(10,325)

(10,173)

Revaluation of property, plant and equipment

175

1,480

Restructuring and other costs

(11,415)

-

Finance costs

(1,357)

-

Pension curtailment

28,340

-

Result before taxation from continuing operations

(85,457)

(4,937)

Income taxation credit

11,222

1,013

Result for the financial year from continuing operations

(74,235)

(3,924)

Discontinued operations

Result for the financial year from discontinued operations, including loss from sale

668

1,930

Result for the financial year

(73,567)

(1,994)

 

Attributable to:

Equity holders of the parent

(73,685)

(2,089)

Non-controlling interests

118

95

(73,567)

(1,994)

Loss per share

Restated

2015

2014

From continuing operations

Cent

Cent

Basic

(215)

(13)

Diluted

(215)

(13)

From continuing and discontinued operations

Basic

(213)

(7)

Diluted

(213)

(7)

 

 

FBD Holdings plc

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2015

 

2015

Restated2014

€000s

€000s

Result for the financial year

(73,567)

(1,994)

Items that will or may be reclassified to profit or loss in subsequent periods:

Net (loss)/gain on available for sale financial assets during the year

 

(1,762)

 

1,028

Taxation credit/(charge) relating to items that will or may be reclassified to profit or loss in subsequent periods

 

698

 

(257)

Items that will not be reclassified to profit or loss in subsequent periods:

Actuarial gain/(loss) on retirement benefit obligations

15,914

(25,058)

Taxation (charge)/credit relating to items not to be reclassified in subsequent periods

 

 

 

(1,989)

 

3,214

Other comprehensive income/(expense) after taxation

 

12,861

 

(21,073)

Total comprehensive expense for the financial year

 

(60,706)

 

(23,067)

Attributable to:

Equity holders of the parent

(60,824)

(23,162)

Non-controlling interests

118

95

(60,706)

(23,067)

 

 

FBD Holdings plc

Consolidated Statement of Financial Position

At 31 December 2015

 

ASSETS

Restated

2015

2014

€000s

€000s

Property, plant and equipment

72,617

62,625

Investment property

14,550

19,959

Investment in joint venture

-

47,167

Loans

832

971

Deferred taxation asset

13,139

5,572

 

 

Financial assets

Available for sale investments

489,837

224,977

Investments held for trading

94,375

116,428

Deposits with banks

371,333

494,909

955,545

836,314

 

Reinsurance assets

Provision for unearned premiums

15,332

16,010

Claims outstanding

64,751

41,300

80,083

57,310

Retirement Benefit Asset

9,110

-

Current taxation asset

8,813

8,742

Deferred acquisition costs

27,545

28,427

Other receivables

59,506

58,951

Cash and cash equivalents

22,244

26,190

Total assets

1,263,984

1,152,228

 

 

FBD Holdings plc

Consolidated Statement of Financial Position (continued)

At 31 December 2015

 

EQUITY AND LIABILITIES

 

2015

Restated

2014

€000s

€000s

Equity

Called up share capital presented as equity

21,409

21,409

Capital reserves

18,553

18,756

Retained earnings

157,670

230,444

Other reserves

18,232

-

Shareholders' funds - equity interests

215,864

270,609

Preference share capital

2,923

2,923

Equity attributable to equity holders of the parent

218,787

273,532

Non-controlling interests

451

483

Total equity

219,238

274,015

Liabilities

Insurance contract liabilities

Provision for unearned premiums

178,584

179,650

Claims outstanding

748,144

593,983

926,728

773,633

Other provisions

10,938

7,920

Convertible debt

50,036

-

Retirement benefit obligation

-

54,254

Deferred taxation liability

2,990

5,266

Payables

54,054

37,140

Total liabilities

1,044,746

878,213

Total equity and liabilities

1,263,984

1,152,228

 

 

 

 

 

FBD Holdings plc

Consolidated Statement of Cash Flows

For the year ended 31 December 2015

 

2015

Restated

2014

€000s

€000s

Cash flows from operating activities

Loss before taxation

(84,789)

(3,007)

Adjustments for:

Gain on investments held for trading

(535)

(3,709)

Loss on investments held to maturity

-

288

Loss on investments available for sale

5,493

2,284

Interest and dividend income

(13,123)

(13,352)

Depreciation of property, plant and equipment

8,392

8,197

Share-based payment (credit)/expense

(203)

944

Revaluation of investment property

(3,450)

(9,261)

Revaluation of property, plant and equipment

(175)

(1,480)

Profit on the sale of investment property

(8,915)

(324)

Increase in insurance contract liabilities

130,320

63,523

Movement in other provisions

3,018

(920)

Effect of foreign exchange rate changes

(485)

(160)

Profit on disposal of property, plant and equipment

-

(19)

Joint venture trading result

(1,461)

(1,930)

Operating cash flows before movement in working capital

34,087

41,074

Decrease in receivables and deferred acquisition costs

1,004

3,900

Decrease in payables

(30,408)

(3,229)

Cash generated from operations

4,683

41,745

Interest and dividend income received

12,339

16,795

Income taxes refunded /(paid)

126

(2,684)

Net cash from operating activities

17,148

55,856

Cash flows from investing activities

Purchase of investments held for trading

(32,561)

(45,545)

Sale of investments held for trading

55,149

143,057

Realisation of investments held to maturity

-

30,000

Purchase of available for sale investments

(408,318)

(129,453)

Sale of available for sale investments

136,202

45,117

Purchase of property, plant and equipment

(18,209)

(24,094)

Sale of property, plant and equipment

-

339

Sale of investment property

18,259

1,353

Decrease in loans and advances

139

65

Decrease/(increase) in deposits invested with banks

123,577

(56,932)

Net cash inflow from sale of joint venture

48,500

-

Net cash used in investing activities

(77,262)

(36,093)

Cash flows from financing activities

Ordinary and preference dividends paid

(11,950)

(17,505)

Dividends paid to non-controlling interests

(150)

(75)

Proceeds from issue of convertible bond

68,268

-

Proceeds of re-issue of ordinary shares

-

2,421

Net cash used in financing activities

56,168

(15,159)

Net (decrease)/increase in cash and cash equivalents

(3,946)

4,604

Cash and cash equivalents at the beginning of the year

26,190

21,586

Cash and cash equivalents at the end of the year

22,244

26,190

 

 

FBD Holdings plc

Consolidated Statement of Changes in Equity

For the year ended 31 December 2015

 

Called up share capital presented as equity

Capital reserves

Retained earnings

Other Reserves

Attributable to ordinary shareholders

Preference share capital

Non-controlling interests

Total equity

€000s

€000s

€000s

€000s

€000s

€000s

€000s

€000s

Balance at 1 January 2014 - restated

 

21,409

 

17,812

 

268,690

 

-

 

307,911

 

2,923

 

463

 

311,297

Loss after taxation - restated

-

-

(2,089)

-

(2,089)

-

95

(1,994)

Other comprehensive expense

-

-

(21,073)

-

(21,073)

-

-

(21,073)

21,409

17,812

245,528

-

284,749

2,923

558

288,230

Dividends paid and approved on ordinary and preference shares

 

-

 

-

 

(17,505)

 

-

 

(17,505)

 

-

 

-

 

(17,505)

Reissue of ordinary shares

-

-

2,421

-

2,421

-

-

2,421

Recognition of share based payments

-

944

-

-

944

-

-

944

Dividend paid to non-controlling interests

-

-

-

-

-

-

(75)

(75)

Balance at 31 December 2014 - restated

 

21,409

 

18,756

 

230,444

 

-

 

270,609

 

2,923

 

483

 

274,015

Loss after taxation

-

-

(73,685)

-

(73,685)

-

118

(73,567)

Other comprehensive income

-

-

12,861

-

12,861

-

-

12,861

21,409

18,756

169,620

-

209,785

2,923

601

213,309

Issue of convertible bond

-

-

-

18,232

18,232

-

-

18,232

Dividends paid and approved on ordinary and preference shares

 

-

 

-

 

(11,950)

 

-

 

(11,950)

 

-

 

-

 

(11,950)

Recognition of share based payments

-

(203)

-

-

(203)

-

-

(203)

Dividend paid to non-controlling interests

-

-

-

-

-

-

(150)

(150)

Balance at 31 December 2015

 

21,409

 

18,553

 

157,670

 

18,232

 

215,864

 

2,923

 

451

 

219,238

 

 

FBD Holdings plc

Supplementary Information

For the year ended 31 December 2015

 

Note 1 Underwriting LOSS

Restated

2015

2014

€000s

€000s

Gross premium written

363,263

363,735

Net premium earned

313,154

303,444

Net claims incurred

(341,260)

(252,091)

Net underwriting expenses

(85,725)

(81,786)

Underwriting loss

(113,831)

(30,433)

 

 

2015

2014

Net underwriting expenses

€000s

€000s

Management expenses

92,307

91,089

Deferred acquisition costs

882

(1,998)

Gross underwriting expenses

93,189

89,091

Reinsurance commissions receivable

(12,799)

(13,121)

Broker commission payable

5,335

5,816

 

Net underwriting expenses

 

85,725

 

81,786

 

 

 

 

 

FBD Holdings plc

Supplementary Information (continued)

For the year ended 31 December 2015

 

Note 2 LOSS PER €0.60 ORDINARY SHARE

 

The calculation of the basic and diluted earnings per share attributable to the ordinary shareholders is based on the following data:

 

2015

Restated

2014

Earnings

€000s

€000s

Loss for the year

(73,567)

(1,994)

Non-controlling interests

(118)

(95)

Preference dividends

(169)

(282)

Loss for the purpose of basic and diluted earnings per share

(73,854)

(2,371)

Adjustments to exclude profit for the year from discontinued operations

 

(668)

 

(1,930)

Earnings from continued operations for the purpose of basic and diluted earnings per share excluding discontinued operations

 

(74,522)

 

(4,301)

Number of shares

2015

2014

Weighted average number of ordinary shares for the purpose of

basic earnings per share (excludes treasury shares)

34,648,122

34,414,709

From continuing operations

Cent

Cent

Basic earnings per share

(215)

(13)

Diluted earnings per share

(215)

(13)

From discontinued operations

Cent

Cent

Basic earnings per share

2

6

Diluted earnings per share

2

6

 

 

The 'A' ordinary shares of €0.01 each that are in issue have no impact on the earnings per share calculation.

FBD Holdings plc

Supplementary Information (continued)

For the year ended 31 December 2015

 

Note 3 DIVIDENDS

2015

2014

Paid during year:

€000s

€000s

2014 final dividend of 34.0 cent (2013: 33.25 cent) per share on ordinary shares of €0.60 each

 

11,781

 

11,333

2015 interim dividend of nil cent (2014: 17.00 cent) per share on ordinary shares of €0.60 each

 

-

 

5,890

Dividend of 4.8 cent (2014: 4.8 cent) per share on 8% non-cumulative preference shares of €0.60 each

 

169

 

169

Dividend of nil cent (2014: 8.4 cent) per share on 14% non-cumulative preference shares of €0.60 each

 

-

 

113

Total dividends paid

11,950

17,505

 

 

2015

2014

Proposed:

€000s

€000s

Dividend of nil cent (2014: 4.8 cent) per share on 8% non-cumulative preference shares of €0.60 each

 

-

 

169

Final dividend of nil cent (2014: 33.25 cent) per share on ordinary shares of €0.60 each

 

-

11,780

Total dividends proposed

-

11,949

 

 

FBD Holdings plc

Supplementary Information (continued)

For the year ended 31 December 2015

 

Note 4 CALLED UP SHARE CAPITAL PRESENTED AS EQUITY

 

Number

2015

2014

€000s

€000s

(i) Ordinary shares of €0.60 each

Authorised:

At the beginning and the end of the year

51,326,000

30,796

30,796

Issued and fully paid:

At the beginning and the end of the year

35,461,206

21,277

21,277

(ii) 'A' Ordinary shares of €0.01 each

Authorised:

At the beginning and the end of the year

120,000,000

1,200

1,200

Issued and fully paid:

At the beginning and the end of the year

13,169,428

132

132

Total - issued and fully paid

21,409

21,409

 

The 'A' ordinary shares of €0.01 each are non-voting. They are non-transferable except only to the Company. Other than a right to a return of paid up capital of €0.01 per 'A' ordinary share in the event of a winding up, the 'A' ordinary shares have no right to participate in the capital or the profits of the Company.

The holders of the two classes of non-cumulative preference shares rank ahead of the two classes of ordinary shares in the event of a winding up. Before any dividend can be declared on the ordinary shares of €0.60 each, the dividend on the non-cumulative preference shares must firstly be declared or paid.

 

The number of ordinary shares of €0.60 each held as treasury shares at the beginning and the end of the year (and the maximum number held during the year) was 813,084. This represented 2.3% of the shares of this class in issue and had a nominal value of €487,850. There were no ordinary shares of €0.60 each purchased by the Company during the year. No shares were re-issued from treasury during the year under the FBD Holdings plc Executive Share Option Scheme or the FBD Performance Share Plan.

The weighted average number of ordinary shares of €0.60 each in the earnings per share calculation has been reduced by the number of such shares held in treasury.

 

All issued shares have been fully paid.

 

 

FBD Holdings plc

Supplementary Information (continued)

For the year ended 31 December 2015

 

Note 5 TRANSACTIONS WITH RELATED PARTIES

 

Farmer Business Developments plc has a substantial shareholding in the Group at 31 December 2015. Details of their shareholding and related party transactions are set out in the Annual Report.

 

Included in the Financial Statements at the year-end is € Nil (2014: €67,500) due from Farmer Business Developments plc. This balance is made up of recharges for services provided and recoverable costs. The amount due is repayable on demand.

 

Transactions with Farmer Business Developments plc

2015

2014

€000s

€000s

Opening balance

67

530

Management charges

75

67

Payments by related party

(142)

(530)

Closing balance

0

67

 

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 Company) comprises the Board of Directors and Company Secretary of FBD Holdings plc and the Group's primary subsidiary, FBD Insurance plc and the members of the Executive Management Team.

 

The remuneration of key management personnel ("KMP") during the year was as follows:

2015

2014

€000s

€000s

Short term employee benefits1

2,594

2,476

Post-employment benefits

249

294

Share based payments

552

466

Charge to the Consolidated Income Statement

3,395

3,236

 

1Short term benefits include fees to non-executive Directors, salaries and other short-term benefits to all members of the KMP.

 

Full disclosure in relation to the 2015 and 2014 compensation entitlements and share options of the Board of Directors is provided in the Annual Report.

 

In common with all shareholders, Directors received payments/distributions related to their holdings of shares in the Company during the year, amounting in total to €56,280 (2014: €70,292).

 

Details of Directors' share options are also outlined in the Annual Report.

 

FBD Holdings plc

Supplementary Information (continued)

For the year ended 31 December 2015

 

Note 6 CHANGE IN BASIS OF MEASUREMENT

The basis of measurement of the provision for the Motor Insurers' Bureau of Ireland "MIBI" in the Group's largest subsidiary, FBD Insurance plc, has changed effective from 1 January 2015 and hence, 2014 comparatives have been restated. Previously, FBD Insurance plc, calculated this provision based on the estimated current market share of the Irish motor insurance market and the current outstanding claims of MIBI.

 

Under the revised market convention, insurance companies writing motor business will provide for their share of the MIBI levy for the following year only, based on their estimated market share in the current financial year at the balance sheet date. Therefore this change in measurement basis has also been reflected in the Group financial statements. The provision for MIBI levy has been disclosed separately as "other provisions" on the Consolidated Statement of Financial Position.

 

This change in the basis of measurement has resulted in the following adjustments to the opening reserves in the Consolidated Statement of Financial Position at 1 January 2014:

01/01/14 as previously stated

01/01/14 Impact of change

 

01/01/14 Restated

€000s

€000s

€000s

Consolidated Statement of Financialposition at 1 January 2014

Equity: Retained earnings

237,993

30,697

268,690

Liabilities: Claims outstanding

565,611

(43,922)

521,689

Liabilities: Other provisions

-

8,840

8,840

Liabilities: Deferred taxation liability

691

4,385

5,076

This change in the basis of measurement has resulted in the following adjustments to the December 2014 comparatives within the Group Consolidated Income Statement:

31/12/14 as previously stated

31/12/14 Impact of change

 

31/12/14 Restated

€000s

€000s

€000s

Consolidated Income Statement

Expenses

Net claims and benefits

(260,870)

8,779

(252,091)

Other provisions

-

(7,259)

(7,259)

Result before taxation

(4,527)

1,520

(3,007)

Income taxation credit/(charge)

1,203

(190)

1,013

Result for the period

(3,324)

1,330

(1,994)

(Loss)/earnings per share

Cent

Cent

Cent

Basic

(11)

4

(7)

Diluted

(11)

4

(7)

Operating (loss)/earnings per share

(13)

4

(9)

Consolidated Statement of Financialposition at 31 December 2014

Equity: Retained earnings

198,417

32,027

230,444

Liabilities: Claims outstanding

638,504

(44,521)

593,983

Liabilities: Other provisions

-

7,920

7,920

Liabilities: Deferred taxation liability

691

4,575

5,266

FBD Holdings plc

Supplementary Information (continued)

For the year ended 31 December 2015

 

Note 7 Subsequent Events

 

There have been no subsequent events which would have a material impact on the Financial Statements.

 

 

Note 8 General Information and Accounting Policies

 

The financial information set out in this document does not constitute full statutory Financial Statements for the years ended 31 December 2015 or 2014 but is derived from same. The Group Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRSs), applicable Irish law and the listing Rules of the Irish Stock Exchange and the Financial Conduct Authority. The Group Financial Statements have also been prepared in accordance with IFRSs adopted by the European Union and therefore comply with Article 4 of the EU IAS Regulation.

 

The 2015 and 2014 Financial Statements have been audited and received unqualified audit reports. The 2015 Financial Statements were approved by the Board of Directors on 26 February 2016.

 

The Consolidated Financial Statements are prepared under the historical cost convention as modified by the revaluation of property, investments held for trading, available for sale investments and investment property which are measured at fair value.

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR SELFWMFMSEFE
Date   Source Headline
24th May 20245:47 pmRNSDirector/PDMR Shareholding
22nd May 20247:00 amRNSDirectorate Change
16th May 20243:03 pmRNSAdditional Listing
9th May 20243:21 pmRNSResult of AGM
9th May 20247:00 amRNSTrading Statement
8th May 20243:37 pmRNSTotal Voting Rights
22nd Apr 202412:37 pmRNSHolding(s) in Company
22nd Apr 202410:33 amRNSHolding(s) in Company
18th Apr 20249:40 amRNSHolding(s) in Company
17th Apr 20242:40 pmRNSDirector/PDMR Shareholding
16th Apr 20244:49 pmRNSTotal Voting Rights
16th Apr 20243:52 pmRNSDirector/PDMR Shareholding
15th Apr 20243:59 pmRNSDeath of Independent Non-Executive Director
5th Apr 20241:26 pmRNSHolding(s) in Company
27th Mar 20244:20 pmRNSProposed UK Delisting Resolution
27th Mar 20243:46 pmRNSNotice of AGM
26th Mar 20245:39 pmRNSHolding(s) in Company
12th Mar 20245:06 pmRNSHolding(s) in Company
12th Mar 20247:00 amRNSTransaction in Own Shares
8th Mar 20247:00 amRNSFinal Results
13th Feb 20244:44 pmRNSTrading Statement
22nd Dec 202310:58 amRNSHolding(s) in Company
21st Dec 20235:00 pmRNSHolding(s) in Company
13th Dec 20233:26 pmRNSDirector/PDMR Shareholding
11th Dec 202312:13 pmRNSFinancial Calendar 2024
12th Sep 20233:43 pmRNSDirector/PDMR Shareholding
1st Sep 20232:00 pmRNSDirectorate Change
17th Aug 20236:26 pmRNSHolding(s) in Company
17th Aug 20236:16 pmRNSHolding(s) in Company
17th Aug 20238:29 amRNSHolding(s) in Company
11th Aug 20237:00 amRNSHalf-year Report
20th Jun 20233:54 pmRNSDirector/PDMR Shareholding
2nd Jun 20233:07 pmRNSDirector/PDMR Shareholding
26th May 20234:51 pmRNSDirector/PDMR Shareholding
11th May 20233:38 pmRNSResult of AGM
11th May 20237:00 amRNSTrading Statement
28th Apr 20232:00 pmRNSDirectorate Change
20th Apr 20234:13 pmRNSHolding(s) in Company
19th Apr 20233:17 pmRNSHolding(s) in Company
18th Apr 202311:58 amRNSHolding(s) in Company
18th Apr 20237:55 amRNSHolding(s) in Company
17th Apr 20235:21 pmRNSHolding(s) in Company
14th Apr 20233:05 pmRNSTotal Voting Rights
13th Apr 20239:01 amRNSHolding(s) in Company
6th Apr 20231:11 pmRNSAdditional Listing
5th Apr 20233:52 pmRNSDirector/PDMR Shareholding
3rd Apr 20234:00 pmRNSNotice of AGM
10th Mar 20237:00 amRNSFinal Results
6th Mar 20231:35 pmRNSHolding(s) in Company
6th Mar 202310:38 amRNSHolding(s) in Company

Due to London Stock Exchange licensing terms, we stipulate that you must be a private investor. We apologise for the inconvenience.

To access our Live RNS you must confirm you are a private investor by using the button below.

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.