Alexander Forbes - Reviewed Financial Results for the year ended
Finance24, South Africa -
AFB Alexander Forbes - Reviewed Financial Results for the year ended 31 March 2006 Alexander Forbes Limited Registration number: 1958/001974/06. Share code: AFB. ISIN code: ZAE000018230 Reviewed Financial Results for the year ended 31 March 2006 * 11% growth in revenues exceeding R5 billion for the first time * Continued strong operating results across our South African and African businesses (+13%) * Significant growth in profits (+29%) and assets of Investment Solutions, with global assets under management totalling R124 billion at year end * Exceptional growth in profits from our International Financial Services businesses (+39%) * 3% growth in core earnings per share, despite difficult trading conditions in our International Risk Services business * Distribution to shareholders of 59 cents per share Review of Operations Overview The year to 31 March 2006 has been characterised by: - 11% revenue growth, with income from operations exceeding R5 billion for the first time - Continued strong operating results across our South African and African businesses (+13%) - Significant growth in profits (+29%) and assets of Investment Solutions, with global assets under management totalling R124 billion at year end - Exceptional growth in profits from our International Financial Services businesses (+39%) - 3% growth in core earnings per share, despite difficult trading conditions in our International Risk Services business. (Core earnings per share increased by 15% excluding International Risk Services) - Distribution to shareholders of 59 cents per share - An independent review of our South Africa Financial Services business, resulting in a proposed settlement to clients of R380 million and a further provision raised of R100 million. We will institute additional compliance procedures and have introduced a number of significant changes to ensure transparency in all dealings with our clients. Alexander Forbes" objective is to be the industry leader in governance and disclosure to clients. Trading results of operations Trading results of operations increased to R791 million for the year. This result was achieved on the back of 11% revenue growth, with income from operations exceeding R5 billion for the first time in the history of the group. The International Risk Services business continued to experience difficult trading conditions during the current year. As detailed below, we are currently reviewing the optimal positioning of International Risk Services to capitalize on the number of growth and development opportunities. Trading results from the group"s other operations increased 15% in comparison to the previous year. Investment Solutions The group"s multi-manager investment subsidiary, Investment Solutions, recorded 23% revenue growth in its African operations. There was even stronger growth in the trading result up 29% to R264 million resulting from the operational gearing which is integral to the Investment Solutions" business model. Average assets under management increased 33% with closing assets in South Africa reaching R114 billion at 31 March 2006. The business benefited from strong equity market growth and net new business inflows which totalled R3 billion for the year. Relative investment performance continued to be competitive with most portfolios in line with or ahead of their benchmarks. The UK Investment Solutions business, which was launched to the market in September 2003, continued to attract new clients with assets under management doubling to total GBP890 million at 31 March 2006. This business is gathering momentum as it approaches GBP1 billion of assets under management with a competitive three-year investment performance track record. The trading loss recorded by this business is a reflection of the investment made in growing it"s client and asset base. Global assets under management totalled R124 billion at year end. Africa Risk & Insurance Services The Africa Risk & Insurance Services business delivered a trading result of R187 million, which is marginally down on the previous year. This was achieved despite a R12 million decrease in operational interest income, a R16 million reduction in contribution from Personal Lines insurance and against a backdrop of difficult industry conditions. Excluding operational interest and the reduced contribution from Personal Lines insurance, the Africa Risk & Insurance business recorded 7% revenue growth and 11% growth in profits. This is a most credible result given the trading conditions prevailing during the year and the results recorded within its industry. The main contributors to the good trading result were the core Corporate Broking business, Guardrisk (cell captive insurance), the Afrinet network (insurance broking businesses in 10 African countries outside South Africa) and Alexander Forbes Compensation Technologies (claims facilitation for medical providers). Importantly, good new business gains continued to be recorded by the core Corporate Broking business during the year with a number of large corporate and parastatal appointments. In addition, the business has been successful in attracting additional key client facing staff. Africa Financial Services The Africa Financial Services business recorded strong revenue growth with trading results from operations up 12% to R219 million for the year. This growth was driven by a strong performance from the core Actuarial Consulting business with increased revenue from special projects, including those relating to legislative change. The Retirement Funds Administration business delivered a solid result with members under administration increasing to almost 1,5 million at year end. The Umbrella Fund Retirement business recorded strong growth with members under administration growing 35% to over 97 000 at year end. This business is expected to continue to record strong growth into the future. The other main contributors to the strong growth in trading result were: Health Care Consultants and Health Management Solutions; Homeplan, which increased its pension backed lending book by R550 million to R2.1 billion during the year; and Financial Planning Consultants, which benefited from new business written and strong equity markets during the year. International Risk Services The International Risk Services business continued to trade in difficult conditions, including rate reductions experienced in a number of insurance classes particularly in Professional Indemnity insurance. The business also incurred costs in implementing positive changes, defending its market position and hiring new production talent thereby negatively impacting short-term profitability. However, revenue decreased only marginally as a result of the factors mentioned above due to positive underlying growth particularly in the International and Specialist lines. Trading results from operations decreased to GBP1.6 million for the year. Following a thorough review by the new management team led by Stewart McCulloch, and material actions taken thus far, a number of growth and development opportunities are now being actively pursued. Further, the management team has recently been significantly strengthened with the addition of Mike Hammond (former CEO of JLT Risk Solutions) who has recently joined the group as deputy executive chairman of International Risk Services. To optimally position International Risk Services to capitalize on the current market opportunities in its sector, the group and senior management team of the business are currently considering the structural options to best support enhanced growth opportunities. These include the possibility of involving a new private investor in International Risk Services alongside Alexander Forbes. Discussions are being held with a few select investors in this regard and, in the event that this option is pursued, it is likely that Alexander Forbes" shareholding in International Risk Services will reduce. International Financial Services The International Financial Services businesses achieved revenue growth of 24% delivering a trading result of GBP10,3 million up 39% on the previous year. The actuarial consulting business acquired in 2002, Lane Clark & Peacock, recorded exceptional growth in revenue and profits, benefiting from increased demand for its services in the UK and Swiss markets resulting from continuing pensions market turmoil and legislative change. The UK-based pensions IFA (Independent Financial Advisory) business also recorded double digit revenue and profit growth with a strong sales performance in the final quarter of the financial year. The UK-based DC Link Administration business, acquired in 2002, incurred a trading loss but achieved 40% growth in members under administration with members totaling 57 000 at year end. The continuing UK Direct Marketing operation achieved a break even result as a result of marketing spend incurred during the year. The part of the UK Direct Marketing operations which, as previously advised, is in run-off is shown separately from trading results of operations in the income statement. Core earnings per share An adjusted measure of headline earnings per share, core earnings per share, has been presented in order to facilitate a more meaningful assessment of the group"s trading performance. This adjusted measure: * excludes the financial effects caused by the mismatch resulting from accounting for policyholder investments as treasury shares under IFRS (refer SENS release to shareholders of 3 April 2006 and note 6 in this announcement); * excludes the anticipated reduced profit contribution from the UK direct marketing entity in run-off; * excludes one-off exceptional charges and gains, including the provisions for client settlements made in the current year; and * reflects the position had the equity issue associated with the repurchase of exchangeable bonds in September 2004 occurred at the commencement of the previous financial year. (A reconciliation is provided of the calculation of headline and core earnings per share below the abridged income statement contained in this announcement.) Core earnings per share totalled 116 cents for the current year, representing a 3% increase compared to the previous year. As detailed above, growth was adversely impacted by the trading results of International Risk Services. Excluding this business, core earnings per share increased 15%, reflecting the strong trading performance across most of the group"s operations. Proposed distribution to shareholders The overall growth in the group"s core operations, as reflected by the growth in core earnings per share, have enabled the Board to propose a 59 cent per share distribution to shareholders. This represents a 12% decrease compared to the distribution for the previous year, reflecting the reduced profit contribution from International Risk Services and the UK direct marketing entity in run off. The distribution is in line with the previously communicated policy of 2 times dividend cover (based on core earnings per share). Change in directorate As previously announced Rael Gordon has indicated his intention to step down from the position of Group Chief Executive. The board is pleased that he has agreed to remain involved for a period in the management of the international part of the group, which is managed from the UK. The Africa Managing Director, Peter Moyo, has been appointed Group Chief Executive with effect from 1 July 2006. He will continue to be based in Johannesburg. The board is delighted to have an executive of his calibre take over the leadership of the group. Proposed client settlements in respect of historical business practices As previously advised, the group has performed a review in relation to the practice within the South African Financial Services business of bulking of retirement funds" current bank accounts and related business practices. This review included the engagement of lawyers, Deneys Reitz and independent auditors, Ernst & Young. A sub-committee consisting of non-executive directors of the Alexander Forbes Limited Board was appointed to consider the findings of the review and to make recommendations to the Board in this regard. After consultation with the FSB, the first part of this process has been substantially concluded and has resulted in an estimated settlement to clients of R380 million. The wider review is nearing completion; this has identified a limited number of additional potential historical exposures for which a further provision of R100 million has been raised. These amounts have been fully provided in the group"s results for the current year. Importantly, the exposures identified primarily relate to historical practices which do not have a material effect on current earnings. Notwithstanding the strong trading results from most of the group"s operations, this has been one of the most difficult periods in Alexander Forbes" 70 year history with significant issues raised concerning the historic transparency of income earned by our South African Financial Services business. We failed to live up to our history of dedicated client service in this area of our business, which we sincerely regret. We recognise that the proposed settlement to clients represents only the first step in restoring the trust of our clients. The implementation of additional compliance procedures is underway and we have introduced a number of significant changes to ensure transparency in all dealings with our clients. We do not underestimate the task of restoring the trust of our clients and staff, but are fortunate to have a pool of talented people committed to the task of setting the industry standard. Developments Shareholders are referred to the announcement dated 6 June 2006, which provided information regarding the possibility of involving a new private investor in the International Risk Services business alongside Alexander Forbes. The announcement also provided information regarding the receipt of a number of unsolicited approaches from various parties about the possibility of concluding a transaction with the group. Following these approaches, the group has commenced discussions with private equity parties regarding a potential transaction to acquire 100% of the group. The discussions are in an early stage and may or may not result in a transaction. As a result of the potential transactions mentioned above, shareholders are advised to continue to exercise caution when trading in the Alexander Forbes" securities until a further announcement is made. Prospects As reported in this announcement: - the strategic re-positioning of International Risk Services is in process; - all of the other core businesses of the group have delivered a strong trading performance; - significant positive actions have been taken to remedy the historical issues affecting the South African Financial Services business (importantly, the exposures identified primarily relate to historical practices which do not have a material effect on current earnings). This provides the group with a solid platform for moving forward in the new financial year. For and on behalf of the board P L Heinamann Rael Gordon Peter Moyo Non-executive Group chief Group chief Chairman executive executive elect Johannesburg 19 June 2006 Income Statement 31 March 31 March 2006 2005 Rm % Rm Income from operations (note 3) 5 369 11 4 858 Other income 71 107 Operating expenses (5 094) (4 229) Operating profit 346 (53) 736 Analysed as follows: Trading results of operations 791 2 772 Profit from direct marketing entity in run-off 41 68 Consolidation of group cell captive insurance arrangement (1) 23 Impairment and other capital items (19) (21) Exceptional gains and losses (note 4) (466) (106) Operating profit 346 (53) 736 Net interest and investment income (note 5) (5) (63) Net fair value gain (offset by taxation expense attributable to policyholders) 18 9 Effect of accounting for policyholder investments as treasury shares under IFRS (note 6) (81) (30) Share of net profits of associates (note 7) 17 5 Profit before taxation 295 (55) 657 Taxation - Taxation expense (220) (190) - Taxation attributable to policyholders" funds (18) (9) Profit for the year 57 (88) 458 Attributable to: - Ordinary shareholders 12 (97) 413 - Minority interests 45 45 57 (88) 458 EARNINGS PER SHARE (cents) 3 (97) 105 DILUTED EARNINGS PER SHARE (cents) 3 (97) 104 Number of shares (millions) - weighted average 443 394 - diluted weighted average 447 396 Note on calculation of headline and core earnings per share: Profit attributable to ordinary shareholders 12 413 Adjusted for: Impairment charges and other capital items 19 21 Share of headline adjusting items of associates (14) 2 Headline earnings attributable to ordinary shareholders 17 436 Adjusted for: Profit from direct marketing entity in run-off (41) (68) Exceptional gains and losses 466 106 Loss arising from accounting for policyholder investments as treasury shares under IFRS 81 30 Reversal of interest effects of exchangeable bonds - 38 Tax effects on above items 13 (23) Core earnings attributable to ordinary shareholders 536 3 519 Weighted average number of shares 443 394 Adjusted for: Policyholder investments accounted for as treasury shares and deducted from equity under IFRS 19 15 Shares issued to repurchase exchangeable bonds - 51 Adjusted weighted average number of shares in issue 462 460 Headline earnings per share (cents) Effects of adjustments detailed above 4 (96) 111 Profit from direct marketing entity in run-off (6) (12) Exceptional gains and losses 105 19 Accounting for policyholder investments as treasury shares under IFRS 13 3 Repurchase of exchangeable bonds - (8) Core earnings per share (cents) 116 3 113 Segmental Analysis Total income Trading results from operations of operations 31 March 31 March 31 March 31 March 2006 % 2005 2006 % 2005 AFRICA (Rm) Risk & Insurance Services 875 4 842 187 (3) 193 Financial Services 1 125 16 972 219 12 195 Investment Solutions 761 23 617 264 29 204 Total Africa (Rm) 2 761 14 2 431 670 13 592 INTERNATIONAL (GBPm) Risk Services 129,6 (1) 131,5 1,6 (81) 8,5 Financial Services 95,5 24 76,8 10,3 39 7,4 Investment Solutions 5,6 60 3,5 (0,7) (250) (0,2) Total International (GBPm) 230,7 9 211,8 11,2 (29) 15,7 Total International (Rm) 2 608 7 2 427 121 (33) 180 Total Group (Rm) 5 369 11 4 858 791 2 772 Africa International 31 March 31 March 31 March 31 March 2006 2005 2006 2005 Trading results of operations 670 592 121 180 Profit from direct marketing entity in run-off - - 41 68 Consolidation of group cell captive insurance arrangement (1) 10 - 13 Exceptional gains and losses (note 4) (480) - 14 (106) Operating profit before impairment charges 189 602 176 155 Net interest and investment income (4) (13) (1) (50) Net fair value gain 18 9 - - Loss arising from accounting for policy-holder investments as treasury shares under IFRS (81) (30) - - Share of headline profits of associates (2) - 5 7 Headline profit before tax 120 568 180 112 Taxation on headline profit (225) (176) (13) (23) Minority interests (11) (17) (34) (28) Headline earnings attributable to ordinary shareholders (116) 375 133 61 Adjusted for: Profit from direct marketing entity in run-off - - (41) (68) Exceptional gains and losses 480 - (14) 106 Loss arising from accounting for policyholder investments as treasury shares under IFRS 81 30 - - Reversal of interest effects of exchangeable bonds - - - 38 Tax effects on above items - - 13 (24) Core earnings attributable to ordinary shareholders 445 405 91 113 Total (Segmental continued) 31 March 31 March 2006 2005 Trading results of operations 791 772 Profit from direct marketing entity in run-off 41 68 Consolidation of group cell captive insurance arrangement (1) 23 Exceptional gains and losses (note 4) (466) (106) Operating profit before impairment charges 365 757 Net interest and investment income (5) (63) Net fair value gain 18 9 Loss arising from accounting for policy-holder investments as treasury shares under IFRS (81) (30) Share of headline profits of associates 3 7 Headline profit before tax 300 680 Taxation on headline profit (238) (199) Minority interests (45) (45) Headline earnings attributable to ordinary shareholders 17 436 Adjusted for: Profit from direct marketing entity in run-off (41) (68) Exceptional gains and losses 466 106 Loss arising from accounting for policyholder investments as treasury shares under IFRS 81 30 Reversal of interest effects of exchangeable bonds - 38 Tax effects on above items 13 (23) Core earnings attributable to ordinary shareholders 536 519 Balance Sheet 31 March 31 March 2006 2005 Rm Rm ASSETS Financial assets held under multi-manager investment contracts 118 373 85 518 Financial assets held under cell captive insurance facilities 4 729 3 638 Housing loans secured by retirement fund assets 750 - Property and equipment 222 267 Purchased and developed computer software 29 24 Goodwill 2 091 2 154 Other intangible assets 48 39 Investments in associates 68 66 Deferred tax assets 257 253 Financial assets 367 305 Trade and other receivables 1 303 1 509 Cash and cash equivalents 2 803 2 628 Total assets 131 040 96 401 EQUITY Ordinary shareholders" equity 1 531 1 995 Minority interests 82 102 Total equity 1 613 2 097 LIABILITIES Financial liabilties held under multi-manager investment contracts 118 619 85 691 Liabilities of cell captive insurance facilities 4 729 3 638 Securitisation funding for housing loans 750 - Borrowings 678 760 Retirement benefit obligations 236 308 Deferred tax liabilities 95 55 Deferred consideration for acquisitions 191 187 Provisions 593 146 Other liabilities 3 536 3 519 Total liabilities 129 427 94 304 Total equity and liabilities 131 040 96 401 Total equity per above 1 613 2 097 Adjustment for policyholder investments accounted for as treasury shares and deducted from equity under IFRS 184 161 Adjusted total equity 1 797 2 258 Number of shares in issue 443 394 Adjustment for policyholder investments accounted for as treasury shares and deducted from equity under IFRS 19 15 Adjusted number of shares in issue 462 409 Net asset value per share (cents) 364 532 Adjustment for policyholder investments accounted for as treasury shares and deducted from equity under IFRS 25 20 Adjusted net asset value per share (cents) 389 552 Statement of Changes in Equity Treasury Share share capital and and share share option Other premium reserve reserves Rm Rm Rm 31 March 2004 As previously reported 86 162 892 Amended for adoption of IFRS - (151) (400) Restated at 31 March 2004 86 11 492 Share issues 1 175 Movement in share option reserve 9 (17) 37 Treasury shares purchased (12) Movement in policyholder investments accounted for as treasury shares under IFRS (10) Foreign currency translation and other movements 32 Profit for the year 413 Distribution to shareholders (221) Movement in minority interests At 31 March 2005 1 270 (28) 753 Share issues 1 Movement in share option reserve 76 (91) 23 Treasury shares purchased (49) Movement in policyholder investments accounted for as treasury shares under IFRS (23) Foreign currency translation and other movements (115) Profit for the year 12 Distribution to shareholders (298) Movement in minority interests At 31 March 2006 1 049 (191) 673 Statement of Changes in Equity (continued) Ordinary share- holders" Minority Total equity interests equity Rm Rm Rm 31 March 2004 As previously reported 1 140 107 1 247 Amended for adoption of IFRS (551) (30) (581) Restated at 31 March 2004 589 77 666 Share issues 1 175 1 175 Movement in share option reserve 29 29 Treasury shares purchased (12) (12) Movement in policyholder investments accounted for as treasury shares under IFRS (10) (10) Foreign currency translation and other movements 32 2 34 Profit for the year 413 45 458 Distribution to shareholders (221) (46) (267) Movement in minority interests - 24 24 At 31 March 2005 1 995 102 2 097 Share issues 1 1 Movement in share option reserve 8 8 Treasury shares purchased (49) (49) Movement in policyholder investments accounted for as treasury shares under IFRS (23) (23) Foreign currency translation and other movements (115) (6) (121) Profit for the year 12 45 57 Distribution to shareholders (298) (52) (350) Movement in minority interests - (7) (7) At 31 March 2006 1 531 82 1 613 Cash Flow Statement 31 March 31 March 2006 2005 Rm Rm Cash from trading operations 958 931 Cash from direct marketing entity in run-off 41 68 Movement in working capital and insurance balances 243 76 Taxation and dividend payments (449) (466) Cash from operating activities 793 609 Net subsidiaries and businesses acquired (64) (72) Housing loans provided to clients secured by retirement fund assets (750) - Capital expenditure for the year (92) (132) Net movement in financial assets (25) 6 Cash from investing activities (931) (198) Net proceeds of share issues/treasury shares purchased (48) 1 163 Equity deduction resulting from accounting for treasury shares under IFRS (23) (10) Net borrowings repaid (68) (1 373) Securitisation funding raised for housing loans 750 - Withdrawal of matching deposit - 227 Premium finance receivables (24) (25) Cash settlement of retirement obligations (82) (59) Distributions to minority shareholders (52) (46) Cash from financing activities 453 (123) Net cash flows 315 288 Foreign subsidiary translation adjustment (140) (16) Net movement in cash balances 175 272 Notes 1. Basis of preparation The abridged financial information has been prepared in accordance with, and complies with International Financial Reporting Standards ("IFRS") and the South African Companies Act of 1973, as amended. The accounting policies are consistent with those applied in the 2005 financial year except for the changes resulting from the adoption of IFRS. Details relating to these changes were presented with the group"s interim results announcement published on 14 November 2005. An additional announcement with regards to policyholder investments accounted for as treasury shares under IFRS was issued on 3 April 2006. 31 March 31 March 2006 2005 2. Exchange rates The income statements and balance sheets of foreign subsidiaries have been translated to Rands as follows: Weighted average R: GBP rate 11,3 11,5 Closing R: GBP rate 10,8 11,7 31 March 31 March 2006 2005 Rm Rm 3. Income from operations Fee and commission income 5 076 4 622 Operational interest income from insurance broking activities 63 64 Interest and other finance income from financing operations 111 63 Less: Directly related interest expense (33) - Net premium and investment income from insurance operations 622 386 Less: Net claims and transfers to policyholders" funds (470) (277) Total income from operations 5 369 4 858 4. Exceptional gains and losses Non-recurring restructuring costs (International Risk Services) 14 (111) Non-trading currency gain - 5 Proposed client settlements for historical bulking practices (380) - Provision for additional potential historical exposures (100) - Total exceptional gains and losses (466) (106) 5. Net interest and investment income Interest income 70 48 Dividend income from preference share investments 17 6 Total interest and investment income 87 54 Finance costs - bank borrowings (52) (57) Finance costs - exchangeable bonds - (40) Other finance costs (40) (20) Total net interest and investment income (5) (63) 6. Effects of accounting for policyholder investments as treasury shares under IFRS Increase in value of shares held on behalf of policyholders (69) (20) Dividends received on shares held on behalf of policyholders (12) (10) Total effects (81) (30) As advised to shareholders in the SENS statement of 3 April 2006, the IFRS requirement to account for Alexander Forbes shares held on behalf of policyholders as treasury shares results in a mismatch in accounting for the asset and liability movement, which does not reflect the economic substance of the transactions. As shown above, this mismatch has resulted in the reporting of a R81 million accounting expense in the current year (2005: R30 million expense),whereas no actual economic loss will ever be realised by the group. Adjusted measures of headline earnings per share (referred to as core earnings per share) and net asset value per share,which exclude the effects of accounting for policyholder investments as treasury shares, have been presented in order to accurately reflect the underlying economic substance of the transactions and provide meaningful reporting to shareholders. 7. Investment in associates Carrying value in balance sheet 68 66 Directors" valuation of associates 99 102 8. Capital expenditure and commitments Depreciation and amortisation for the year 113 122 Capital expenditure for the year 92 132 Operating lease commitments - Due within one year 190 213 - Thereafter 976 1 204 1 166 1 417 Capital expenditure and commitments will be funded from internal cash resources. 9. Distribution to shareholders The directors have recommended a distribution to shareholders of 59 cents per share by way of a reduction in share premium for the year ended 31 March 2006. The terms and conditions of the capital reduction are subject to specific approval by the shareholders at the forthcoming annual general meeting, to be held on 8 August 2006. In compliance with the requirements of STRATE, the following dates are applicable: Last date to trade cum the distribution Friday, 25 August 2006 Date trading commences ex the distribution Monday, 28 August 2006 Record date Friday, 1 September 2006 Date of payment Monday, 4 September 2006 Shares may not be dematerialised or rematerialised between Monday, 28 August 2006 and Friday, 1 September 2006 both days inclusive. Review Report Our auditors PricewaterhouseCoopers Inc, have reviewed the abridged financial information in this report for the year ended 31 March 2006. A copy of their unqualified review report is available on request. Directors: P L Heinamann (Chairman), J V H Robins (Deputy chairman) (British), R I Gordon (Group chief executive), M P Moyo (Group chief executive elect), M G Ilsley (Group finance director), J H Vickers (Group development director), T R T Bohlmann, J J Durand, W E Lucas-Bull, M P Nicholls (British), M C Ramaphosa, A F van Biljon, P J J van der Walt, G J Roberts-Baxter (Alternate director). Company secretary: J E Salvado. Registered office: South Africa Alexander Forbes Place, 61 Katherine Street, Sandown Telephone +27 (0) 11 269-0000. Fax +27 (0) 11 269-1111. E-mail: [email protected]. Website: www.alexanderforbes.co.za United Kingdom Alexander Forbes House, 6 Bevis Marks, London EC3A 7AF, United Kingdom Switchboard +44 (0) 20 7933-0000. Fax +44 (0) 20 7933-0915 Sponsors: J.P. Morgan Equities Limited. 1 Fricker Road, Illovo Boulevard, Johannesburg Investec Bank Limited. 100 Grayston Drive, Sandown Independent auditors: PricewaterhouseCoopers Inc. Chartered Accountants (SA) 2 Eglin Road, Sunninghill Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited. Ground Floor, 70 Marshall Street, Johannesburg PO Box 61051, Marshalltown, 2107 Investor relations: Debbie Kotzen For more information and full details of the SENS announcement, please visit our website: www.alexanderforbes.co.za Date: 20/06/2006 07:45:20 AM Produced by the JSE SENS Department
2006-06-20
Alexander Forbes - Reviewed Financial Results for the year ended
Finance24, South Africa -
AFB Alexander Forbes - Reviewed Financial Results for the year ended 31 March 2006 Alexander Forbes Limited Registration number: 1958/001974/06. Share code: AFB. ISIN code: ZAE000018230 Reviewed Financial Results for the year ended 31 March 2006 * 11% growth in revenues exceeding R5 billion for the first time * Continued strong operating results across our South African and African businesses (+13%) * Significant growth in profits (+29%) and assets of Investment Solutions, with global assets under management totalling R124 billion at year end * Exceptional growth in profits from our International Financial Services businesses (+39%) * 3% growth in core earnings per share, despite difficult trading conditions in our International Risk Services business * Distribution to shareholders of 59 cents per share Review of Operations Overview The year to 31 March 2006 has been characterised by: - 11% revenue growth, with income from operations exceeding R5 billion for the first time - Continued strong operating results across our South African and African businesses (+13%) - Significant growth in profits (+29%) and assets of Investment Solutions, with global assets under management totalling R124 billion at year end - Exceptional growth in profits from our International Financial Services businesses (+39%) - 3% growth in core earnings per share, despite difficult trading conditions in our International Risk Services business. (Core earnings per share increased by 15% excluding International Risk Services) - Distribution to shareholders of 59 cents per share - An independent review of our South Africa Financial Services business, resulting in a proposed settlement to clients of R380 million and a further provision raised of R100 million. We will institute additional compliance procedures and have introduced a number of significant changes to ensure transparency in all dealings with our clients. Alexander Forbes" objective is to be the industry leader in governance and disclosure to clients. Trading results of operations Trading results of operations increased to R791 million for the year. This result was achieved on the back of 11% revenue growth, with income from operations exceeding R5 billion for the first time in the history of the group. The International Risk Services business continued to experience difficult trading conditions during the current year. As detailed below, we are currently reviewing the optimal positioning of International Risk Services to capitalize on the number of growth and development opportunities. Trading results from the group"s other operations increased 15% in comparison to the previous year. Investment Solutions The group"s multi-manager investment subsidiary, Investment Solutions, recorded 23% revenue growth in its African operations. There was even stronger growth in the trading result up 29% to R264 million resulting from the operational gearing which is integral to the Investment Solutions" business model. Average assets under management increased 33% with closing assets in South Africa reaching R114 billion at 31 March 2006. The business benefited from strong equity market growth and net new business inflows which totalled R3 billion for the year. Relative investment performance continued to be competitive with most portfolios in line with or ahead of their benchmarks. The UK Investment Solutions business, which was launched to the market in September 2003, continued to attract new clients with assets under management doubling to total GBP890 million at 31 March 2006. This business is gathering momentum as it approaches GBP1 billion of assets under management with a competitive three-year investment performance track record. The trading loss recorded by this business is a reflection of the investment made in growing it"s client and asset base. Global assets under management totalled R124 billion at year end. Africa Risk & Insurance Services The Africa Risk & Insurance Services business delivered a trading result of R187 million, which is marginally down on the previous year. This was achieved despite a R12 million decrease in operational interest income, a R16 million reduction in contribution from Personal Lines insurance and against a backdrop of difficult industry conditions. Excluding operational interest and the reduced contribution from Personal Lines insurance, the Africa Risk & Insurance business recorded 7% revenue growth and 11% growth in profits. This is a most credible result given the trading conditions prevailing during the year and the results recorded within its industry. The main contributors to the good trading result were the core Corporate Broking business, Guardrisk (cell captive insurance), the Afrinet network (insurance broking businesses in 10 African countries outside South Africa) and Alexander Forbes Compensation Technologies (claims facilitation for medical providers). Importantly, good new business gains continued to be recorded by the core Corporate Broking business during the year with a number of large corporate and parastatal appointments. In addition, the business has been successful in attracting additional key client facing staff. Africa Financial Services The Africa Financial Services business recorded strong revenue growth with trading results from operations up 12% to R219 million for the year. This growth was driven by a strong performance from the core Actuarial Consulting business with increased revenue from special projects, including those relating to legislative change. The Retirement Funds Administration business delivered a solid result with members under administration increasing to almost 1,5 million at year end. The Umbrella Fund Retirement business recorded strong growth with members under administration growing 35% to over 97 000 at year end. This business is expected to continue to record strong growth into the future. The other main contributors to the strong growth in trading result were: Health Care Consultants and Health Management Solutions; Homeplan, which increased its pension backed lending book by R550 million to R2.1 billion during the year; and Financial Planning Consultants, which benefited from new business written and strong equity markets during the year. International Risk Services The International Risk Services business continued to trade in difficult conditions, including rate reductions experienced in a number of insurance classes particularly in Professional Indemnity insurance. The business also incurred costs in implementing positive changes, defending its market position and hiring new production talent thereby negatively impacting short-term profitability. However, revenue decreased only marginally as a result of the factors mentioned above due to positive underlying growth particularly in the International and Specialist lines. Trading results from operations decreased to GBP1.6 million for the year. Following a thorough review by the new management team led by Stewart McCulloch, and material actions taken thus far, a number of growth and development opportunities are now being actively pursued. Further, the management team has recently been significantly strengthened with the addition of Mike Hammond (former CEO of JLT Risk Solutions) who has recently joined the group as deputy executive chairman of International Risk Services. To optimally position International Risk Services to capitalize on the current market opportunities in its sector, the group and senior management team of the business are currently considering the structural options to best support enhanced growth opportunities. These include the possibility of involving a new private investor in International Risk Services alongside Alexander Forbes. Discussions are being held with a few select investors in this regard and, in the event that this option is pursued, it is likely that Alexander Forbes" shareholding in International Risk Services will reduce. International Financial Services The International Financial Services businesses achieved revenue growth of 24% delivering a trading result of GBP10,3 million up 39% on the previous year. The actuarial consulting business acquired in 2002, Lane Clark & Peacock, recorded exceptional growth in revenue and profits, benefiting from increased demand for its services in the UK and Swiss markets resulting from continuing pensions market turmoil and legislative change. The UK-based pensions IFA (Independent Financial Advisory) business also recorded double digit revenue and profit growth with a strong sales performance in the final quarter of the financial year. The UK-based DC Link Administration business, acquired in 2002, incurred a trading loss but achieved 40% growth in members under administration with members totaling 57 000 at year end. The continuing UK Direct Marketing operation achieved a break even result as a result of marketing spend incurred during the year. The part of the UK Direct Marketing operations which, as previously advised, is in run-off is shown separately from trading results of operations in the income statement. Core earnings per share An adjusted measure of headline earnings per share, core earnings per share, has been presented in order to facilitate a more meaningful assessment of the group"s trading performance. This adjusted measure: * excludes the financial effects caused by the mismatch resulting from accounting for policyholder investments as treasury shares under IFRS (refer SENS release to shareholders of 3 April 2006 and note 6 in this announcement); * excludes the anticipated reduced profit contribution from the UK direct marketing entity in run-off; * excludes one-off exceptional charges and gains, including the provisions for client settlements made in the current year; and * reflects the position had the equity issue associated with the repurchase of exchangeable bonds in September 2004 occurred at the commencement of the previous financial year. (A reconciliation is provided of the calculation of headline and core earnings per share below the abridged income statement contained in this announcement.) Core earnings per share totalled 116 cents for the current year, representing a 3% increase compared to the previous year. As detailed above, growth was adversely impacted by the trading results of International Risk Services. Excluding this business, core earnings per share increased 15%, reflecting the strong trading performance across most of the group"s operations. Proposed distribution to shareholders The overall growth in the group"s core operations, as reflected by the growth in core earnings per share, have enabled the Board to propose a 59 cent per share distribution to shareholders. This represents a 12% decrease compared to the distribution for the previous year, reflecting the reduced profit contribution from International Risk Services and the UK direct marketing entity in run off. The distribution is in line with the previously communicated policy of 2 times dividend cover (based on core earnings per share). Change in directorate As previously announced Rael Gordon has indicated his intention to step down from the position of Group Chief Executive. The board is pleased that he has agreed to remain involved for a period in the management of the international part of the group, which is managed from the UK. The Africa Managing Director, Peter Moyo, has been appointed Group Chief Executive with effect from 1 July 2006. He will continue to be based in Johannesburg. The board is delighted to have an executive of his calibre take over the leadership of the group. Proposed client settlements in respect of historical business practices As previously advised, the group has performed a review in relation to the practice within the South African Financial Services business of bulking of retirement funds" current bank accounts and related business practices. This review included the engagement of lawyers, Deneys Reitz and independent auditors, Ernst & Young. A sub-committee consisting of non-executive directors of the Alexander Forbes Limited Board was appointed to consider the findings of the review and to make recommendations to the Board in this regard. After consultation with the FSB, the first part of this process has been substantially concluded and has resulted in an estimated settlement to clients of R380 million. The wider review is nearing completion; this has identified a limited number of additional potential historical exposures for which a further provision of R100 million has been raised. These amounts have been fully provided in the group"s results for the current year. Importantly, the exposures identified primarily relate to historical practices which do not have a material effect on current earnings. Notwithstanding the strong trading results from most of the group"s operations, this has been one of the most difficult periods in Alexander Forbes" 70 year history with significant issues raised concerning the historic transparency of income earned by our South African Financial Services business. We failed to live up to our history of dedicated client service in this area of our business, which we sincerely regret. We recognise that the proposed settlement to clients represents only the first step in restoring the trust of our clients. The implementation of additional compliance procedures is underway and we have introduced a number of significant changes to ensure transparency in all dealings with our clients. We do not underestimate the task of restoring the trust of our clients and staff, but are fortunate to have a pool of talented people committed to the task of setting the industry standard. Developments Shareholders are referred to the announcement dated 6 June 2006, which provided information regarding the possibility of involving a new private investor in the International Risk Services business alongside Alexander Forbes. The announcement also provided information regarding the receipt of a number of unsolicited approaches from various parties about the possibility of concluding a transaction with the group. Following these approaches, the group has commenced discussions with private equity parties regarding a potential transaction to acquire 100% of the group. The discussions are in an early stage and may or may not result in a transaction. As a result of the potential transactions mentioned above, shareholders are advised to continue to exercise caution when trading in the Alexander Forbes" securities until a further announcement is made. Prospects As reported in this announcement: - the strategic re-positioning of International Risk Services is in process; - all of the other core businesses of the group have delivered a strong trading performance; - significant positive actions have been taken to remedy the historical issues affecting the South African Financial Services business (importantly, the exposures identified primarily relate to historical practices which do not have a material effect on current earnings). This provides the group with a solid platform for moving forward in the new financial year. For and on behalf of the board P L Heinamann Rael Gordon Peter Moyo Non-executive Group chief Group chief Chairman executive executive elect Johannesburg 19 June 2006 Income Statement 31 March 31 March 2006 2005 Rm % Rm Income from operations (note 3) 5 369 11 4 858 Other income 71 107 Operating expenses (5 094) (4 229) Operating profit 346 (53) 736 Analysed as follows: Trading results of operations 791 2 772 Profit from direct marketing entity in run-off 41 68 Consolidation of group cell captive insurance arrangement (1) 23 Impairment and other capital items (19) (21) Exceptional gains and losses (note 4) (466) (106) Operating profit 346 (53) 736 Net interest and investment income (note 5) (5) (63) Net fair value gain (offset by taxation expense attributable to policyholders) 18 9 Effect of accounting for policyholder investments as treasury shares under IFRS (note 6) (81) (30) Share of net profits of associates (note 7) 17 5 Profit before taxation 295 (55) 657 Taxation - Taxation expense (220) (190) - Taxation attributable to policyholders" funds (18) (9) Profit for the year 57 (88) 458 Attributable to: - Ordinary shareholders 12 (97) 413 - Minority interests 45 45 57 (88) 458 EARNINGS PER SHARE (cents) 3 (97) 105 DILUTED EARNINGS PER SHARE (cents) 3 (97) 104 Number of shares (millions) - weighted average 443 394 - diluted weighted average 447 396 Note on calculation of headline and core earnings per share: Profit attributable to ordinary shareholders 12 413 Adjusted for: Impairment charges and other capital items 19 21 Share of headline adjusting items of associates (14) 2 Headline earnings attributable to ordinary shareholders 17 436 Adjusted for: Profit from direct marketing entity in run-off (41) (68) Exceptional gains and losses 466 106 Loss arising from accounting for policyholder investments as treasury shares under IFRS 81 30 Reversal of interest effects of exchangeable bonds - 38 Tax effects on above items 13 (23) Core earnings attributable to ordinary shareholders 536 3 519 Weighted average number of shares 443 394 Adjusted for: Policyholder investments accounted for as treasury shares and deducted from equity under IFRS 19 15 Shares issued to repurchase exchangeable bonds - 51 Adjusted weighted average number of shares in issue 462 460 Headline earnings per share (cents) Effects of adjustments detailed above 4 (96) 111 Profit from direct marketing entity in run-off (6) (12) Exceptional gains and losses 105 19 Accounting for policyholder investments as treasury shares under IFRS 13 3 Repurchase of exchangeable bonds - (8) Core earnings per share (cents) 116 3 113 Segmental Analysis Total income Trading results from operations of operations 31 March 31 March 31 March 31 March 2006 % 2005 2006 % 2005 AFRICA (Rm) Risk & Insurance Services 875 4 842 187 (3) 193 Financial Services 1 125 16 972 219 12 195 Investment Solutions 761 23 617 264 29 204 Total Africa (Rm) 2 761 14 2 431 670 13 592 INTERNATIONAL (GBPm) Risk Services 129,6 (1) 131,5 1,6 (81) 8,5 Financial Services 95,5 24 76,8 10,3 39 7,4 Investment Solutions 5,6 60 3,5 (0,7) (250) (0,2) Total International (GBPm) 230,7 9 211,8 11,2 (29) 15,7 Total International (Rm) 2 608 7 2 427 121 (33) 180 Total Group (Rm) 5 369 11 4 858 791 2 772 Africa International 31 March 31 March 31 March 31 March 2006 2005 2006 2005 Trading results of operations 670 592 121 180 Profit from direct marketing entity in run-off - - 41 68 Consolidation of group cell captive insurance arrangement (1) 10 - 13 Exceptional gains and losses (note 4) (480) - 14 (106) Operating profit before impairment charges 189 602 176 155 Net interest and investment income (4) (13) (1) (50) Net fair value gain 18 9 - - Loss arising from accounting for policy-holder investments as treasury shares under IFRS (81) (30) - - Share of headline profits of associates (2) - 5 7 Headline profit before tax 120 568 180 112 Taxation on headline profit (225) (176) (13) (23) Minority interests (11) (17) (34) (28) Headline earnings attributable to ordinary shareholders (116) 375 133 61 Adjusted for: Profit from direct marketing entity in run-off - - (41) (68) Exceptional gains and losses 480 - (14) 106 Loss arising from accounting for policyholder investments as treasury shares under IFRS 81 30 - - Reversal of interest effects of exchangeable bonds - - - 38 Tax effects on above items - - 13 (24) Core earnings attributable to ordinary shareholders 445 405 91 113 Total (Segmental continued) 31 March 31 March 2006 2005 Trading results of operations 791 772 Profit from direct marketing entity in run-off 41 68 Consolidation of group cell captive insurance arrangement (1) 23 Exceptional gains and losses (note 4) (466) (106) Operating profit before impairment charges 365 757 Net interest and investment income (5) (63) Net fair value gain 18 9 Loss arising from accounting for policy-holder investments as treasury shares under IFRS (81) (30) Share of headline profits of associates 3 7 Headline profit before tax 300 680 Taxation on headline profit (238) (199) Minority interests (45) (45) Headline earnings attributable to ordinary shareholders 17 436 Adjusted for: Profit from direct marketing entity in run-off (41) (68) Exceptional gains and losses 466 106 Loss arising from accounting for policyholder investments as treasury shares under IFRS 81 30 Reversal of interest effects of exchangeable bonds - 38 Tax effects on above items 13 (23) Core earnings attributable to ordinary shareholders 536 519 Balance Sheet 31 March 31 March 2006 2005 Rm Rm ASSETS Financial assets held under multi-manager investment contracts 118 373 85 518 Financial assets held under cell captive insurance facilities 4 729 3 638 Housing loans secured by retirement fund assets 750 - Property and equipment 222 267 Purchased and developed computer software 29 24 Goodwill 2 091 2 154 Other intangible assets 48 39 Investments in associates 68 66 Deferred tax assets 257 253 Financial assets 367 305 Trade and other receivables 1 303 1 509 Cash and cash equivalents 2 803 2 628 Total assets 131 040 96 401 EQUITY Ordinary shareholders" equity 1 531 1 995 Minority interests 82 102 Total equity 1 613 2 097 LIABILITIES Financial liabilties held under multi-manager investment contracts 118 619 85 691 Liabilities of cell captive insurance facilities 4 729 3 638 Securitisation funding for housing loans 750 - Borrowings 678 760 Retirement benefit obligations 236 308 Deferred tax liabilities 95 55 Deferred consideration for acquisitions 191 187 Provisions 593 146 Other liabilities 3 536 3 519 Total liabilities 129 427 94 304 Total equity and liabilities 131 040 96 401 Total equity per above 1 613 2 097 Adjustment for policyholder investments accounted for as treasury shares and deducted from equity under IFRS 184 161 Adjusted total equity 1 797 2 258 Number of shares in issue 443 394 Adjustment for policyholder investments accounted for as treasury shares and deducted from equity under IFRS 19 15 Adjusted number of shares in issue 462 409 Net asset value per share (cents) 364 532 Adjustment for policyholder investments accounted for as treasury shares and deducted from equity under IFRS 25 20 Adjusted net asset value per share (cents) 389 552 Statement of Changes in Equity Treasury Share share capital and and share share option Other premium reserve reserves Rm Rm Rm 31 March 2004 As previously reported 86 162 892 Amended for adoption of IFRS - (151) (400) Restated at 31 March 2004 86 11 492 Share issues 1 175 Movement in share option reserve 9 (17) 37 Treasury shares purchased (12) Movement in policyholder investments accounted for as treasury shares under IFRS (10) Foreign currency translation and other movements 32 Profit for the year 413 Distribution to shareholders (221) Movement in minority interests At 31 March 2005 1 270 (28) 753 Share issues 1 Movement in share option reserve 76 (91) 23 Treasury shares purchased (49) Movement in policyholder investments accounted for as treasury shares under IFRS (23) Foreign currency translation and other movements (115) Profit for the year 12 Distribution to shareholders (298) Movement in minority interests At 31 March 2006 1 049 (191) 673 Statement of Changes in Equity (continued) Ordinary share- holders" Minority Total equity interests equity Rm Rm Rm 31 March 2004 As previously reported 1 140 107 1 247 Amended for adoption of IFRS (551) (30) (581) Restated at 31 March 2004 589 77 666 Share issues 1 175 1 175 Movement in share option reserve 29 29 Treasury shares purchased (12) (12) Movement in policyholder investments accounted for as treasury shares under IFRS (10) (10) Foreign currency translation and other movements 32 2 34 Profit for the year 413 45 458 Distribution to shareholders (221) (46) (267) Movement in minority interests - 24 24 At 31 March 2005 1 995 102 2 097 Share issues 1 1 Movement in share option reserve 8 8 Treasury shares purchased (49) (49) Movement in policyholder investments accounted for as treasury shares under IFRS (23) (23) Foreign currency translation and other movements (115) (6) (121) Profit for the year 12 45 57 Distribution to shareholders (298) (52) (350) Movement in minority interests - (7) (7) At 31 March 2006 1 531 82 1 613 Cash Flow Statement 31 March 31 March 2006 2005 Rm Rm Cash from trading operations 958 931 Cash from direct marketing entity in run-off 41 68 Movement in working capital and insurance balances 243 76 Taxation and dividend payments (449) (466) Cash from operating activities 793 609 Net subsidiaries and businesses acquired (64) (72) Housing loans provided to clients secured by retirement fund assets (750) - Capital expenditure for the year (92) (132) Net movement in financial assets (25) 6 Cash from investing activities (931) (198) Net proceeds of share issues/treasury shares purchased (48) 1 163 Equity deduction resulting from accounting for treasury shares under IFRS (23) (10) Net borrowings repaid (68) (1 373) Securitisation funding raised for housing loans 750 - Withdrawal of matching deposit - 227 Premium finance receivables (24) (25) Cash settlement of retirement obligations (82) (59) Distributions to minority shareholders (52) (46) Cash from financing activities 453 (123) Net cash flows 315 288 Foreign subsidiary translation adjustment (140) (16) Net movement in cash balances 175 272 Notes 1. Basis of preparation The abridged financial information has been prepared in accordance with, and complies with International Financial Reporting Standards ("IFRS") and the South African Companies Act of 1973, as amended. The accounting policies are consistent with those applied in the 2005 financial year except for the changes resulting from the adoption of IFRS. Details relating to these changes were presented with the group"s interim results announcement published on 14 November 2005. An additional announcement with regards to policyholder investments accounted for as treasury shares under IFRS was issued on 3 April 2006. 31 March 31 March 2006 2005 2. Exchange rates The income statements and balance sheets of foreign subsidiaries have been translated to Rands as follows: Weighted average R: GBP rate 11,3 11,5 Closing R: GBP rate 10,8 11,7 31 March 31 March 2006 2005 Rm Rm 3. Income from operations Fee and commission income 5 076 4 622 Operational interest income from insurance broking activities 63 64 Interest and other finance income from financing operations 111 63 Less: Directly related interest expense (33) - Net premium and investment income from insurance operations 622 386 Less: Net claims and transfers to policyholders" funds (470) (277) Total income from operations 5 369 4 858 4. Exceptional gains and losses Non-recurring restructuring costs (International Risk Services) 14 (111) Non-trading currency gain - 5 Proposed client settlements for historical bulking practices (380) - Provision for additional potential historical exposures (100) - Total exceptional gains and losses (466) (106) 5. Net interest and investment income Interest income 70 48 Dividend income from preference share investments 17 6 Total interest and investment income 87 54 Finance costs - bank borrowings (52) (57) Finance costs - exchangeable bonds - (40) Other finance costs (40) (20) Total net interest and investment income (5) (63) 6. Effects of accounting for policyholder investments as treasury shares under IFRS Increase in value of shares held on behalf of policyholders (69) (20) Dividends received on shares held on behalf of policyholders (12) (10) Total effects (81) (30) As advised to shareholders in the SENS statement of 3 April 2006, the IFRS requirement to account for Alexander Forbes shares held on behalf of policyholders as treasury shares results in a mismatch in accounting for the asset and liability movement, which does not reflect the economic substance of the transactions. As shown above, this mismatch has resulted in the reporting of a R81 million accounting expense in the current year (2005: R30 million expense),whereas no actual economic loss will ever be realised by the group. Adjusted measures of headline earnings per share (referred to as core earnings per share) and net asset value per share,which exclude the effects of accounting for policyholder investments as treasury shares, have been presented in order to accurately reflect the underlying economic substance of the transactions and provide meaningful reporting to shareholders. 7. Investment in associates Carrying value in balance sheet 68 66 Directors" valuation of associates 99 102 8. Capital expenditure and commitments Depreciation and amortisation for the year 113 122 Capital expenditure for the year 92 132 Operating lease commitments - Due within one year 190 213 - Thereafter 976 1 204 1 166 1 417 Capital expenditure and commitments will be funded from internal cash resources. 9. Distribution to shareholders The directors have recommended a distribution to shareholders of 59 cents per share by way of a reduction in share premium for the year ended 31 March 2006. The terms and conditions of the capital reduction are subject to specific approval by the shareholders at the forthcoming annual general meeting, to be held on 8 August 2006. In compliance with the requirements of STRATE, the following dates are applicable: Last date to trade cum the distribution Friday, 25 August 2006 Date trading commences ex the distribution Monday, 28 August 2006 Record date Friday, 1 September 2006 Date of payment Monday, 4 September 2006 Shares may not be dematerialised or rematerialised between Monday, 28 August 2006 and Friday, 1 September 2006 both days inclusive. Review Report Our auditors PricewaterhouseCoopers Inc, have reviewed the abridged financial information in this report for the year ended 31 March 2006. A copy of their unqualified review report is available on request. Directors: P L Heinamann (Chairman), J V H Robins (Deputy chairman) (British), R I Gordon (Group chief executive), M P Moyo (Group chief executive elect), M G Ilsley (Group finance director), J H Vickers (Group development director), T R T Bohlmann, J J Durand, W E Lucas-Bull, M P Nicholls (British), M C Ramaphosa, A F van Biljon, P J J van der Walt, G J Roberts-Baxter (Alternate director). Company secretary: J E Salvado. Registered office: South Africa Alexander Forbes Place, 61 Katherine Street, Sandown Telephone +27 (0) 11 269-0000. Fax +27 (0) 11 269-1111. E-mail: [email protected]. Website: www.alexanderforbes.co.za United Kingdom Alexander Forbes House, 6 Bevis Marks, London EC3A 7AF, United Kingdom Switchboard +44 (0) 20 7933-0000. Fax +44 (0) 20 7933-0915 Sponsors: J.P. Morgan Equities Limited. 1 Fricker Road, Illovo Boulevard, Johannesburg Investec Bank Limited. 100 Grayston Drive, Sandown Independent auditors: PricewaterhouseCoopers Inc. Chartered Accountants (SA) 2 Eglin Road, Sunninghill Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited. Ground Floor, 70 Marshall Street, Johannesburg PO Box 61051, Marshalltown, 2107 Investor relations: Debbie Kotzen For more information and full details of the SENS announcement, please visit our website: www.alexanderforbes.co.za Date: 20/06/2006 07:45:20 AM Produced by the JSE SENS Department
2006-06-19
Media Alert: Top Summer Survival Tips for Stinging Insect
PR Newswire (press release), NY -
Verus Pharmaceuticals cautions you that statements included in this media alert that are not a description of historical facts may be forward-looking statements. The inclusion of forward-looking statements should not be regarded as a representation by Verus that any of its plans will be achieved. Actual results may differ materially from those set forth in this media alert due to the risks and uncertainties inherent in Verus' business including, without limitation, statements about: its ability to identify appropriate acquisition, licensing, or co-development and/or promotion candidates in the future or be able to take advantage of the opportunities it identifies; difficulties or delays in developing, obtaining regulatory approval, manufacturing and commercializing its products; unexpected performance or side effects of its products that could delay or prevent development or commercialization, or that could result in recalls or product liability claims; the scope and validity of patent protection for its products; competition from other pharmaceutical companies; and its ability to obtain additional financing to support its operations.
2006-06-18
Which Side Are You On?
uruknet.info, Italy -
To build public support for regime change, the public relations apparatus of the US ruling class has been pressed into service to demonize Iran�s current president, and the program has followed the well-worn path of depicting the leaders of target regimes as new Hitlers. PR firms, financed and directed by the same ruling class that has an interest in regime change, cobble together ridiculous stories to be broadcast by the mass media. One story, entirely apocryphal, claimed the Ahmadinejad government had prepared legislation along the lines of the Nazi�s Nuremberg laws. The story, accompanied by an arresting photograph of a Jewish businessman wearing a yellow star, culled from an historical archive on Nazi Germany, ran on the front page of Canada�s The National Post. Other media outlets cast all restraint aside, stooping to absurd levels of hyperbole, to calumniate the Iranian president as an anti-Semitic fanatic intent on annihilating Israel by launching a barrage of nuclear missiles. While this carries on the practice, in the extreme, of discrediting opposition to the expulsion of Palestinians and the denial of their right of return by smearing opponents as vicious anti-Semites, it also serves to invest agitation for war against Iran with a certain anti-racist, progressive flavor, allowing the soft left to rationalize its backing of imperialism as inspired by hatred of racism and the misogynistic practices of conservative Islam. It also creates an air of intimidation, discouraging anyone from daring to speaking favorably of Ahmadinejad for fear they�ll be accused of acting as an apologist for whatever heinous crimes he stands accused of at the moment. Those with courage will say, without equivocation, that Ahmadinejad�s championing of economic justice at home and political justice for Palestinians is admirable and that Iran�s struggle against foreign intimidation is progressive in its anti-imperialism and deserves our unqualified support. US-engineered regime change in favor of a pro-imperialist government in Tehran is neither in the interest of Iranians nor of the ordinary people of the countries whose governments seek this outcome.
2006-06-16
Health care report urges dialogue on reform
USA Today -
At most of the town hall meetings, including a March meeting in Los Angeles covered by USA TODAY, the majority of participants called for a health system in which everyone is covered, generally with a wide-ranging set of health services, including medical, dental and vision care. Significant, but smaller percentages, of participants wanted a so-called single payer system in which the government finances health care through taxes, as in Canada and much of Europe. Others wanted to keep the current employer-based system of health insurance.
2006-06-15
The Bloomberg Enlightenment, Cont.
New York Observer, NY -
"We're working together to toughen local penalties for sale and possession of illegal guns, to share "best practices" in enforcement, and also to oppose wrong-headed Federal legislation that would protect gun traffickers and the rogue gun dealers who supply them. In fact, more effective Federal action is needed on a broad range of issues. Our Federal system of government rightly assigns the primary responsibility for public health at the state and local level. We wouldn't have it any other way. But in meeting the challenges of chronic disease and illegal firearms, we also need our partners at the Federal level to step up to the plate. Federal law should make it easier, not harder, to choke off the interstate transport of illegal firearms.
2006-06-14
Privatizing Foreign Policy
???? -
Nothing came of the year 2000's mutual statements that good relations were to be desired. Prior to 2000 the US Congress, working under the assumption that Iran was involved in the June 1996 Khobar truck bombing, and also at the urging of special interest groups that included the Zionist and expatriate Iranian lobbies, had passed an array of anti-Iranian bills. The most notable of these was the August 1996 Iran-Libya Sanctions Act. In the same March talk in which Albright admitted mistakes in past US policy toward Iran, she explained that this sanctions bill aimed at two objectives. One was a desire to prevent Iran from developing nuclear technology. It is to be noted that during Khatami's tenure the Iranian government had at least worked hard to improve transparency in its effort to develop nuclear energy. The other US goal was to get Iran to stop �financing and supporting terrorist groups, including those violently opposed to the Middle East peace process.�[36] This latter goal was a long-standing US demand and referred specifically to Iran's support for Israel's enemies, Hezbollah and Hamas. In other words, Iranian cooperation on issues that a objective observer might see as reflecting American national interest � cooperation in Afghanistan, keeping the Shiite population of Iraq from open rebellion, mutual agreement on the price and dispersal of oil supplies, and even some incremental movement in terms of the nuclear issue � was not sufficient for the establishing of normal relations with the United States. Indeed, shortly after supporting the US ouster of the Taliban regime, the Bush administration labeled Iran a member of the �Axis of Evil.� The behavior that seems to have assured Iran's estrangement from the US was its failure to satisfy the needs of a special interest lobby within the US which had managed to privatize the nation's foreign policy on the Arab-Israeli conflict. That same special interest had so distorted how American leaders defined �peace process� that the vast majority of people in the Middle East, including Iran, saw it as something wholly pro-Israel and unjust to the Palestinians.
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