12th May 2008 12:37
12 May 2008
Gable Holdings Inc
("Gable" or "the Company")
Preliminary Results for the year ended 31 December 2007
Gable Holdings Inc (ticker: GAH), the European insurance company to the building and construction sector, announces its audited results for the year ended 31 December 2007.
Summary
Gross written premium of £6.0 million (2006: £6.2 million)
Earned premium of £ 6.3 million (2006: £3.6 million)
Increase in net insurance margin from 17% to 26%
Profit before tax of £0.51 million (2006: Loss £0.25 million)
Total profit on reserves of £0.73 million (2006: Loss £0.5 million), including currency movements taken directly to reserves under FRS
Commenting on Outlook, William Dewsall, Chief Executive, Gable Holdings Inc, said:
"Our renewal book is solid, giving us a strong start to the year and despite the challenging market conditions we remain focused on our core strategy of only writing profitable business. With the addition of new markets in Europe the Board remains confident that it is well placed to meet its expectations for the current year."
Enquiries: www.gableholdings.com
|
William Dewsall, Chief Executive, Gable Holdings Inc |
tel: +44 (0) 20 7337 7460 |
|
Chris Fielding, Arden Partners |
tel: +44 (0) 20 7398 1600 |
|
John Bick, Hansard Group |
tel: +44 (0) 20 7245 1100 |
Preliminary Statement
The Board of Gable is pleased to present its audited results for the year ended 31 December 2007. These are the second results announced by the company which incorporate the results from Gable's insurance company, Gable Insurance AG ("GIAG").
These results are presented under International Financial Reporting Standards and the effect of this on the prior period results is explained in the notes below.
Business Review
Since the Company announced interim results in September 2007, the business has continued to perform well, particularly against the backdrop of a UK insurance market which remained challenging throughout 2007.
The Company's renewal book has been solid and despite the competitive market conditions, Gable has continued to write profitable business. The Company has now entered into two new markets in Europe, France and Spain, where it has commenced writing new business during the first half of the 2008.
Results
A summary of the results are set out in the table below:
|
Year ended 31 December |
|||
|
2007 |
2006 |
||
|
£000s |
£000s |
||
|
Gross written premiums |
6,040 |
6,214 |
|
|
Change in provision for gross unearned premiums |
276 |
(2,626) |
|
|
Gross earned premiums |
6,316 |
3,588 |
|
|
Net earned premiums |
4,097 |
2,313 |
|
|
Net claims incurred |
(1,473) |
(1,017) |
|
|
Expenses incurred in insurance activities |
(1,579) |
(908) |
|
|
Net insurance result |
1,045 |
388 |
|
|
Net insurance margin |
25.5% |
16.8% |
|
|
Profit from operations and before taxation |
514 |
(242) |
|
|
Taxation |
(8) |
(10) |
|
|
Profit for the period attributable |
|||
|
to equity holders of the Company |
506 |
(252) |
|
|
Exchange movements credited to reserves |
224 |
(193) |
|
|
TOTAL RESERVE MOVEMENT |
730 |
(445) |
|
|
Earnings per share - basic & diluted |
0.45p |
(0.23)p |
|
GIAG's solvency position remains very strong and exceeds the requirement for our current and currently anticipated growth strategies. The reported result for the year shows a profit of £0.51 million (2006: loss of £0.25 million). Taking account of exchange movements credited directly to reserves under Financial Reporting Standards, the total profit transferred to reserves is £0.73m (2006: Loss of £0.5m). At the end of the period net assets were £9.3 million (2006: £8.5 million). Cash balances at the end of the period were £4.9 million.
The performance of Gable's internet based quotation system has proved to be excellent and continues to provide one of the lowest fixed cost bases in the industry and provides a scalable platform as the business grows. With the company moving into other markets the system has the ability to evolve providing the same efficiencies.
During the period GIAG purchased its new reinsurance programme, commencing 1 July 2007, which is considerably more cost effective than its previous programme and is also led by an AA rated insurer and the benefits of this new programme will be seen during the current year but will be markedly seen in 2009 as the relevant premium is earned
Over the year the trading conditions in the UK have remained challenging but GIAG has continued to write profitable business with its network of brokers in the UK. During the period the Company has extended its broker base considerably and looks to broaden this base further over the current year.
Board
On 20 September the Company announced the appointment of Lance Ranger as a Non-Executive Director. Lance was subsequently appointed Non-Executive Chairman in February of 2008 replacing Geoffrey Conway Henderson who stepped down from the Board. Ours thanks to both Geoffrey and Joanna Barrett, who stepped down from the Board as Non-Executive Director at the Company's last AGM. We welcome Lance who is an international trust lawyer based in Switzerland and specialises in international law and tax planning where he has over 20 years experience advising a range of international clients.
Current Trading and Outlook
Gable is pleased to announce that it has commenced writing business in France and Spain, concentrating on both the commercial and construction sectors within both geographic markets offering specifically tailored products which meet market requirements in those jurisdictions. Gable has already developed very effective working relationships with major corporate brokers in these territories and is looking forward to developing a strong book of business in the coming years. Along with these two markets Gable has identified other territories where conditions would be favourable and will update shareholders when appropriate.
The Board believes that the principal challenge it faces in building on its excellent start over the first year is to continue to write profitable business in what is a competitive market place.
The UK Construction insurance market continues to be competitive, however, the board is encouraged by the outlook for 2009. Gable will continue to work closely with its UK and European brokers to ensure it continues to deliver products that the market will respond to, thereby ensuring we are in a good strategic position to take advantage of any market upturn.
Whilst the levels of new business being seen by Gable remains high we will continue with our stated objective of writing profitable business alongside prudent risk management. As the results to date show, this strategy is producing low loss ratios and increased profit performance.
Our renewal book is solid, giving us a strong start to the year and despite the challenging market conditions we remain focused on our core strategy of only writing profitable business. With the addition of new markets in Europe the Board remains confident that it is well placed to meet its expectations for the current year.
William Dewsall
Chief Executive
12 May 2008
Consolidated Income Statement
For the year ended 31 December 2007
|
Year ended 31 December 2007 £000s |
Year ended 31 December 2006 £000s |
||
|
Gross written premiums |
6,040 |
6,214 |
|
|
Change in provision for gross unearned premiums |
276 |
(2,626) |
|
|
Gross earned premiums |
6,316 |
3,588 |
|
|
Outward reinsurance premiums |
(1,900) |
(2,195) |
|
|
Change in provision for unearned |
|||
|
premiums - reinsurers' share |
(319) |
920 |
|
|
Net earned premiums |
4,097 |
2,313 |
|
|
Net investment return |
64 |
69 |
|
|
Total revenue from operations |
4,161 |
2,382 |
|
|
Gross claims paid |
(444) |
(29) |
|
|
Movement in gross technical provisions |
(1,029) |
(988) |
|
|
Gross claims incurred |
(1,473) |
(1,017) |
|
|
Reinsurers' share of gross claims paid |
- |
- |
|
|
Movement in reinsurers' share of technical provisions |
- |
- |
|
|
Reinsurers share of claims incurred |
- |
- |
|
|
Net claims incurred |
(1,473) |
(1,017) |
|
|
Expenses incurred in insurance activities |
(1,579) |
(908) |
|
|
Other operating expenses |
(595) |
(699) |
|
|
Total operating charges |
(2,174) |
(1,607) |
|
|
Profit from operations and before taxation |
514 |
(242) |
|
|
Taxation |
(8) |
(10) |
|
|
Profit for the period attributable |
|||
|
to equity holders of the Company |
506 |
(252) |
|
|
Earnings per share - basic & diluted |
0.45p |
(0.23)p |
All operations are continuing.
Audited Consolidated Balance Sheet
At 31 December 2007
|
31 December 2007 £000s |
31 December 2006 £000s |
||
|
Assets |
|||
|
Intangible assets |
4,250 |
4,250 |
|
|
Tangible fixed assets |
182 |
242 |
|
|
Reinsurers' share of technical provisions |
- |
- |
|
|
Deferred acquisition and reinsurance costs |
1,206 |
1,606 |
|
|
Prepayments and accrued income |
2,010 |
806 |
|
|
Trade and other receivables |
1,457 |
959 |
|
|
Financial assets |
- |
3,703 |
|
|
Cash and cash equivalents |
4,898 |
968 |
|
|
Total assets |
14,003 |
12,534 |
|
|
Equity |
|||
|
Share capital |
281 |
281 |
|
|
Share premium account |
5,406 |
5,406 |
|
|
Share based premium reserve |
20 |
20 |
|
|
Other reserves |
3,875 |
3,875 |
|
|
Retained earnings |
(291) |
(1,021) |
|
|
Total equity attributable to equity holders and total equity |
9,291 |
8,561 |
|
|
Liabilities |
|||
|
Technical provisions |
4,367 |
3,614 |
|
|
Accruals and deferred income |
50 |
34 |
|
|
Trade and other payables |
295 |
325 |
|
|
Total liabilities |
4,712 |
3,973 |
|
|
Total liabilities and shareholders' funds |
14,003 |
12,534 |
|
|
Net asset value per ordinary share |
8.28p |
7.63p |
Consolidated Cash Flow Statement
For the year ended 31 December 2007
|
Year ended 31 December 2007 £000s |
Year ended 31 December 2006 £000s |
||
|
Cash flows from operating activities |
|||
|
Cash generated from operations |
158 |
(97) |
|
|
Interest received |
69 |
37 |
|
|
Net cash flows from operating activities |
227 |
(60) |
|
|
Cash flows from investing activities |
|||
|
Sale of financial assets |
3,703 |
(3,703) |
|
|
Purchase of tangible fixed assets |
- |
(227) |
|
|
Net cash flows from investing activities |
(3,930) |
||
|
Cash flows from financing activities |
|||
|
Shares issued |
- |
100 |
|
|
Share issue costs |
- |
- |
|
|
Net cash flows from financing activities |
- |
100 |
|
|
Net increase/(decrease) in cash and cash equivalents |
3,930 |
(3,890) |
|
|
Cash and cash equivalents at period beginning |
968 |
4,858 |
|
|
Cash and cash equivalents at period end |
4,898 |
968 |
|
Notes to the Consolidated Financial Statements
For the year ended 31 December 2007
1. Basis of preparation
The Company was incorporated as a Corporation in the Cayman Islands which does not prescribe the adoption of any particular accounting framework. The Board had previously resolved that the Group would follow UK Accounting Standards and apply the Companies Act 1985 when preparing its annual financial statements. For the period ended 31 December 2005, Gable adopted International Financial Reporting Standards ("IFRS") in its Group financial statements for the first time.
These financial statements have been prepared under the historical cost convention and in accordance with the requirements of International Financial Reporting Standards.
2. Profit and net asset value per share
The calculation of the basic profit per share is based on the net profit of £506,000 (2006: loss £252,000) divided by the weighted average number of shares in issue during the year of 112,200,000 (2006 : 111,700,274).
The net asset value per share is calculated by dividing the shareholders' funds of £9,291,000 (2006: £8,561,000) by the number of shares in issue at the end of the period - 112,200,000 (2006: 112,200,000).
3. Reconciliation of loss for the period before taxation to net cash flows from operating activities
|
Year Ended 31 December 2007 £000s |
Year ended 31 December 2006 £000s |
||
|
Profit for the period |
506 |
(252) |
|
|
Interest received |
(69) |
(69) |
|
|
Non-cash exchange movements |
224 |
(193) |
|
|
Depreciation of tangible fixed assets |
60 |
60 |
|
|
Increase in technical provisions |
753 |
3,614 |
|
|
Decrease/(increase) in deferred acquisition and reinsurance costs |
400 |
(1,606) |
|
|
Increase in debtors |
(1,702) |
(1,709) |
|
|
Decrease in creditors |
(14) |
58 |
|
|
158 |
(97) |
4. General information
The financial information for the year ended 31 December 2007 does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. Audited financial statements for the year ended 31 December 2007 will be sent to shareholders as soon as practicable.
Related Shares:
GAH.L