27th Sep 2006 07:02
Gable Holdings Inc27 September 2006 27 September 2006 GABLE HOLDINGS INC ("Gable" or "the Company" or "the Group") Unaudited Interim Results for the six months ended 30 June 2006 Gable Holdings Inc (AIM: GAH), the European insurance Group to the building andconstruction sector announces unaudited interim results for the six months ended30 June 2006. These results are the first to include revenues from Gable'sinsurance company, Gable Insurance AG ("Gable Insurance"). Summary of the Period • Gable Insurance started writing its first business in late January offering products to the construction industry in Great Britain and Ireland • A network comprising over 40 brokers has been established and is growing, from which Gable has received very strong support • Gable's internet based quotation system has proved very successful providing one of the lowest fixed cost bases in the industry and provides a scaleable platform as the business grows • To date Gable Insurance has seen over £85 million of potential business, and quoted over £70 million, both considerably higher than anticipated when trading commenced • The results for the six months ended 30 June 2006 show gross written premium of £4.1 million, but as this is the first period of account £3.2 million is unearned. Gross earned premium for the period was £0.9 million • Incurred claims equate to less than 1 per cent of gross written premium • The Board has prudently reserved a total of 12.5 per cent of premiums earned for unreported and incurred claims • The net insurance result equates to a profit of approximately 40 per cent (against a market estimate of 20 per cent) on gross earned premium • In line with management expectations for the first period there was a loss before tax of £43,000 Comment and Outlook William Dewsall, Chief Executive, Gable Holdings Inc, said: "The level of business being offered to the Group has exceeded expectationsdespite a market which has remained competitive throughout the period. Gablecontinues to increase the business written in accordance with its statedobjective of underwriting profitable business, with reference to prudent riskmanagement. "The Board is excited with the progress the Group has made over the last sixmonths, in particular, the quality of the insurance book written to date whichhas provided a solid foundation for the Group going into 2007. As the Groupenters the last quarter, which is a key renewal season for the industry, we areconfident that we will continue to see an increasing amount of quality business." Enquiries: John Bick t: 07917 649362 GABLE HOLDINGS INC. Unaudited Interim results for the six months ended 30 June 2006 The Board of Gable is pleased to present its unaudited results for the sixmonths ended 30 June 2006. These are the first results announced by the Companywhich incorporate the results from Gable's insurance company, Gable InsuranceAG. The Group has also, for the purposes of these financial statements, adoptedInternational Financial Reporting Standards for the first time and the effect ofthis on the prior period results is explained in the notes below. Business Review Following the Company's acquisition of Brown Duke AG in December 2005, aninsurance company registered and regulated in Liechtenstein (subsequentlyrenamed Gable Insurance AG), the Group offers the insurance products of GableInsurance in Great Britain and Ireland. Gable Insurance wrote its firstbusiness in January 2006, albeit later than anticipated as the Group awaitedfinal regulatory confirmation in the UK to commence underwriting business. As aresult the Company was not in a position to benefit from the significant earlyJanuary window for renewals. As a new insurance Group, the primary objective has been to start to build astable and profitable insurance book. The Board is pleased with the progressmade in this regard, both in the six months ended 30 June 2006 but also sincethat time. . Clearly building a new business with this objective will take timeand the results will only be fully seen as the claims position crystallises overtime. Notwithstanding this, the Board would like to provide the followingsummary information on how Gable Insurance's book is being developed: • The Company is currently offering products to the construction industry in Great Britain and Ireland, namely: • Contractors' All Risks (CAR) • Employers' Liability (EL) • Public Liability (PL) • Commercial Combined (COM) • A network comprising over 40 brokers has been established and is growing, from which Gable has received very strong support • To date Gable Insurance has seen over £85 million of potential business, and quoted over £70 million, considerably higher than anticipated when trading commenced • Gable's internet based quotation system has proved very successful providing one of the lowest fixed cost bases in the industry and a scaleable platform as the business grows • Gable's system enables full data entry for each prospective risk by the brokers and enables Gable Insurance to fully manage risk assessment and premium quotation, through to automatic policy documentation Prior to commencing writing business in January 2006, Gable Insurance purchaseda appropriate reinsurance programme to provide suitable protection given itsunderwriting risk. Gable Insurance has continued to work with its reinsurersthroughout the period to ensure that this programme continues to meet itsrequirements as its business builds. All the reinsurers supporting theprogramme are A rated. Results The results for the six months ended 30 June 2006 show gross written premium of£4.1 million, but as this is the first period of account, £3.2 million of thisamount is unearned. As such, the insurance results are based on gross earnedpremium of £0.9 million. The net insurance result for the period is a profit of £366,000, which iscomprised as follows: £000s Gross earned premium 918Reinsurance (107)Claims incurred (115)Acquisition costs (230)Other direct expenses (100) 366 At the date of this announcement, incurred claims equate to less than 1 per centof gross written premium, however for the purposes of these results , the Boardhas considered it prudent to reserve a total of 12.5 per cent of premiums earnedfor unreported and incurred claims. Even allowing for this, the net insuranceresult equates to a profit of approximately 40 per cent on gross earned premium(against a market estimate of 20 per cent). Board and Senior Management The Board has announced today that Geoffrey Conway-Henderson has been appointedto the Board as Non-Executive Chairman with immediate effect. Geoffrey, age 60,has over 35 years experience in the finance industry, having worked in the moneymarkets as bank trader and then as a broker, dealing primarily in derivatives,interest rate swaps and options. From 1973 until 1987 he was Managing Directorat Harlow Meyer & Co. Following this he became a director of IntercapitalBrokers Limited, a subsidiary of Intercapital PLC, one of the world's largestinterdealer brokers, until his retirement in October 2003. Peter Williams has been Group Financial Controller of the Company since itsinception and has also fulfilled the role of Finance Director. The Boardbelieves that the corporate and financial experience that Peter offers has andcontinues to best suit the needs of Gable, particularly during the Group'scurrent phase of growth. The Board continuously reviews the need for afull-time Finance Director and will make a suitable appointment as and when thesituation changes. Outlook The level of business being offered to the Group has exceeded our expectations,despite a market which has remained competitive throughout the period. Gablecontinues to increase the business written in accordance with its statedobjective of underwriting profitable business, with reference to prudent riskmanagement. Gable Insurance will shortly launch a new range of products, both complimentaryto its existing product range and also within new markets. Gable Insurance isalso seeking to expand its geographic markets by extending its authorisation toGermany, France, Spain and Italy, where it will aim to replicate its brokernetwork. The Board is excited with the progress the Group has made over the last sixmonths, in particular, the quality of the insurance book written to date whichhas provided a solid foundation for the Group going into 2007. As the Groupenters the last quarter, which is a key renewal season for the industry, we areconfident that we will continue to see an increasing amount of quality business. Looking further out we believe that as tendering work commences for the 2012London Olympics we will start to see additional potential business in the UKmarket. William DewsallChief Executive27 September 2006 GABLE HOLDINGS INC.Consolidated Income StatementFor the six months ended 30 June 2006 Thirteen Six months Seven months months ended ended ended 30 June 30 June 31 December 2006 2005 2005 Notes £000s £000s £000s unaudited unaudited audited Gross written premiums 4,131 - -Change in provision for gross unearnedpremiums (3,213) - - Gross earned premiums 918 - - Outward reinsurance premiums (480) - -Change in provision for unearned premiums - reinsurers' share 373 - - Net earned premiums 811 - - Net investment return 5 44 12 24 Total revenue from operations 855 12 24 Gross claims paid - - -Movement in gross technical provisions (115) - - Gross claims incurred (115) - - Reinsurers' share of gross claims paid - - -Movement in reinsurers' share of technicalprovisions - - -Reinsurers share of claims incurred - - - Net claims incurred (115) - - Expenses incurred in insurance activities 6 (330) - - Other operating expenses (453) (213) (600) Total operating charges (783) (213) (600) Loss from operations and before taxation (43) (201) (576) Taxation 7 (3) - -Loss for the period attributable to equity holders of the Company 9 (46) (201) (576) Loss per share - Basic 8 (0.04)p (0.57)p (1.44)p All operations are continuing. GABLE HOLDINGS INC.Consolidated Balance SheetAt 30 June 2006 30 June 30 June 31 December 2006 2005 2005 Notes £000s £000s £000s unaudited unaudited auditedAssetsIntangible assets 4,250 - 4,250Tangible fixed assets 338 75 75Reinsurers' share of technical provisions 373 - -Deferred acquisition costs 803 - -Prepayments and accrued income 939 - -Trade and other receivables 2,920 64 24Financial assets 3,930 - -Cash and cash equivalents 106 743 4,858 Total assets 13,659 882 9,207 EquityShare capital 279 106 279Share premium account 5,308 803 5,308Share based premium reserve 20 20 20Other reserves 3,875 - 3,875Retained earnings (622) (201) (576) Total equity attributable to equity holders andtotal equity 9 8,860 728 8,906 LiabilitiesTechnical provisions 3,328 - -Accruals and deferred income 190 - -Trade and other payables 1,281 154 301 Total liabilities 4,799 154 301 Total liabilities and shareholders' funds 13,659 882 9,207 Net asset value per ordinary share 8 7.95p 3.31p 7.99p GABLE HOLDINGS INC.Consolidated Cash Flow StatementFor the six months ended 30 June 2006 Thirteen Six months Seven months months ended ended ended 30 June 30 June 31 December 2006 2005 2005 Notes £000s £000s £000s unaudited unaudited audited Cash flows from operating activitiesCash generated from operations 10 (569) (123) (323)Interest received 47 12 24 Net cash flows from operating activities (522) (111) (299) Cash flows from investing activitiesPurchases of financial assets (3,930) - -Purchase of tangible fixed assets (300) (75) (75) Net cash flows from investing activities (4,230) (75) (75) Acquisitions and disposalsAcquisition of subsidiary - - (312)Net cash acquired with subsidiary - - 15 Net cash flows from acquisitions and disposals - - (297) Cash flows from financing activitiesShares issued - 1,075 5,805Share issue costs - (146) (276) Net cash flows from financing activities - 929 5,529 Net (decrease)/increase in cash and cashequivalents 11 (4,752) 743 4,858 Cash and cash equivalents at period beginning 4,858 - - Cash and cash equivalents at period end 106 743 4,858 GABLE HOLDINGS INC. Notes to the Interim Consolidated Financial StatementsFor the six months ended 30 June 2006 1. Basis of preparation The Company was incorporated as a Corporation in the Cayman Islands which doesnot prescribe the adoption of any particular accounting framework. The Board hadpreviously resolved that the Group would follow UK Accounting Standards andapply the Companies Act 1985 when preparing its annual financial statements. The Board have now resolved that Gable Holdings Inc. will adopt InternationalFinancial Reporting Standards ("IFRS") for the first time in its Group financialstatements for the year ending 31 December 2006. This interim financial reporthas therefore been prepared under the historical cost convention and inaccordance with International Accounting Standard 34 "Interim FinancialReporting" and the requirements of International Financial Reporting Standard 1"First Time Adoption of International Reporting Standards" relevant to interimreports. The transition to IFRS reporting has resulted in a number of changes in thereported financial statements, notes thereto and accounting principals comparedto the previous annual report. Note 3 provides further details on thetransition from UK GAAP to IFRS. 2. Principal accounting policies BUSINESS COMBINATIONS Acquisitions of businesses are accounted for using the purchase method ofaccounting. The cost of an acquisition is measured as the fair value of theassets given, equity instruments issued and liabilities incurred at the date ofexchange plus costs directly attributable to the acquisition. Identifiableassets acquired and liabilities and contingent liabilities assumed in a businesscombination are measured initially at their fair value at the acquisition date.The excess of the cost of acquisition over the fair value of the net assetsacquired is recorded as goodwill. GOODWILL Goodwill is the excess of the cost of acquired businesses over the fair value ofthe net assets acquired, and is deemed to have an infinite useful life, since,in the current business strategy, the Group will benefit from the activities ofGable Insurance for as long as it carries on business. Goodwill is recognised on the balance sheet at cost less any impairment. Goodwill is tested annually for impairment. Where there is any reduction in thecarrying amount, this would be recognised in the income statement for the periodin which the reduction is determined. FOREIGN CURRENCY TRANSLATION The functional currency used in the financial statements is sterling, being thecurrency of the primary economic environment in which Gable Insurance operates.The consolidated financial statements are presented in sterling being thepresentation currency for the Group. Monetary items are translated at period end rates, any exchange differencesarising from the change in rates of exchange are recognised in the incomestatement. Translation differences arising on non-monetary investments held at fair valuethrough profit and loss are reported as part of the fair value gain or loss onthose investments. Transactions and non-monetary assets and liabilities in foreign currencies,including deferred acquisition costs and unearned premiums, are recorded insterling at monthly average rates prevailing at the time of the transaction. UNDERWRITING TRANSACTIONS The results for all classes of insurance business are determined on an annualbasis whereby the incurred cost of claims, commission and related expenses arecharged against the earned proportion of insurance, net of reinsurance asfollows: i. Premiums written comprise the premiums on contracts incepting in the financial year, together with any differences in premiums between booked premiums for prior years and those previously accrued, and include estimates of premiums due but not yet receivable or notified, less allowance for cancellations; ii. Unearned premiums represent the proportion of the premiums written in that year that relate to unexpired terms of policies in force at the balance sheet date; iii. Reinsurance premiums and any related reinsurance recoveries are accounted for in the same accounting period as premiums and claims incurred. Reinsurance premiums are deferred over the period in which the related policies are earned; iv. Acquisition costs, which represent commission and other related expenses, are deferred over the period in which the related policies are earned; v. Claims incurred represent claims and related expenses paid in the year and changes in the provisions for outstanding claims, including provisions for claims incurred but not reported and related expenses, together with any adjustments to claims from prior years. Where applicable, deductions are made for recoveries. vi. Claims outstanding represent the estimated ultimate cost of settling all claims (including direct and indirect claims settlement costs) arising from events that have occurred up to the balance sheet date, including provisions for claims incurred but not reported, less any amounts paid in respect of those claims. Claims outstanding are reduced by anticipated recoveries. The ultimate cost of outstanding claims is estimated based on experience and current business conditions. Significant delays can be experienced in the notification and settlement of claims. Certain claims, and accordingly the ultimate cost of such claims, cannot be known with certainty at the balance sheet date. In particular, estimates of technical provisions inevitably contain inherent uncertainties because significant periods of time may elapse between the occurrence of an insured loss, the reporting of that claim, payment of the claim and the receipt of reinsurance recoveries. While the directors consider that the estimate of claims is fairly calculated, on the basis of the information currently available to them, the ultimate liability remains inherently uncertain and may change as a result of subsequent information and events which may result in the eventual cost of settling these liabilities being higher or lower than the amount calculated; and vii. Reserves are set based upon an expectation that there will not be a subsequent release or deficit. In arriving at this estimate allowance is made for the inherent uncertainty involved in setting of reserves. EXPENSES INCURRED IN INSURANCE ACTIVITIES AND OTHER OPERATING EXPENSES Expenses incurred in insurance activities and other operating expenses arerecognised on an accruals basis. TAXATION The tax expense represents the sum of the tax currently payable and any deferredtax provided. The tax payable is based on the taxable income for the year. Taxable profitdiffers from net profit as reported in the income statement because it excludesitems of income and expense that are taxable or deductible in other years and itfurther excludes items that are never taxable or deductible. The Group'sliability for current tax is calculated using tax rates applicable at thebalance sheet date. Deferred income tax is generally provided on temporary differences arising thetax bases of assets and liabilities and the carrying value in the consolidatedfinancial statements. However, if the deferred income tax arises from theinitial recognition of goodwill, goodwill for which amortisation is notdeductible for tax purposes, or the initial recognition of an asset andliability in a transaction other than a business combination that at the time ofthe transaction affects neither accounting or taxable profit or loss, it is notaccounted for. Deferred income tax is determined using tax rates enacted or substantivelyenacted at the balance sheet date and expected to apply when the related tax isaffected. Deferred income tax assets are recognised to the extent that future taxableprofit will be available against which the temporary differences can be used. Deferred income tax is provided on the temporary differences arising on theinvestments in subsidiaries, except where the Group controls the timing of thereversal of the temporary difference and it is probable that the temporarydifference will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset only where there is a legal rightof offset and the deferred taxes relate to the same fiscal authority. CASH AND CASH EQUIVALENTS Cash and cash equivalents on the balance sheet represent cash balances and moneymarket deposits lodged with banks and short term, highly liquid investments thatare readily convertible to known amounts of cash and which are subject toinsignificant risk of changes in value. Investments with an original maturitydate of less than three months are treated as cash equivalents. FINANCIAL ASSETS The Group's financial assets represent financial investment assets to be held tomaturity. All financial assets are recognised on their settlement date and areinitially recognised at fair value, plus transaction costs. Interest and othercash flows resulting from holding financial assets are accrued over the life ofthe asset. TANGIBLE FIXED ASSETS Tangible fixed assets are stated at cost less accumulated depreciation and anyimpairment. Depreciation is calculated to write off the cost of tangible fixedassets over the estimated useful lives as follows: IT systems and software: 20% per annum IMPAIRMENT OF ASSETS At each balance sheet date, the Group reviews the carrying amounts of itstangible and intangible assets to determine whether there is any indication thatthose assets have suffered an impairment loss. If any such indication exists,the recoverable amount of the assets is estimated in order to determine theextent of the impairment loss (if any). Where the asset does not generate cashflows that are independent from other assets, the Group estimates therecoverable amount of the cash-generating unit to which the asset belongs. Anintangible asset with an indefinite life is tested for impairment annually andwhenever there is an indication that the asset may have been impaired. The recoverable amount is the higher of fair value less cost to sell and valuein use. In assessing value in use, the current estimated future cash flows arediscounted to their present value using a pre-tax discount rate that reflectscurrent market assessments of the time value of money and the risks specific tothe asset for which the estimates to future cash flows have not been adjusted. If the recoverable amount for an asset (or cash generating unit) is estimated tobe less than its carrying amount, the carrying amount of the asset (or cashgenerating unit) is reduced to its recoverable amount. An impairment loss isrecognised in the income statement immediately. Except for goodwill where impairment losses cannot be reversed, where animpairment loss subsequently reverses, the carrying amount of the asset (or cashgenerating unit) is increased to the revised estimate of its recoverable amount,but so that the increased carrying amount does not exceed the carrying amountthat would have been determined had no impairment loss been recognised for theasset (or cash generating unit) in prior years. A reversal of the impairmentloss is recognised immediately. Long term assets and liabilities Where assets and liabilities are payable or recoverable in more than one year,they are initially recognised at their fair value which is the discountednominal value of the asset or liability. The unwinding of the related discountis subsequently recognised in the income statement. PROVISIONS AND CONTINGENCIES Provisions are recognised when the Group has a present legal or constructiveobligation as a result of past events and it is probable that an outflow ofresources will be required to settle the obligation and a reliable estimate ofthe amount can be made. Where a reimbursement is expected, this is recognisedonly when it is virtually certain that the reimbursement will take place and ofthe amount to be reimbursed. Contingent liabilities are liabilities that represent a possible obligationarising from a past event whose existence is dependent on one or more uncertainfuture events not within the control of the Group or a present obligation whereit is not probable that an outflow will be required for settlement of theobligation. Contingent liabilities are not disclosed where the likelihood of the uncertainfuture event is remote, unless the disclosure of the contingent liability addsclarity to the financial statements. Contingent assets, which relate to possible assets and depend on the outcome ofuncertain future events, are not recognised. Such an asset is disclosed onlywhere the inflow of economic benefit is probable. Share based payments All share-based payment arrangements are recognised in the financial statements.The Group does not currently operate equity-settled share-based remunerationplans for remuneration of its employees. However, the first quarter bonus paidto the Chief Executive was settled by the issue of new ordinary shares (after 30June 2006) and the Company has issued a share warrant. All services received in exchange for the grant of any share-based remunerationare measured at their fair values. These are indirectly determined by referenceto the fair value of the share options/warrants awarded. Their value isappraised at the grant date and excludes the impact of any non-market vestingconditions (for example, profitability and sales growth targets). Share-based payments are ultimately recognised as an expense in profit or lossor included as part of the cost of share issues with a corresponding credit tothe share based payment reserve, net of deferred tax where applicable. Ifvesting periods or other vesting conditions apply, the expense is allocated overthe vesting period, based on the best available estimate of the number of shareoptions/warrants expected to vest. Non-market vesting conditions are included inassumptions about the number of options that are expected to become exercisable.Estimates are subsequently revised, if there is any indication that the numberof share options/warrants expected to vest differs from previous estimates. Noadjustment is made to the expense or share issue cost recognised in priorperiods if fewer share options/warrants ultimately are exercised than originallyestimated. Upon exercise of share options/warrants, the proceeds received net of anydirectly attributable transaction costs up to the nominal value of the sharesissued are allocated to share capital with any excess being recorded as sharepremium. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES The preparation of financial information requires the use of estimates andassumptions that affect the reported amounts of assets and liabilities.Estimates and judgements are continually evaluated and based on historicalexperience and other factors including expectations of future events that arebelieved to be reasonable under the circumstances. The most critical accounting estimate made by the Group is the estimate of theultimate claims liability under insurance contracts underwritten. Theestimation of the liability considers historical data, with most relevance givento recent data, of claims experience. Any subsequent inadequacies or surpluses are adjusted and recognised in theincome statement. 3. Transition to international financial reporting standards The transition from previous UK GAAP to IFRS has been made in accordance withIFRS 1, "First-time Adoption of International Financial Reporting Standards".The Group's financial statements for the six months ended 30 June 2006 and thecomparatives presented for the periods ended 30 June 2005 and 31 December 2005comply with all presentation recognition and measurement requirements of IFRSapplicable for accounting periods commencing on or after 1 January 2005. The following reconciliations and explanatory notes thereto describe the effectsof the transition for the financial period 2005. All explanations should be readin conjunction with the IFRS accounting policies of the Group. Since Gable Holdings Inc. was incorporated on 30 November 2004 that is thetransition date to IFRS. As that was the date of incorporation of the Company noreconciliation of equity is required at that date. The re-measurement of balance sheet items as at 30 June 2005 and 31 December2005 may be summarised as follows: UK GAAP Effect of Transition IFRS £000s £000s £000sReconciliation as at 30 June 2005Share premium 823 (20) 803Share based payment reserve - 20 20Total adjustment to assets and equity 823 - 823 Reconciliation as at 31 December 2005Share premium 5,328 (20) 5,308Share based payment reserve - 20 20Total adjustment to assets and equity 5,328 - 5,328 There is no difference between the profit and loss reported under UK GAAP forthe periods ended 30 June 2005 and 31 December 2005 and the profit and loss asreported under IFRS. The Group has modified its former balance sheet and income statement structureon transition to IFRS. The only change is to recognise the share based paymentin connection with the warrants issued to the Group's Nominated Advisor as partof their fee for services provided in connection with the Admission of theCompany to the AIM market in January 2005. 4. Segmental information The Group's business is the provision of construction insurance products and ithas, in the six months to 30 June 2006, derived its business from Great Britainand Ireland. 5. Net Investment return Thirteen Six months Seven months months ended ended ended 30 June 30 June 31 December 2006 2005 2005 £000s £000s £000s unaudited unaudited audited Interest income 47 12 24Realised and unrealised gains and losses (3) - - Net Investment return 44 12 24 The issue of shares by the Company in December 2005 was used to subscribe forshares in its wholly-owned insurance subsidiary, incorporated in Liechtenstein,Gable Insurance AG and to provide it with sufficient regulatory and solvencycapital to commence trading as an insurance company. On the basis that GableInsurance AG is regulated in Liechtenstein and reports its regulatory capitalposition in Swiss Francs, the capital of Gable Insurance AG has been invested ina Swiss Franc denominated bond portfolio. The portfolio will, on a hold tomaturity basis, yield a total return of approximately 2% per annum. 6. Expenses incurred in insurance activities Thirteen Six months Seven months months ended ended ended 30 June 30 June 31 December 2006 2005 2005 £000s £000s £000s unaudited unaudited audited Gross acquisition costs 1,033 - -Change in gross deferred acquisition costs (803) - - 230 - -Other expenses 100 - - 330 - - 7. Tax Companies within the Group pay tax in the jurisdiction in which they operate.The relationship between the expected tax income at 30% and the tax incomeactually recognised in the income statement can be reconciled as follows: Thirteen Six months Seven months months ended ended ended 30 June 30 June 31 December 2006 2005 2005 £000s £000s £000s unaudited unaudited audited Loss for the period (43) (201) (576)Tax rate 30% 30% 30% Expected tax income 13 60 173Losses not recognised as deferred tax asset (16) (60) (173) Actual tax expense (3) - - 8. Loss and net asset value per share The calculation of the basic loss per share is based on the net loss of £46,000(period ended 30 June 2005: loss £201,000, period ended 31 December 2005 : loss£576,000) divided by the weighted average number of shares in issue during theperiod of 111,400,000 (period ended 30 June 2005: 35,113,208, period ended 31December 2005 : 39,892,929). The net asset value per share is calculated by dividing the shareholders' fundsof £8,860,000 (30 June 2005: £728,000, 31 December 2005: £8,906,000) by thenumber of shares in issue at the end of the period - 111,400,000 (30 June 2005:22,000,220, 31 December 2005: 111,400,000). 9. Reconciliation of movements in shareholders' funds Thirteen Six months Seven months months ended ended ended 30 June 30 June 31 December 2006 2005 2005 £000s £000s £000s unaudited unaudited audited Loss for the period (46) (201) (576)Issue of ordinary share capital (net of issue costs) - 929 9,482Net (decrease)/increase in shareholders' funds (46) 728 8,906Equity shareholders' funds brought forward 8,906 - -Equity shareholders' funds carried forward 8,860 728 8,906 10. Reconciliation of loss for the period before taxation to net cash flows fromoperating activities Thirteen Six months Seven months months ended ended ended 30 June 30 June 31 December 2006 2005 2005 £000s £000s £000s unaudited unaudited audited Loss for the period before taxation (43) (201) (576)Interest received (47) (12) (24)Depreciation of tangible fixed assets 37 - -Increase of technical provisions 3,328 - -Increase of reinsurers' share of technical provisions (373) - -Increase in deferred acquisition costs (803) - -Increase in debtors (3,835) (64) (24)Increase in creditors 1,167 154 301 Net cash flows from operating activities (569) (123) (323) 11. Reconciliation of net cash flows to movement in net funds Thirteen Six months Seven months months ended ended ended 30 June 30 June 31 December 2006 2005 2005 £000s £000s £000s unaudited unaudited audited Change in cash for the period (4,752) 743 4,858 Change in net funds resulting from cash flows (4,752) 743 4,858Net funds brought forward 4,858 - - Net funds carried forward 106 743 4,858 12. General information The information for the period ended 30 June 2006 does not constitute statutoryaccounts as defined in Section 240 of the Companies Act 1985. The figures forthe period ended 31 December 2005 have been extracted from the 2005 statutoryfinancial statements prepared under UK GAAP and adjusted where necessary inorder to comply with IFRS as shown in note 3. The auditors' report on thoseaccounts was unqualified and did not contain a statement under section 237(2) ofthe Companies Act 1985. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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