FBD Holdings PLC (FBH) - Interim Management Statement
RNS Number : 3859R
FBD Holdings PLC
19 November 2012
FBD HOLDINGS PLC
Interim Management Statement
19 November 2012
FBD Holdings plc ('FBD' or the 'Group') issues the following Interim
Management Statement covering the period from 1 July 2012 to date, in
accordance with the reporting requirements of the EU Transparency Directive.
FBD has continued to perform strongly, building on its first half to deliver
strong earnings and profit after taxation in the second half of 2012 to date.
The Group has performed ahead of market guidance, primarily due to the
continuation of the first half claims performance in the underwriting
Gross premiums written are marginally lower than the previous year but well
ahead of the market, which contracted by 6.3% in the first six months of the
year. Year to date, net earned premium is marginally ahead of last year. The
Group's market share is estimated to have risen further, continuing the
progress achieved in eleven of the last twelve years.
In the second half of 2012 to date, policy volumes have declined marginally.
Prices in the market for certain insurance products have continued to move
lower. In some cases, this is attributable to reducing risk as economic
activity declines. In other cases, this does not fully explain the reduction
in premium and, in these cases, FBD has maintained its underwriting
FBD continued to develop its multi-channel distribution strategy in response
to customer needs. The sales office network has made further progress in
developing farming insurance, winning additional farm customers in the second
half of 2012 to date. Our online channels, FBD.ie and NoNonsense.ie, are
attracting growing numbers of customers from their respective target markets
and the initiative to enter into partnerships with insurance brokers to
increase our penetration of the business insurance market is progressing
Three factors have combined to provide a better than expected loss ratio for
the second half of 2012 to date.Firstly, the continued implementation of
sustainable risk selection and claims management initiatives, which together
with a positive operating environment, mean that the favourable trend in the
cost of attritional claims continued into the second half of the year.
Secondly, whereas large claims increased in the first half of the year, they
have been better than anticipated in the second half to date. Finally,
weather related claims in this period have been lower than expected.
The Group continues to focus on efficiency and productivity improvements to
maintain FBD's competitive cost structure.
FBD's financial services businesses continued to deliver solid performances in
difficult market conditions and have proactively managed their cost structures
to reflect the economic environment. Year to date, their profit contribution
is ahead of both last year and expectations.
Trading performance in the property and leisure joint venture continued to
improve over the peak summer period with growth in occupancy, rates and
revenue per room, particularly in the Irish market. Year to date, the trading
performance is ahead of both last year and expectations. Sales of units in La
Cala continued to exceed expectations and the joint venture continued to be
strongly cash generative.
Profit after Taxation
The Group disposed of land underlying a secured loan at a profit of €4.4m over
its book value at 30 June 2012, thereby reducing the remaining balance sheet
value of secured loans to €5.2m. This gain coupled with a positive
performance on equity investments has resulted in positive short term
investment fluctuations year to date. Profit after taxation is ahead of
expectations and last year.
The Group continues to have a strong capital base and balance sheet and a
prudent reserving strategy. The robust reserving position has been maintained
and the solvency ratio has been further strengthened. Given the uncertainty
of global investment markets, FBD continues to view a low-risk investment
allocation, prioritising capital preservation over rate of return, as the best
strategy for protecting the interests of customers and shareholders. The
Board is committed to maintaining strong solvency and liquidity margins while
at the same time continuing to focus on efficient use of capital and
delivering a superior return on equity.
FBD Insurance will focus on profitable and sustainable growth, maintaining
underwriting discipline and constantly evolving its business to reflect
customers' needs. Further opportunities to maintain FBD's cost
competitiveness will be identified and implemented. The Group is well
positioned to deliver profitable growth and superior returns to shareholders
in the future.
The Group is confident that, due to the excellent performance of the core
underwriting business, subject to exceptional events arising, it will deliver
full year 2012 operating earnings per share of 155 to 165 cent, an increase of
10 cent on previous guidance.
*Operating earnings per share is based on longer term rates of return.
FBD Holdings plc Telephone
Andrew Langford, Group Chief Executive +353 1 409 3208
Cathal O'Caoimh, Group Finance Director
Peter Jackson, Head of Investor Relations
Joe Murray +353 1 498 0300
About FBD Holdings plc ("FBD")
FBD is one of Ireland's largest property and casualty insurers looking after
the insurance needs of farmers, private individuals and business owners.
The following details relate to FBD's ordinary shares of €0.60 each which are
Listing Irish Stock Exchange UK Listing Authority
Listing Category Dual Premium (Equity)
Trading Venue Irish Stock Exchange London Stock Exchange
Market Main Securities Market Main Market
ISIN IE0003290289 IE0003290289
Ticker EG7.IR and FBD.I FBH.L
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.
FBD Holdings plc, FBD House, Bluebell, Dublin 12
Registered in Dublin, Ireland Registered Number 135882
This information is provided by RNS
The company news service from the London Stock Exchange
IMSLLFFDLDLRLIF -0- Nov/19/2012 07:00 GMT
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