Half-year Report

RNS Number : 3816W
FBD Holdings PLC
01 August 2018
 

FBD HOLDINGS PLC

1 August 2018         

 

FBD HOLDINGS PLC

Half yearly Report

For the Six Months ended 30 June 2018

 

KEY HIGHLIGHTS

·     Profit before tax of €18m

·     Combined Operating Ratio ("COR") of 88.6% includes net of reinsurance Storm Emma costs of €6.6m and positive prior year reserve development of €6.0m.  

·     Gross Written Premium up 1% to €192m  

·     Half Year annualised Return On Equity (ROE) of 12%

·     Careful growth and disciplined underwriting delivers excellent underwriting profits

Premium and new business policy count growth

Reinsurance program has protected from significant adverse weather

Digital enhancements to FBD.ie improving customer experience

New Dublin office on Baggot Street and ongoing investment in nationwide branch network

 

FINANCIAL SUMMARY


2018

€000s


2017

€000s

 

 

 

Gross written premium

191,985

189,650

Underwriting profit

18,934

11,072

Profit before taxation

18,423

11,919

 

 

 

Loss ratio

63.3%

70.5%

Expense ratio

25.3%

22.6%

Combined operating ratio

88.6%

93.1%

 

 

 

 

Cent

Cent

Basic earnings per share

46

30

Net asset value per share

800

688

 

·     Gross Written Premium of €192m, €2m higher than 2017 (€190m). Strong customer retention combined with increased new business in Consumer, Commercial and Farm.

·     Net profit before tax of €18.4m, compared to €11.9m in 2017.

·     COR of 88.6% compared to 93.1% in 2017. Includes positive prior year development of €6.0m and net Storm Emma costs of €6.6m.

·     Annualised total investment return of -0.4% (2017: 0.7%)

·     Expense ratio of 25.3%, 2.7% higher than last year primarily as a result of the once-off impact in 2017 of the closure of the property reinsurance surplus treaty.

·     Investment returns continue to be poor in a volatile environment emphasising the need for continued underwriting discipline.

 

Commenting on these results Fiona Muldoon, Group Chief Executive, said:

 

"This is a very strong set of results for the first half of 2018 particularly in the context of a major snow storm in March.  Despite adverse weather, challenging investment returns and a competitive market, the team has delivered a healthy profit of €18m for the first half of the year.  We are pleased with our new business levels and we continue to build our business in Farm, Commercial and Consumer through our quality products and our direct relationships with our customers.

 

The cost of injury claims remains a challenge for Irish customers. We look forward to the Personal Injuries Commission report and we urge the Government to follow up in order to provide a lower cost, sustainable claims environment for the benefit of all insurance customers particularly Irish businesses.  We continue to work hard to ensure that all new proposals will deliver for Irish farmers, businesses and consumers, who continue to bear the cost of significantly higher premiums than those seen in other countries.

 

We were delighted to open our Baggot Street Branch last week and we will use this office as a base to offer commercial insurance to many Dublin based businesses.  We are also looking forward to the launch of our motor insurance partnership with Post Insurance in the coming months. " 

 

The Group made an announcement on 29 June 2018 in respect of certain matters concerning the Chief Executive.  The process is currently on-going.  We are working to bring it to a conclusion and at this time we have no further update. 

 

A presentation will be made to analysts at 9.00am today, a copy of which will be available on our Group website www.fbdgroup.com.

 

 Enquiries

Telephone

 FBD

 

 Michael Sharpe, Investor Relations

+353 1 409 3962

 

 

 Powerscourt

 

 Jack Hickey

+353 83 448 8339

 

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 34 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 ID

FBH LN

 

 

OVERVIEW

The results for the first half of 2018 show good new business growth and high retention levels with a continued focus on underwriting discipline. As we celebrate our 50th year in business FBD continues to deliver sustainable shareholder returns through growth in book value and strong underwriting discipline. The Group reported a gross written premium increase of 1% to €192.0m (2017: €189.7m), profit before tax of €18.4m (2017: €11.9m) including an underwriting profit of €18.9m (2017: €11.1m). The underwriting profit includes net costs for Storm Emma of €6.6m after reinsurance recoveries and reinsurance reinstatement premia.

 

UNDERWRITING

                                          

Premium income

Gross written premium increased by €2.3m to €192.0m (2017: €189.7m). All our main channels reported premium increases as we carefully grow the business with underlying performance remaining stable.

 

New business volumes grew by 21% compared to the second half of 2017 and increased by 16% on the first half of 2017. The main increases are seen in personal lines, small business and farm products. Retention remains strong as we maintain underwriting discipline while growing in our targeted areas.   

 

Reinsurance

Ireland has suffered two large natural catastrophe events over the 2017/2018 winter that tested our reinsurance program. It responded well, providing effective cover for these events (one in October 2017 and one in March 2018).  Under the 2018 arrangements we believe we have limited further net exposure to additional significant adverse weather events in 2018.

 

Claims

 

Net claims incurred were €104.7m (2017: €112.0m). Positive prior year reserve development of €6.0m compares to €1.9m in 2017. Property notifications increased 23% in the first half of 2018 as a result of weather claims, particularly Storm Emma.

 

The Group MIBI levy incurred was €2.1m (2017: €0.1m). The 2018 MIBI charge includes the release of an accrual of €1.8m for a previously anticipated earlier introduction of the 2% levy for failed insurers for which legislation is still awaited. The 2017 figure includes a MIBI reserve release of €5.6m due to the Supreme Court ruling on the "Setanta" case. The MIBI levy is calculated based on the Group's expected share of the motor market for 2018 and the estimated levy call which will be made by MIBI.

 

Claims Environment

The claims environment has moderated though inflationary pressure is still evident. The average cost of claims continues to increase with higher levels of inflation observed in lower value injury settlements. Inflationary pressure is evident in property and motor claims as increased construction activity increases labour costs and newer cars cost more to repair.  We note an increase in Employer's Liability claim frequency in the period and we are monitoring this carefully to establish if this is a shift in the underlying trend.

 

The enactment by the Government of the PIAB (Amendment) Bill to tackle the non-co-operation of claimants and their legal representatives with the Injuries Board is still awaited.  This legislation is necessary to reduce the claimant rejection rate and lower the cost of claims.

 

We welcome the amendment to the Civil Liability & Courts Act where a judge can dismiss a claim if a claimant gives false evidence having provided a sworn affidavit. This change may act as a deterrent for dishonest or false claims.

In the latest report published by the Cost of Insurance Working Group one out of four actions was delivered for Q1 2018. Work is continuing on the integrated insurance fraud database and the Garda Automatic Number Plate Recognition (ANPR) system to detect uninsured drivers. In 2019, the National Claims Information Database should provide analysis of annual claims' trends of motor insurance claims.

 

Weather, Claims Frequency and Large Claims

In March a combination of snow and high wind gave rise to blizzard like conditions impacting most parts of the country. FBD received almost 1,200 claims in respect of Storm Emma with an approximate cost of €6.6m net of all reinsurance recoveries and reinstatement premia.


There is a stabilisation in motor injury frequency following reductions in 2016 and 2017.  This is in line with the stabilisation of our policy count generally.

 

The gross cost of large claims in the first half of 2018 (greater than €0.5m) is €24m which is marginally higher than the five year average.  In particular there is a large number of tractor claims in 2018.

 

Expenses

The Group's expense ratio was 25.3% (2017: 22.6%). Other underwriting expenses were €41.9m, an increase of €6m. The majority of the increase is driven by a one time reinsurance adjustment of €4.6m in 2017 on the closure of the property surplus treaty. The balance reflects an increase in costs including additional IT spend in respect of the work required for the introduction of the General Data Protection Regulation (GDPR).

 

General

FBD's Combined Operating Ratio ("COR") was 88.6% (2017: €93.1%) generating an underwriting profit of €18.9m (2017: €11.1m).

 

Investment Return

FBD's total annualised investment return for the first six months of 2018 was -0.41% (2017: 0.68%), with 0.25% (2017: 0.77%) recognised in the Consolidated Income Statement and -0.66% (2017: -0.09%) recognised in the Consolidated Statement of Other Comprehensive Income (OCI). The returns are a reflection of the challenges experienced in investment markets during H1 2018.  The negative returns in OCI are driven by credit spreads widening more generally on the corporate bond portfolio and spread widening on sovereign bonds following the political turmoil in Italy and in a generally uncertain investment environment. 

 

FINANCIAL SERVICES

 

The Group's financial services operations delivered a profit before tax of €1.4m for the period (2017: €1.8m) and continue to deliver good results in a competitive environment. The Group's financial services operations include premium instalment services and life, pension and investment broking (FBD Financial Solutions) net of certain holding company costs.

 

Profit per share

The diluted profit per share was 44 cent per ordinary share, compared to 30 cent per ordinary share in 2017. 

 

Dividend

The shareholders approved the final dividend proposed by the Board for 2017 at the Annual General Meeting on 4 May 2018 and the dividend was paid on 11 May 2018.

 

 

 

 

STATEMENT OF FINANCIAL POSITION

 

Capital position

Ordinary shareholders' funds at 30 June 2018 amounted to €277.5m (December 2017: €271.6m). The increase in shareholders' funds is mainly attributable to the following:

·     Profit after tax for the half year of €16.1m

·     Offset by €8.6m dividend payments

·     Mark to market losses on Available for Sale investments of €3.0m after tax recognised in the statement of other comprehensive income

·     Share based payments of €0.5m

·     A decrease in the defined benefit pension scheme obligation of €0.9m after tax following a 5bps decrease in the assumed inflation rate to 1.70%

Net assets per ordinary share are 800 cent, compared to 784 cent per share at 31 December 2017.

 

Investment Allocation

The Group adopts a conservative investment policy where it ensures that its technical reserves are well matched by cash and fixed interest securities of similar nature and duration. FBD has increased its allocation to Risk Assets by €36m to approximately €100m.  This is in line with the company's current Strategic Asset Allocation framework. 

 

The allocation of the Group's investment assets is as follows:

 

 

30  June 2018

31 December 2017

 

€m

%

€m

%

Corporate bonds

500

47%

499

47%

Government bonds

244

23%

259

25%

Deposits and cash

213

20%

230

22%

Equities

27

3%

22

2%

Investment property

18

2%

18

2%

Other risk assets

55

5%

24

2%

 

1,057

100%

1,052

100%

 

Solvency

The audited Solvency Capital Ratio (SCR) of 164% at 31 December 2017 was previously reported in the Solvency and Financial Condition Report in May.  The Group is committed to maintaining a strong solvency position.

 

OUTLOOK

 

The results for the first half of 2018 are strong driven by an excellent underwriting profit and modest careful growth in premium income in line with the Group's overall strategy. The Group is in a strong position with a clear strategy to deliver sustainable growth in book value through underwriting discipline and careful risk selection. The combined operating ratio of 88.6% is a direct result of this continued underwriting discipline and improved rate adequacy. 

 

The claims environment continues to evidence some signs of moderation although inflationary pressure is still evident. FBD supports the industry's investment in a new Garda unit to investigate insurance fraud. We are committed to actively tackling fraud and delivering benefits to customers. The Cost of Insurance Working Group must also continue to implement its recommendations in order to deliver for customers.

 

Winter weather had a huge impact on our farming community and our customers continue to see the value of FBD's strong cover and claims paying ability.  FBD paid approximately one quarter of all claims nationally for Storm Emma. In the personal injury area, farm safety remains a key focus and an on-going significant investment for the group. In particular this year we have already seen an unusual number of large tractor claims. FBD continues to work hand in hand with farm safety organisations to educate and change on-farm behaviour in order to help mitigate the personal and financial impact of such tragic accidents on Ireland's farm families.

 

Complex negotiations continue around Brexit and the likely impact is still uncertain for Irish business. We remain confident in the resilience of Irish businesses and Irish farmers to navigate the challenges ahead.

 

The Group's objective is to deliver sustainable long-term shareholder value through careful growth in book value. We target a low double-digit return on equity ("ROE") through the cycle.

 

FBD HOLDINGS PLC

Condensed Consolidated Income Statement

For the half year ended 30 June 2018

 

 

 

 

 

Notes

Half year
ended
30/06/18

(unaudited)

 

Half year

ended

30/06/17

(unaudited)

 

Year ended 31/12/17   (audited)

 

 

€000s

 

€000s

 

€000s

Revenue

3

204,261

 

202,524

 

397,741

Income

 

 

 

 

 

 

Gross premium written

 

191,985

 

189,650

 

372,459

Reinsurance premiums

 

(20,260)

 

(7,446)

 

(27,267)

 

 

 

 

 

 

 

Net premium written

 

171,725

 

182,204

 

345,192

Change in provision for unearned premiums

 

(6,215)

 

(23,273)

 

(19,260)

 

 

 

 

 

 

 

Net premium earned

 

165,510

 

158,931

 

325,932

Net investment return

 

1,297

 

3,898

 

9,361

Financial services income

 

4,548

 

4,391

 

8,733

 

 

 

 

 

 

 

Total income

 

171,355

 

167,220

 

344,026

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

Net claims and benefits

 

(102,596)

 

(111,971)

 

(203,144)

Other underwriting expenses

4

(41,873)

 

(35,862)

 

(75,908)

Movement in MIBI Levy

 

(2,107)

 

(26)

 

(1,945)

Financial services expenses

 

(3,163)

 

(2,633)

 

(4,200)

Restructuring and other costs

 

-

 

(1,717)

 

(1,715)

Finance costs

 

(3,193)

 

(3,092)

 

(6,298)

Revaluation of property, plant and equipment

 

-

 

-

 

(1,080)

 

 

 

 

 

 

 

Result before taxation

 

18,423

 

11,919

 

49,736

Income taxation charge

 

(2,308)

 

(1,608)

 

(7,040)

 

 

 

 

 

 

 

Result for the period

 

16,115

 

10,311

 

42,696

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

Equity holders of the parent

 

16,115

 

10,311

 

42,696

 

 

 

 

 

 

 

 

 

 

FBD HOLDINGS PLC

Condensed Consolidated Income Statement

For the half year ended 30 June 2018

 

 

 

 

 

 

Notes

Half year
ended
30/06/18

(unaudited)

 

Half year

ended 30/06/17

(unaudited)

 

Year ended 31/12/17 (audited)

Earnings/(loss) per share

 

From continuing operations

 

Cent

 

Cent

 

Cent

Basic

7

46

 

30

 

123

Diluted

7

441

 

301

 

1111

 

1 Diluted earnings per share reflects the potential conversion of the convertible debt and share based payments. An adjustment has been made to diluted earnings at 30 June 2017 and 31 December 2017 to take account of the impact of the convertible debt conversion.

 

 

 

 

FBD HOLDINGS PLC

Condensed Consolidated Statement of Comprehensive Income

For the half year ended 30 June 2018

 

 

 

 

Half year

ended 30/06/18

(unaudited)

 

 

 

Half year ended 30/06/17

(unaudited)

 

 

 

Year ended 31/12/17 (audited)

 

€000s

 

€000s

 

€000s

 

 

 

 

 

 

Result for the period

16,115

 

10,311

 

42,696

 

 

 

 

 

 

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

 

 

 

 

 

Net (loss)/gain on available for sale assets

(3,474)

 

(423)

 

2,807

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

 

434

 

 

53

 

 

(351)

 

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

 

 

 

 

 

Actuarial gain on retirement benefit obligations

1,002

 

2,808

 

275

Taxation charge relating to items not to be reclassified in subsequent periods

 

(125)

 

 

(351)

 

 

(34)

 

 

 

 

 

 

Other comprehensive (expense)/income after taxation

(2,163)

 

2,087

 

2,697

 

 

 

 

 

 

Total comprehensive income for the period

13,952

 

12,398

 

          45,393

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

Equity holders of the parent

13,952

 

12,398

 

45,393

 

 

 

 

 

 

 

 

                                                                                                 FBD HOLDINGS PLC

Condensed Consolidated Statement of Financial Position

At 30 June 2018

 

 

 

 

 

 

 

 

 

ASSETS

 

30/06/18

(unaudited)

 

30/06/17

(unaudited)

 

31/12/17

(audited)

 

Notes

€000s

 

€000s

 

€000s

 

 

 

 

 

 

 

Property, plant and equipment

 

66,093

 

70,188

 

68,251

 

 

 

 

 

 

 

Investment property

 

18,000

 

16,400

 

18,000

 

 

 

 

 

 

 

Loans

 

574

 

705

 

681

 

 

 

 

 

 

 

Deferred taxation asset

 

4,167

 

10,485

 

5,467

 

 

 

 

 

 

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale investments

 

744,224

 

736,483

 

758,687

Investments held for trading

 

81,228

 

46,159

 

45,347

Deposits with banks

 

178,286

 

185,781

 

195,985

 

 

 

 

 

 

 

 

 

1,003,738

 

968,423

 

1,000,019

 

 

 

 

 

 

 

Reinsurance assets

 

 

 

 

 

 

Provision for unearned premiums

 

6

 

4

 

4

Claims outstanding

 

93,326

 

70,714

 

90,561

 

 

 

 

 

 

 

 

 

93,332

 

70,718

 

90,565

 

 

 

 

 

 

 

Retirement benefit asset

 

10,900

 

12,500

 

9,774

 

 

 

 

 

 

 

Current taxation asset

 

3,934

 

4,103

 

3,934

 

 

 

 

 

 

 

Deferred acquisition costs

 

31,621

 

30,355

 

31,366

 

 

 

 

 

 

 

Other receivables

 

68,518

 

71,161

 

64,020

 

 

 

 

 

 

 

Cash and cash equivalents

 

35,572

 

31,516

 

27,176

 

 

 

 

 

 

 

Total assets

 

1,336,449

 

1,286,554

 

1,319,253

 

 

 

 

 

 

 

 

 

 

FBD HOLDINGS PLC

Condensed Consolidated Statement of Financial Position (continued)

At 30 June 2018

 

 

 

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

30/06/18

(unaudited)

 

30/06/17

(unaudited)

 

31/12/17 (audited)

 

Notes

€000s

 

€000s

 

€000s

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Ordinary share capital

6

21,409

 

21,409

 

21,409

Capital reserves

 

20,225

 

19,625

 

19,726

Retained earnings

 

217,609

 

179,264

 

212,259

Other reserves

 

18,232

 

18,232

 

18,232

 

 

 

 

 

 

 

Equity attributable to ordinary equity holders of the parent

 

277,475

 

238,530

 

271,626

Preference share capital

 

2,923

 

2,923

 

2,923

 

 

 

 

 

 

 

Total Equity

 

280,398

 

241,453

 

274,549

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Insurance contract liabilities

 

 

 

 

 

 

Provision for unearned premiums

 

192,225

 

190,020

 

186,008

Claims outstanding

 

765,091

 

759,233

 

765,012

 

 

 

 

 

 

 

 

 

957,316

 

949,253

 

951,020

 

 

 

 

 

 

 

Other provisions

 

7,331

 

10,209

 

6,647

 

 

 

 

 

 

 

Convertible debt

 

53,268

 

51,807

 

52,525

 

 

 

 

 

 

 

Deferred taxation liability

 

4,543

 

3,430

 

3,845

 

 

 

 

 

 

 

Payables

 

33,593

 

30,402

 

30,667

 

 

 

 

 

 

 

Total liabilities

 

1,056,051

 

1,045,101

 

1,044,704

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity and liabilities

 

1,336,449

 

1,286,554

 

1,319,253

                                                  

 

 

 

 

 

 

 

 

 

 

 

FBD HOLDINGS PLC

Condensed Consolidated Statement of Cash Flows

For the half year ended 30 June 2018

 

 

 

Half year
ended
30/06/18

(unaudited)

 

 

Half year ended 30/06/17

(unaudited)

 

 

Year

ended 31/12/17 (audited)

 

 

€000s

 

€000s

 

€000s

Cash flows from operating activities

 

 

 

 

 

 

Result before taxation

 

18,423

 

11,919

 

49,736

Adjustments for:

 

 

 

 

 

 

Loss/(profit) on disposal of investments held for trading

 

1,960

 

(1,070)

 

(1,685)

Loss on investments available for sale

 

2,368

 

3,173

 

5,981

Interest and dividend income

 

(3,675)

 

(7,696)

 

(12,735)

Depreciation of property, plant and equipment

 

          6,125

 

6,198

 

11,426

Share-based payment expense

 

             499

 

585

 

685

Revaluation of investment property

 

-

 

-

 

(1,600)

Revaluation of property, plant and equipment

 

-

 

-

 

1,080

Increase in insurance contract liabilities

 

3,529

 

35,567

 

17,486

Increase/(decrease) in other provisions

 

684

 

(1,038)

 

(4,600)

Operating cash flows before movement in working capital

 

29,913

 

47,638

 

65,774

Increase in receivables and deferred acquisition costs

 

(6,927)

 

(12,726)

 

    (8,094)

Increase/(decrease) in payables

 

5,994

 

(16,629)

 

(13,084)

Interest payments on convertible debt

 

(2,450)

 

(2,450)

 

(4,900)

Purchase of investments held for trading

 

(82,916)

 

(282)

 

(958)

Sale of investments held for trading

 

45,075

 

45,495

 

47,597

Cash (used in) / generated from operations

 

(11,311)

 

61,046

 

86,335

Interest and dividend income received

 

5,851

 

6,677

 

13,218

Income taxes refunded

 

-

 

59

 

228

 

 

 

 

 

 

 

Net cash (used in) / generated from operating activities

 

(5,460)

 

67,782

 

99,781

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Purchase of available for sale investments

 

(49,075)

 

(164,398)

 

(258,355)

Sale of available for sale investments

 

57,694

 

53,820

 

125,989

Purchase of property, plant and equipment

 

(3,967)

 

(3,427)

 

(7,869)

Sale of property, plant and equipment

 

-

 

35

 

106

Decrease in loans and advances

 

107

 

27

 

51

Decrease in deposits invested with banks

 

17,699

 

51,116

 

40,912

 

 

 

 

 

 

 

Net cash provided by / (used in) investing activities

 

22,458

 

(62,827)

 

(99,166)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Ordinary and preference dividends paid

 

(8,602)

 

-

 

-

Net cash used in financing activities

 

(8,602)

 

-

 

-

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

8,396

 

4,955

 

615

Cash and cash equivalents at the beginning of the period

 

27,176

 

26,561

 

26,561

 

 

 

 

 

 

 

Cash and cash equivalents at the end of the period

 

35,572

 

31,516

 

27,176

 

 

FBD HOLDINGS PLC

Condensed Consolidated Statement of Changes in Equity (UNAUDITED)

For the half year ended 30 June 2018

 

 

Ordinary

Capital

Retained

Other

Attributable to

Preference

Total

 

share capital

reserves

earnings

Reserves

Ordinary shareholders

share capital

equity

 

€000s

€000s

€000s

€000s

€000s

€000s

€000s

 

 

 

 

 

 

 

 

Balance at 1 January 2018

21,409

19,726

           212,259

             18,232

                              271,626

2,923

274,549

 

 

 

 

 

 

 

 

Result after taxation

-

-

              16,115 

-

                                 16,115

-

16,115

 

 

 

 

 

 

 

 

Other comprehensive income

-

-

(2,163)

-

                                   (2,163)

-

(2,163)

 

 

 

 

 

 

 

 

 

21,409

19,726

            226,211

            18,232

                              285,578

2,923

288,501

 

 

 

 

 

 

 

 

Dividends paid and approved on ordinary and

preference shares

-

-

(8,602)

-

(8,602)

-

(8,602)

 

 

 

 

 

 

 

 

Recognition of share based payments

-

499

-

-

                                    499   

-

499

 

 

 

 

 

 

 

 

Balance at 30 June 2018

21,409

20,225

           217,609

           18,232

                               277,475

2,923

280,398

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 January 2017

21,409

19,041

166,866

18,232

225,548

2,923

228,471

 

 

 

 

 

 

 

 

Result after taxation

-

-

10,311

-

10,311

-

10,311

 

 

 

 

 

 

 

 

Other comprehensive income

-

-

2,087

-

2,087

-

2,087

 

 

 

 

 

 

 

 

 

21,409

19,041

179,264

18,232

237,946

2,923

240,869

 

 

 

 

 

 

 

 

Recognition of share based payments

-

584

-

-

584

-

584

 

 

 

 

 

 

 

 

Balance at 30 June 2017

21,409

19,625

179,264

18,232

238,530

2,923

241,453

 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

Note 1 Statutory information

 

The half yearly financial information is considered non-statutory financial statements for the purposes of the Companies Act 2014 and in compliance with section 340(4) of that Act we state that:

 

•     the financial information for the half year to 30 June 2018 does not constitute the statutory financial statements of the company;

•     the statutory financial statements for the financial year ended 31 December 2017 have been annexed to the annual return and delivered to the Registrar;

•     the statutory auditors of the company have made a report under section 391 Companies Act 2014 in respect of the statutory financial statements for year ended 31 December 2017; and

•     the matters referred to in the statutory auditors' report were unqualified, and did not include a reference to any matters to which the statutory auditors drew attention by way of  emphasis without qualifying the report.

This half yearly financial report has not been audited but has been reviewed by the auditors of the Company.

 

Note 2 - Accounting policies

 

Basis of preparation

The annual financial statements of FBD Holdings plc are prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union.  The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 'Interim Financial Reporting', as adopted by the European Union.

 

Going concern

The Directors are satisfied that the Group has sufficient resources to continue in operation for a period of not less than twelve months from the date of this report.  Accordingly, they continue to adopt the going concern basis of accounting in preparing the condensed financial statements.

 

Consistency of accounting policy

The accounting policies and methods of computation used by the Group to prepare the interim financial statements for the six month period ended 30 June 2018 are the same as those used to prepare the Group Annual Report for the year ended 31 December 2017 except as described below. 

 

Standards adopted in the period

 

The Group has adopted IFRS 15 Revenue from Contracts with Customers during the six months ended 30 June 2018. The adoption of this standard has not had a material impact on the Group as the revenue from contracts with customers other than insurance contracts is 1% of total Revenue for the first six months of 2018.

 

There have been no other new standards or amendments to standards adopted by the Group during the six months ended 30 June 2018 which had a material impact on the Group.

 

 

 

 

 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

Standards and interpretations not yet effective

 

IFRS 16            Leases1

IFRS 17            Insurance Contracts2

1 Effective for annual periods on or after 1 January 2019, with earlier application permitted.

2 Effective for annual periods on or after 1 January 2021, with earlier application permitted.

 

IFRS 16 Leases

IFRS 16 is effective for annual periods beginning on or after 1 January 2019, with earlier application permitted.

IFRS 16 will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability (to pay rentals) are recognised. The standard will affect primarily the accounting for the group's operating leases. As at 31 December, the group has non-cancellable operating lease commitments of €11,787,000, see note 11 of the 2017 Annual Report. The Directors are currently assessing the impact of the adoption of the standard.

 

At this stage, the Directors do not intend to adopt the standard before its effective date. The Directors intend to apply the simplified transition approach and will not restate comparative amounts for the year prior to first adoption.

 

IFRS 9 Financial Instruments and IFRS 17 Insurance Contracts

IFRS 9 Financial Instruments is effective from 1 January 2018. The standard sets out the requirements for classification and measurement, impairment and general hedge accounting. 

 

The IASB published IFRS 17 Insurance Contracts on 18 May 2017 which supersedes IFRS 4 Insurance Contracts. This standard is effective from 1 January 2021. The Directors are currently assessing the implications of the adoption of IFRS 17 Insurance Contracts. The standard is expected to have a considerable impact on the Financial Statements of the Group.

 

The IASB amended IFRS 4 Insurance Contracts in September 2016 by issuing "Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4)" which provides the option to apply a temporary exemption from the adoption of IFRS 9 Financial Instruments for periods beginning before 1 January  2021 should the insurer meet defined eligibility criteria. The Group is eligible and has applied the temporary exemption from 1 January 2018 per the amended IFRS 4 Insurance Contracts standard. Reassessment of qualification for the application of the temporary exemption will be carried out on an annual basis during the temporary exemption period.

 

In line with amended IFRS 4 Insurance Contracts, additional disclosures will be included in the Financial Statements of the Group during the temporary exemption period. These disclosures include:

(a)   How the Group qualifies for the temporary exemption;

(b)   The fair value of financial assets at the end of the reporting period and the amount of change in the fair value of financial assets during that period; and 

(c)   Information about the credit risk exposure of financial assets.

 

The adoption of IFRS 9 Financial Instruments is not expected to have a material impact on the Financial Statements of the Group.

 

 

 

 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

Critical accounting estimates and judgements in applying accounting policies

The critical accounting estimates and judgements used by the Group in applying accounting policies are the same as those used to prepare the Group Annual Financial Statements for the year ended 31 December 2017.  While there have been some changes in estimates of amounts in the current financial period these changes do not have a significant impact on the results for the period.

 

Risks and uncertainties

The principal risks and uncertainties faced by the Group are outlined on pages 15-18 of the Group's Annual Financial Statements for the year ended 31 December 2017 and remain unchanged.

 

Note 3 - Segmental information

 

(a)        Operating segments

 

The principal activities of the Group are underwriting of general insurance business and financial services. For management purposes, the Group is organised in two operating segments - underwriting and financial services.  The profit earned by each segment is reported to the chief operating decision maker, the Group Chief Executive, for the purpose of resource allocation and assessment of segmental performance.  Central administration costs and Directors' salaries are allocated based on actual activity. Restructuring costs and income taxation are direct costs of each segment. Discrete financial information is prepared and reviewed on a regular basis for these two segments. The accounting policies of the reportable segments are the same as the Group accounting policies. There has been no material change to the assets by reportable segment from the disclosure in the 2017 Annual Report.

 

 

 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

 

The following is an analysis of the Group's revenue and results from continuing operations by reportable segments:

 

 

Half year ended 30/06/2018

 

Underwriting

Financial
Services

 

Total

 

€000s

€000s

€000s

 

 

 

 

Revenue 

199,713

4,548

204,261

 

 

 

 

Result before taxation

17,037

1,386

18,423

Income taxation charge

(2,130)

(178)

(2,308)

 

 

 

 

Result after taxation

14,907

1,208

16,115

 

 

Half year ended 30/06/2017


 

Underwriting

 

Financial
Services

 

 

Total

 

€000s

€000s

€000s

 

 

 

 

Revenue

198,133

4,391

202,524

 

 

 

 

Profit before taxation

10,154

1,765

11,919

Income taxation charge

(1,269)

(339)

(1,608)

 

 

 

 

Result after taxation

8,885

1,426

10,311

 

 

 

 

 

Year ended 31/12/2017


 

Underwriting

 

Financial
Services


 

Total

 

€000s

€000s

€000s

 

 

 

 

Revenue 

389,008

8,733

397,741

 

 

 

 

Profit before taxation

45,206

4,530

49,736

Income taxation charge

(6,379)

(661)

(7,040)

 

 

 

 

Result after taxation

38,827

3,869

42,696

 

 

(b)        Geographical segments

 

The Group's operations are located in Ireland.

 

 

 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

Note 4 - Underwriting result

 

 

Half year ended 30/06/18 (unaudited)

 

 

Half year

ended 30/06/17

(unaudited)

 

 

Year

ended 31/12/17

(audited)

 

€000s

 

€000s

 

€000s

 

 

 

 

 

 

 

 

Gross premium written

191,985

 

189,650

 

372,459

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premium earned

165,510

 

158,931

 

325,932

 

Net claims incurred

(102,596)

 

(111,971)

 

(203,144)

 

Motor Insurers Bureau of Ireland Levy

(2,107)

 

(26)

 

(1,945)

 

 

 

 

 

 

 

 

 

60,807

 

46,934

 

120,843

 

 

 

 

 

 

 

 

Gross management expenses

(41,867)

 

(40,969)

 

(81,751)

 

Deferred acquisition costs

254

 

5,352

 

6,363

 

Reinsurers' share of expenses

1,492

 

1,491

 

2,528

 

Broker commissions payable

(1,752)

 

(1,736)

 

(3,048)

 

 

 

 

 

 

 

 

Other Underwriting expenses

(41,873)

 

(35,862)

 

(75,908)

 

 

 

 

 

 

 

 

Underwriting result

18,934

 

11,072

 

44,935

 

 

The Group's half yearly results are not subject to any significant impact arising from the seasonality of operations.

 

 

Note 5 - Dividends

 

 

 

Half Year ended 30/06/18

 

Half Year ended 30/06/17

 

Year

ended 31/12/17

(audited)

Paid:

€000s

 

€000s

 

€000s

 

 

 

 

 

 

Dividend of 8.4 cent (2016: nil cent) per share on 14% non-cumulative preference shares of €0.60 each

 

113

 

 

-

 

 

-

Dividend of 4.8 cent (2016: nil cent) per share on 8% non-cumulative preference shares of €0.60 each

 

169

 

 

-

 

 

-

Final dividend of 24.0 cent (2016: nil cent) per share on ordinary shares of €0.60 each

 

8,320

 

 

-

 

 

-

 

 

 

 

 

 

Total dividends paid

8,602

 

-

 

-

 

Dividend payments were approved by the shareholders at the Annual General Meeting on 4 May 2018 and paid on 11 May 2018.
 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

Note 6 - Ordinary share capital

 

Half year ended 30/06/18 (unaudited)

 

Half year

ended 30/06/17 (unaudited)

 

Year

 ended 31/12/17

(audited)

 

Number

 

€000s

 

€000s

 

€000s

(i)  Ordinary shares of €0.60 each

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Authorised:

 

 

 

 

 

 

 

At beginning and end of period

51,326,000

 

30,796

 

30,796

 

30,796

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued and fully paid:

 

 

 

 

 

 

 

At beginning and end of period

35,461,206

 

21,277

 

21,277

 

21,277

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Authorised:

 

 

 

 

 

 

 

At beginning and end of period

120,000,000

 

1,200

 

1,200

 

1,200

 

 

 

 

 

 

 

 

Issued and fully paid:

 

 

 

 

 

 

 

At beginning and end of period

13,169,428

 

132

 

132

 

132

 

 

 

 

 

 

 

 

Total Ordinary Share Capital

 

 

21,409

 

21,409

 

21,409

 

The number of ordinary shares of €0.60 each held as treasury shares at 30 June 2018 was 795,005. At 31 December 2017 the number held was 795,005.

 

 

 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

Note 7 - Earnings 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:

 

Half year

 ended
30/06/18 (unaudited)

 

Half year

 ended 30/06/17

(unaudited)

 

Year

ended 31/12/17 (audited)

 

€000s

 

€000s

 

€000s

Earnings

 

 

 

 

 

Profit for the period for the purpose of basic earnings

 

 

 

 

 

per share

16,115

 

10,311

 

42,696

 

 

 

 

 

 

Profit for the period for the purpose of diluted earnings

 

 

 

 

 

per share

18,909

 

13,017

 

48,207

 

 

 

 

 

 

Number of shares

 

 

 

 

 

Weighted average number of ordinary shares for

 

 

 

 

 

the purpose of basic earnings per share

34,666,201

 

34,666,201

 

34,666,201

 

 

 

 

 

 

Weighted average number of ordinary shares for

 

 

 

 

 

the purpose of diluted earnings per share

43,329,630

 

43,029,131

 

43,329,630

 

 

 

 

 

 

 

 

 

 

 

 

From continuing operations

Cent

 

Cent

 

Cent

Basic earnings per share

46

 

30

 

123

Diluted earnings per share

441

 

301

 

1111

 

1 Diluted earnings per share reflects the potential conversion of the convertible debt and share based payments. An adjustment has    been made to diluted earnings at 30 June 2017 and 31 December 2017 to take account of the impact of the convertible debt.  conversion.

 

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

 

 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

Note 8 - Retirement Benefit Plan Asset

The Group operates a funded defined benefit retirement scheme for qualifying employees that is closed to future accrual and new entrants.

The amounts recognised in the Statement of Financial Position are as follows:

 

 

30/06/18

 

30/06/17

 

31/12/17

 

(unaudited)

 

(unaudited)

 

(audited)

 

€000s

 

€000s

 

€000s

 

 

 

 

 

 

Fair value of plan assets

97,900

 

98,200

 

97,877

Present value of defined benefit obligation

(87,000)

 

(85,700)

 

(88,103)

 

 

 

 

 

 

Net retirement plan asset

10,900

 

12,500

 

9,774

 

 

Note 9 - Financial Instruments and Fair Value Measurement

(a)     Financial Instruments

 

30/06/18

 

30/06/17

 

31/12/17

 

(unaudited)

 

(unaudited)

 

(audited)

 

€000s

 

€000s

 

€000s

Financial Assets

 

 

 

 

 

At amortised cost:

 

 

 

 

 

Deposits with banks

178,286

 

185,781

 

195,985

 

 

 

 

 

 

At fair value:

 

 

 

 

 

Investments held for trading

81,228

 

46,159

 

45,347

Available for sale investments

744,224

 

736,483

 

758,687

 

 

 

 

 

 

At cost:

 

 

 

 

 

Loans

574

 

705

 

681

Other receivables

68,518

 

71,161

 

64,020

Cash and cash equivalents

35,572

 

31,516

 

27,176

 

 

 

 

 

 

 

 

 

 

 

 

Financial Liabilities

 

 

 

 

 

At amortised cost:

 

 

 

 

 

Convertible debt

53,268

 

51,807

 

52,525

 

 

 

 

 

 

At cost:

 

 

 

 

 

Payables

33,593

 

30,402

 

30,667

 

 

 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

Note 9 - Financial Instruments and Fair Value Measurement (continued)

(b)    Fair value measurement

The following table compares the fair value of financial assets and liabilities with their carrying values:

 

 

30/06/18

30/06/18

30/06/17

30/06/17

31/12/17

31/12/17

 

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(audited)

(audited)

 

Fair
value

Carrying value

Fair
value

Carrying value

Fair
value

Carrying value

 

€000s

€000s

€000s

€000s

€000s

€000s

Financial assets

 

 

 

 

 

 

Loans

689

574

846

705

817

681

Financial investments

1,003,738

1,003,738

968,423

968,423

1,000,019

1,000,019

Financial liabilities

 

 

 

 

 

 

Convertible Debt

66,406

53,268

54,880

51,807

66,406

52,525

 

The carrying amount of the following financial assets and liabilities is considered a reasonable approximation of their fair value:

•     Other receivables

•     Cash and cash equivalents

•     Payables

 

The following tables provide an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

•     Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

•     Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

•     Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).  Among the valuation techniques used are net asset or net book value or the net present value of future cash flows based on operating projections.

 

 

 

 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

Note 9 - Financial Instruments and Fair Value Measurement (continued)

 

 

30 June 2018 (unaudited)

Level 1

Level 2

Level 3

Total

 

€000s

€000s

€000s

€000s

Assets

 

 

 

 

Loans

-

689

-

689

Investment property

-

18,000

-

18,000

Property held for own use

-

14,754

-

14,754

Financial assets

 

 

 

 

Investments held for trading - quoted shares

292

-

-

292

Investments held for trading - UCIT Funds

80,936

-

-

80,936

AFS1 investments - quoted debt securities

743,380

-

-

743,380

AFS1 investments - unquoted investments

-

-

844

844

Deposits with banks

178,286

-

-

178,286

Cash and cash equivalents

35,572

-

-

35,572

 

 

 

 

 

Total assets

1,038,466

33,443

844

1,072,753

Liabilities

 

 

 

 

Convertible debt

-

66,406

-

66,406

 

 

 

 

 

Total liabilities

-

66,406

-

66,406

1Available for sale

 

 

30 June 2017 (unaudited)

Level 1

Level 2

Level 3

Total

 

€000s

€000s

€000s

€000s

Assets

 

 

 

 

Loans

-

846

-

846

Investment property

-

16,400

-

16,400

Property held for own use

-

15,905

-

15,905

Financial assets

 

 

 

 

Investments held for trading - quoted shares

21,928

-

-

21,928

Investments held for trading - UCIT Funds

24,231

-

-

24,231

AFS1 investments - quoted debt securities

735,639

-

-

735,639

AFS1 investments - unquoted investments

-

-

844

844

Deposits with banks

185,781

-

-

185,781

Cash and cash equivalents

31,516

-

-

31,516

 

 

 

 

 

Total assets

999,095

33,151

844

1,033,090

Liabilities

 

 

 

 

Convertible debt

-

54,880

-

54,880

 

 

 

 

 

Total liabilities

-

54,880

-

54,880

1Available for sale

 

 

 

 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

Note 9 - Financial Instruments and Fair Value Measurement (continued)

 

 

 

 

 

 

 

31 December 2017 (audited)

Level 1

Level 2

Level 3

Total

 

€000s

€000s

€000s

€000s

Assets

 

 

 

 

Loans

-

817

-

817

Investment property

-

18,000

-

18,000

Property held for own use

-

14,754

-

14,754

Financial assets

 

 

 

 

Investments held for trading - quoted shares

20,935

-

-

20,935

Investments held for trading - UCITs

24,412

-

-

24,412

AFS1 investments - quoted debt securities

757,843

-

-

757,843

AFS1 investments - unquoted investments

-

-

844

844

Deposits with banks

195,985

-

-

195,985

Cash and cash equivalents

27,176

-

-

27,176

 

 

 

 

 

Total assets

1,026,351

33,571

844

1,060,766

 

 

 

 

 

Liabilities

 

 

 

 

Convertible debt

-

66,406

-

66,406

 

 

 

 

 

Total liabilities

-

66,406

-

66,406

1Available for sale

 

 

 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

A reconciliation of Level 3 fair value measurement of financial assets is shown in the table below

 

 

30/06/18

30/06/17

31/12/17

 

(unaudited)

(unaudited)

(audited)

 

€000s

€000s

€000s

 

 

 

 

Opening balance Level 3 financial assets

844

844

844

Additions

-

-

-

Disposals

-

-

-

Unrealised gains/(losses) recognised in Consolidated Income Statement

 

-

 

-

 

-

 

 

 

 

Closing balance Level 3 financial assets

844

844

844

 

 

Available for sale investments grouped into Level 3 consist of a number of small unquoted investments.  The values attributable to these investments are derived from a number of valuation techniques including net asset or net book value or the net present value of future cash flows based on operating projections.  A change in one or more of these inputs could have an impact on valuations.  The maximum exposure the Group has in relation to Level 3 valued financial assets at 30 June 2018 is €844,000 (30 June 2017: €844,000; 31 December 2017: €844,000).

 

 

Note 10 - Transactions with related parties

 

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 Group) comprises the Board of Directors and Company Secretary of FBD Holdings plc and the members of the Executive Management Team.  Full disclosure in relation to the compensation of the Board of Directors and details of Directors' share options are provided in the Report on Directors' Remuneration in the 2017 Annual Report. An analysis of share-based payments to key management personnel is also included in Note 40 of the 2017 Annual Report.

 

Note 11 - Contingent liabilities and contingent assets

 

There were no contingent liabilities or contingent assets at 30 June 2018, 30 June 2017 or 31 December 2017.

 

Note 12 - Information

 

This half yearly report and the Annual Report for the year ended 31 December 2017 are available on the Company's website at www.fbdgroup.com.

 

Note 13 - Approval of Half Yearly Report

 

The half yearly report was approved by the Board of Directors of FBD Holdings plc on 31 July 2018.

 

 

 

FBD HOLDINGS PLC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2018

 

RESPONSIBILITY STATEMENT

 

The Directors are responsible for preparing the Half Yearly Financial Report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the related Transparency Rules of the Central Bank of Ireland and with IAS 34, Interim Financial Reporting as adopted by the European Union.

 

We confirm that to the best of our knowledge:

a)    the Group condensed set of interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union;

b)    the interim management report includes a fair review of the important events that have occurred during the first six months of the financial year, and their impact on the condensed set of interim financial statements and the principal risks and uncertainties for the remaining six months of the financial year;

c)     the interim management report includes a fair review of related party transactions that have occurred during the first six months of the current financial year and that have materially affected the financial position or the performance of the Group during that period, and any changes in the related parties' transactions described in the last Annual Report that could have a material effect on the financial position or performance of the Group in the first six months of the current financial year.

 

 

 

On behalf of the Board

 

 

 

 

 

Liam Herlihy                                                   Fiona Muldoon   

Chairman                                                        Group Chief Executive

 

31 July 2018

 

 

 

 

APPENDIX

ALTERNATIVE PERFORMANCE MEASURES (APM's)

 

The Group uses the following alternative performance measures: Loss ratio, expense ratio, combined operating ratio, annualised investment return, net asset value per share, return on equity and gross written premium.

 

Loss ratio (LR), expense ratio (ER) and combined operating ratio (COR) are widely used as a performance measure by insurers, and give users of the financial statements an understanding of the underwriting performance of the entity. Investment return is used widely as a performance measure to give users of financial statements an understanding of the performance of an entities investment portfolio. Net asset value per share (NAV) is a widely used performance measure which provides the users of the financial statements the book value per share. Return on equity (ROE) is also a widely used profitability ratio that measures an entity's ability to generate profits from its shareholder investments. Gross written premium refers to the revenue of an insurance company and is widely used across the general insurance industry.  

 

The calculation of the APM's is based on the following data:

                                                                                                                                                                                                                         

 

Half year

ended
30/06/18 (unaudited)

 

Half year

ended 30/06/17 (unaudited)

 

Year

ended 31/12/17 (audited)

 

€000s

 

€000s

 

€000s

Loss ratio

 

 

 

 

 

Net claims and benefits

102,596

 

111,971

 

203,144

Movement in other provisions

2,107

 

26

 

1,945

Total claims incurred

104,703

 

111,997

 

205,089

Net premium earned

165,510

 

158,931

 

325,932

Loss ratio (Total claims incurred/Net premium earned)

63.3%

 

70.5%

 

62.9%

 

 

 

 

 

 

Expense ratio

 

 

 

 

 

Other underwriting expenses

41,873

 

35,862

 

75,908

Net premium earned

165,510

 

158,931

 

325,932

Expense ratio (Underwriting expenses/Net premium earned)

25.3%

 

22.6%

 

23.3%

 

 

 

 

 

 

Combined operating ratio

%

 

%

 

%

Loss ratio

63.3%

 

70.5%

 

62.9%

Expense ratio

25.3%

 

22.6%

 

23.3%

Combined operating ratio (Loss ratio + Expense ratio)

88.6%

 

93.1%

 

86.2%

 

 

 

 

 

 

Annualised investment return

€000s

 

€000s

 

€000s

Investment return recognised in consolidated income statement

 

1,297

 

 

3,898

 

 

9,361

Investment return recognised in statement of comprehensive income

 

(3,474)

 

 

(423)

 

 

2,807

Total investment return

(2,177)

 

3,475

 

12,168

 

 

 

 

 

 

Average investment assets                                

1,063,672

 

1,033,507

 

1,027,637

Investment return (Total investment return/Average  investment assets)

 

(0.4%)1

 

 

0.7%1

 

 

1.2%

 

 

 

 

 

 

 

 

 

 

 

 

1Annualised

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Half year

ended
30/06/18 (unaudited)

 

Half year

ended 30/06/17 (unaudited)

 

Year

ended 31/12/17 (audited)

Net asset value per share (NAV per share)

€000s

 

€000s

 

€000s

Shareholders' funds - equity interests

277,475

 

238,530

 

271,626

 

 

 

 

 

 

Number of shares

 

 

 

 

 

Weighted average number of ordinary shares

34,666,201

 

34,666,201

 

34,666,201

 

 

 

 

 

 

 

Cent

 

Cent

 

Cent

Net asset value per share (Shareholders funds /Weighted average number of ordinary shares)

 

800

 

 

688

 

 

784

 

 

 

 

 

 

Return on Equity

€000s

 

€000s

 

€000s

Weighted average equity attributable to ordinary equity holders of the parent

 

274,551

 

 

232,039

 

 

248,587

 

Result for the period

16,115

 

10,311

 

42,696

 

Return on equity (Result for the period/Weighted average equity attributable to ordinary equity holders of the parent)

 

 

12%1

 

 

 

9%1

 

 

 

17%

 

Gross premium written: The total premium on insurance underwritten by an insurer or reinsurer
during a specified period, before deduction of reinsurance premium.

 

1Annualised

 

 

 

Independent review report to FBD Holdings plc

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed FBD Holdings plc's condensed consolidated interim financial statement (the "interim financial statements") in half-yearly report of FBD Holdings plc for the six month period ended 30 June 2018.  Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, Interim Financial Reporting, as adopted by the European Union and the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Central Bank of Ireland.

What we have reviewed

The interim financial statements, comprise:

·           the condensed consolidated statement of financial position as at 30 June 2018;

·           the condensed consolidated income statement for the period then ended;

·           the condensed consolidated statement of comprehensive income for the period then ended;

·           the condensed consolidated statement of cash flows for the period then ended;

·           the condensed consolidated statement of changes in equity for the period then ended; and

·           the explanatory notes to the interim financial statements.

The interim financial statements included in the half-yearly report have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as adopted by the European Union and the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Central Bank of Ireland.

As disclosed in note 2 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The half-yearly report, including the interim financial statements, is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Central Bank of Ireland.

Our responsibility is to express a conclusion on the interim financial statements in the half-yearly report based on our review.  This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Central Bank of Ireland and for no other purpose.  We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

 

 

 

 

What a review of interim financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the Auditing Practices Board for use in the United Kingdom and Ireland.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

 

 

PricewaterhouseCoopers

Chartered Accountants

Dublin

 

31 July 2018

 

 

 

(a)       The maintenance and integrity of the FBD Holdings plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

(b)       Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
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