TIDMGAH
RNS Number : 3851L
Gable Holdings Inc
30 September 2016
30 September 2016
Gable Holdings Inc.
("Gable" "the Company" or "the Group")
Unaudited Half Year Results for the six month period ended 30
June 2016
Gable (AIM: GAH), the European non-life insurance company,
announces results for the six month period ended 30 June 2016.
Summary of Results
6 Months ended Year ended
30 June 31 December
--------------------- ----------------- --------------------
2016 2015 2015
GBPm GBPm GBPm
--------------------- -------- ------- --------------------
Gross Written
Premiums 61.7 51.7 91.1
--------------------- -------- ------- --------------------
Net Earned Premiums 31.4 38.5 59.7
--------------------- -------- ------- --------------------
Profit / (loss)
on constant
currency basis 1.1 2.6 (15.9)
--------------------- -------- ------- --------------------
EPS on constant
currency basis 0.76 1.92p (11.75)p
--------------------- -------- ------- --------------------
Profit / (loss) on constant currency basis for 2016 is stated
after adding back the effect of foreign exchange losses of GBP3.4m
(H1 2015: GBP1.2m, Full year 2015 GBP0.9m).
Business in the Half Year
-- Written premiums GBP61.7 million (2015: GBP51.7 million)
-- Profitable underwriting on constant currency basis
-- Cash and short term investments GBP73.9 million (2015:
GBP40.0 million)
Outlook - Strategic Restructuring Plan
-- Excellent progress with the provision of alternative capacity
for the group's book of business
-- Considerable progress has ensured that running costs are at
minimum sustainable level with a view to creating a lean business
available for recapitalisation
William Dewsall, Chief Executive, Gable Holdings Inc,
commented:
"I am pleased that the first half of 2016 returned to profit on
a constant currency basis. The impact of the introduction of
Solvency II on small insurance companies such as Gable has been
devastating. The legislation has met widespread criticism, and
justifiably so. I have made good progress on my undertaking to find
alternative capacity for our policyholders and I expect to make an
announcement very soon. In the meantime we are preparing for an
orderly management of the historical book and to restructure the
company so that it is in a suitable form for recapitalisation."
Gable Holdings Inc. Tel: +44(0) 20 7337 7460
William Dewsall, Chief
Executive
Michael Hirschfield, Group
Finance Director
John Bick
Haggie Partners LLP Tel : +44(0) 20 7562 4444
Peter Rigby
About Gable Holdings Inc.
Gable is a European non-life insurance company underwriting a
comprehensive range of specialist policies for the commercial
sectors in the UK, Denmark, France, Germany, Italy, Norway, Spain
and Sweden. Gable benefits from a low-cost online underwriting
platform and the Company has continued to successfully grow its
business geographically whilst simultaneously exploiting a range of
niche insurance segments which exist across the EU, which is
delivered through the EU passporting mechanism. Gable Holdings Inc
is quoted on the London Stock
Exchange's AIM market. For further information please visit www.gableholdings.com.
Interim Statement 2016
Overview and results
Gable's results for the six-month period ended 30 June 2016 are
as follows with gross written premium at GBP61.7 million (H1 2015:
GBP51.7 million). Net earned premiums (earned income attributable
to the Company) amounted to GBP31.4 million (H1 2015: GBP38.5
million) resulting in the insurance business returning to profit on
a constant currency basis of GBP1.4 million (H1 2015: GBP2.6
million and full year 2015 Loss: GBP15.4 million). Where possible
we maintain foreign currency assets to match relevant liabilities
to minimise the ultimate exposure when settling non-Sterling
claims. The impact on Sterling following the Brexit vote has led to
a non-cash foreign exchange charge of GBP3.4 million giving a
reported loss for the period of GBP2.3 million at the Group
level.
At the end of the period cash balances and equivalents were
GBP73.9 million (H1 2015: GBP40.0 million, 31 December 2015:
GBP61.6 million).
During the period the Group continued to focus on delivering
growth through leveraging its strong working relationships with
selected brokers and broker networks to provide well priced bespoke
insurance products to the commercial SME markets in Europe.
This period has been one of significant change for the business,
the introduction of Solvency II on 1 January 2016 effectively
rendered Gable's historic business model obsolete. Whilst a risk
based approach such as that which forms the basis of Solvency II is
supported by the Board, the method of implementing the rules under
the Solvency II regime effectively requires small niche operations
to hold excessive levels of capital. Gable estimates that it would
need to hold a capital to GWP ratio of nearly one to one whereas an
identical book of business as part of a wider, more diversified
portfolio, within a major carrier would require a ratio of less
than 30%. We announced that it would not be possible to raise the
capital necessary to support the historical business model and
ceased writing new business on 14 July 2016.
Outlook
On 15 July 2015 Gable announced that it had developed a
strategic restructuring plan which included the provision of
alternative capacity for the group's book of business as it falls
due for renewal. I have made good progress on this and I am
confident that an announcement will be made on this matter very
shortly. In the meantime, we are preparing details plans to ensure
the orderly management of the historical book and have entered into
discussions with third party experts to provide independent
oversight and technical administration assistance to the
process.
Our plan includes a comprehensive review of the overhead cost
base to ensure that running costs are cut back to a minimum
sustainable level with a view to creating a lean business available
for recapitalisation. Our Chairman and all non-executive directors
have stood down from the Board and I should like to thank Jost
Pilgrim, Blaise Craven, Andrew Trott, Julian Connerty and Kevin
Alcock for their contributions during their tenure on the Board. On
12 September 2016 our Nomad, Zeus, resigned which has triggered a
delisting process and, whilst we continue to explore the
possibility of securing a replacement, if a nomad is not appointed
by 13 October 2016, the Company's listing on AIM will be cancelled.
The economic rights of shareholders are unchanged by this process
which will result in a considerable cost saving as the maintenance
of a listing was estimated to cost some GBP640,000 per year.
I shall continue to keep shareholders informed of developments
over the coming period.
William Dewsall
Chief Executive
30 September 2016
GABLE HOLDINGS INC
Group Income Statement
For the six months ended 30 June 2016
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Notes GBP000s GBP000s GBP000s
unaudited unaudited audited
Gross written premiums 61,717 51,668 91,128
Change in provision
for gross unearned premiums 5 (21,276) (8,793) (18,534)
-------------------------------- ------ ----------- ----------- ------------
Gross earned premiums 40,441 42,875 72,594
Outward reinsurance
premiums (5,252) (4,052) (25,088)
Change in provision
for unearned
premiums - reinsurers'
share 5 (3,760) (328) 12,175
-------------------------------- ------ ----------- ----------- ------------
Net earned premiums 31,429 38,495 59,681
Net investment return (378) 118 673
Total revenue from operations 31,051 38,613 60,354
Gross claims paid 5 (24,523) (11,388) (34,175)
Movement in gross technical
provisions (5,874) (10,855) (30,467)
-------------------------------- ------ ----------- ----------- ------------
Gross claims incurred (30,397) (22,243) (64,642)
Reinsurers' share of
gross claims paid 295 308 171
Movement in reinsurers'
share of technical provisions 8,426 - 14,293
-------------------------------- ------ ----------- ----------- ------------
Reinsurers share of
claims incurred 8,721 308 14,464
Net claims incurred (21,676) (21,935) (50,178)
Expenses incurred in
insurance activities (11,157) (10,504) (24,072)
Other operating expenses
- overheads (540) (8,567) (6,110)
Total operating charges
(excluding impairment (11,697) (19,071) (30,182)
charges)
Impairment charges - - (4,250)
Loss from operations
and before taxation (2,322) (2,393) (24,256)
Taxation (30) (21) 47
-------------------------------- ------ ----------- ----------- ------------
Loss for the period
attributable
to owners of the parent 6 (2,352) (2,414) (24,209)
-------------------------------- ------ ----------- ----------- ------------
Earnings per share - 4 (1.74)p (1.78)p (17.89)p
basic
Earnings per share - 4 (1.74)p (1.78)p (17.89)p
diluted
All operations are continuing.
GABLE HOLDINGS INC
Group Statement of Financial Position
At 30 June 2016
30 June 30 June 31 December
2016 2015 2015
Notes GBP000s GBP000s GBP000s
unaudited unaudited audited
Assets
Intangible assets - 4,250 -
Property, plant and
equipment 418 396 444
Deferred acquisition
and reinsurance costs 5 21,303 14,883 16,231
Provision for unearned
reinsurance premium 5 11,437 2,694 15,197
Reinsurers' share of
technical provisions 5 22,100 3,200 17,452
Prepayments and accrued
income 1,163 573 659
Trade and other receivables 72,172 89,684 61,944
Cash and cash equivalents 8 73,925 39,999 61,609
----------------------------- ------ ---------- ---------- ------------
Total assets 202,518 155,679 173,536
----------------------------- ------ ---------- ---------- ------------
Equity
Share capital 338 338 338
Share premium account 16,190 16,190 16,190
Share based premium
reserve 876 1,049 876
Other reserves 3,875 3,875 3,875
Retained earnings (20,605) 3,542 (18,253)
----------------------------- ------ ---------- ---------- ------------
Total equity attributable
to owners of the parent 6 674 24,994 3,026
Liabilities
Technical provisions 5 163,593 107,833 136,511
Reinsurers' share of
deferred acquisition
costs 1,257 - 2,776
Accruals and deferred
income 244 384 244
Current taxation 110 342 292
Deferred taxation 221 41 41
Loan notes and derivatives 4,011 - 3,966
Trade and other payables 32,408 22,085 26,680
----------------------------- ------ ---------- ---------- ------------
Total liabilities 201,844 130,685 170,510
Total liabilities and
shareholders' funds 202,518 155,679 173,536
----------------------------- ------ ---------- ---------- ------------
Net asset value per
ordinary share 4 0.50p 18.47p 2.24p
GABLE HOLDINGS INC
Group Statement of Cash Flows
For the six months ended 30 June 2016
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Notes GBP000s GBP000s GBP000s
unaudited unaudited audited
Cash flows from operating
activities
Cash flows from operations 7 12,762 5,938 14,904
Interest received (378) 24 673
Tax paid (31) (310) (162)
Net cash flows from
operating activities 12,353 5,652 15,415
Cash flows from investing
activities
Purchase of tangible
fixed assets (33) (44) (125)
------------------------------- ------ ----------- ----------- ------------
Net cash flows from
investing activities (33) (44) (125)
Cash flows from financing
activities
Shares issued - 335 -
Share issue costs
Loan notes issued net - - -
of costs - - 3,966
Net cash flows from
financing activities - 335 3,966
Net (decrease)/increase
in cash and cash equivalents 8 12,320 5,943 19,256
Cash and cash equivalents
at period beginning 61,609 27,021 42,358
Exchange movements on
cash and cash equivalents (4) 9 (5)
Cash and cash equivalents
at period end 8 73,925 32,973 61,609
------------------------------- ------ ----------- ----------- ------------
GABLE HOLDINGS INC
Notes to the Interim Consolidated Financial Statements
For the six months ended 30 June 2016
1. Basis of preparation
The Company was incorporated as a Corporation in the Cayman
Islands which does not prescribe the adoption of any particular
accounting framework. These interim financial statements have been
prepared under the historical cost convention and in accordance
with the requirements of International Financial Reporting
Standards ("IFRS") endorsed by the European Union, in so far as
they apply to interim statements.
The Group financial statements consolidate the financial
statements of Gable Holdings Inc and subsidiary undertakings made
up to 30 June 2016.
2. Accounting policies
There have been no changes to the Group's accounting policies as
set out in the Group's financial statements for the year ended 31
December 2015 and, as such, those accounting policies have been
applied to these interim statements.
3. Segmental information
The Group's business is the provision of insurance products and
it has, in the six months to 30 June 2016, derived its business
from the United Kingdom, France, Spain, Norway, Denmark, Germany
and Italy.
4. Earnings and net asset value per share
The calculation of basic and diluted earnings per share is based
on the net loss after tax of GBP2,352,000 (six months ended 30 June
2015: loss of GBP2,414,000, full year ended 31 December 2015: loss
of GBP24,209,000) divided by the weighted average number of shares
in issue during the period of 135,319,833 (six months ended 30 June
2015: 135,319,833, full year ended 31 December 2015:
135,319,833
The net asset value per share is calculated by dividing the
total equity of GBP674,000 (30 June 2015: GBP24,994,000, 31
December 2015: GBP3,026,000) by the number of shares in issue at
the end of the period - 135,319,833 (30 June 2015: 135,319,833, 31
December 2015: 135,319,833).
5. Insurance assets and liabilities
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
GBP000s GBP000s GBP000s
unaudited unaudited audited
Insurance assets
Deferred acquisition
and reinsurance costs 21,303 14,883 16,231
Provision for unearned
reinsurance premium 11,437 2,694 15,197
Reinsurers' share of
technical provisions 22.100 3,200 17,452
-------------------------------- ----------- ----------- ------------
54,840 20,777 48,880
-------------------------------- ----------- ----------- ------------
Insurance liabilities
Technical provisions 76,475 51,733 70,670
Provisions for unearned
premium 87,118 56,100 65,841
Reinsurers' share of
deferred acquisition
costs 1,257 - 2,776
-------------------------------- ----------- ----------- ------------
164,850 107,833 139,287
-------------------------------- ----------- ----------- ------------
Claims reserved
At 1 January 53,218 37,485 37,485
Claims notified and reserved
in the period, net of
RI 34,078 19,143 37,924
Claims paid in the year
net of reinsurance recoveries (24,228) (11,080) (34,004)
Incurred but not reported
movement in the period,
net of reinsurers' share (12,030) 3,023 11,850
Exchange movement 3,337 (38) (37)
-------------------------------- ----------- ----------- ------------
At 30 June/31 December 54,375 48,533 53,218
-------------------------------- ----------- ----------- ------------
Movement for provision
in unearned premium
At 1 January 65,841 47,307 47,307
Movement in provision
for the period 21,276 8,793 18,534
At 30 June/31 December 87,117 56,100 65,841
-------------------------------- ----------- ----------- ------------
Movement in provision
for unearned reinsurance
premium
At 1 January 15.197 3,022 3,022
Movement in provision
for the period (3,760) (328) 12,175
-------------------------------- ----------- ----------- ------------
At 30 June/31 December 11,437 2,694 15,197
-------------------------------- ----------- ----------- ------------
Movement in deferred
acquisition costs
At 1 January 16,231 13,153 13,153
Movement in provision
for the period 5,072 1,730 3,077
-------------------------------- ----------- ----------- ------------
At 30 June/31 December 21,303 14,883 16,231
-------------------------------- ----------- ----------- ------------
Movement in reinsurers'
share of technical provisions
At 1 January 17,452 3,200 3,200
Movement in provision
for the period 5,149 - 14,293
Exchange movement (501) - (41)
-------------------------------- ------- ------ -------
At 30 June/31 December 22,100 3,200 17,452
-------------------------------- ------- ------ -------
Movement in reinsurers'
share of deferred acquisition
costs
At 1 January 2.776 - -
Movement in provision
for the period (1,519) - 2,776
At 30 June/31 December 1,257 - 2,776
-------------------------------- -------- ------
6. Reconciliation of movements in shareholders' funds
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
GBP000s GBP000s GBP000s
unaudited unaudited audited
(Loss)/profit for the
period (2,352) (2,414) (24,209)
Shares issued in the - - -
year
Share issue costs - - -
Share based payment charge - 99 (74)
Net increase in shareholders'
funds (2,352) (2,315) (24,283)
Equity shareholders'
funds brought forward 3,026 27,309 27,309
------------------------------- ----------- ----------- ------------
Equity shareholders'
funds carried forward 674 24,994 3,026
------------------------------- ----------- ----------- ------------
7. Reconciliation of profit for the period before taxation to
net cash flows from operating activities
Six months Six months Year
ended ended Ended
30 June 30 June 31 December
2016 2015 2015
GBP000s GBP000s GBP000s
unaudited unaudited Audited
(Loss)/profit for the
period before taxation (2,322) (2,393) (24,256)
Interest received 378 (118) (673)
Non-cash exchange movements 1 1 -
Depreciation of property,
plant and equipment 63 60 122
Amortisation of derivatives 45 - 6
Share based payment charge - 99 (74)
Impairment of goodwill - - 4,250
Increase in insurance
liabilities 27,081 19,841 48,519
Increase in reinsurers'
share of technical provisions (4,648) - (14,252)
Increase/(decrease) in
deferred acquisition
and reinsurance costs (5,072) (1,730) (3,078)
Increase in reinsurers'
share of deferred acquisition
costs (1,519) - 2,776
Decrease/(increase) in
provision for unearned
reinsurance premium 3,760 328 (12,175)
Increase in receivables (10,732) (23,757) 3,897
Increase in payables 5,727 5,387 9,842
Net cash flows from operating
activities 12,762 (2,282) 14,904
--------------------------------- ----------- ----------- ------------
8. Reconciliation of net cash flows to movement in net funds
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
GBP000s GBP000s GBP000s
unaudited unaudited audited
Change in cash for the
period 12,320 (2,359) 19,256
------------------------------- ----------- ----------- ------------
Change in net funds resulting
from cash flows 12,320 (2,359) 19,256
Net funds brought forward 61,609 42,358 42,358
Exchange movements on
cash and cash equivalents (4) - (5)
------------------------------- ----------- ----------- ------------
Net funds carried forward 73,925 39,999 61,609
------------------------------- ----------- ----------- ------------
9. General information
The information for the period ended 30 June 2016 does not
constitute statutory accounts as defined in the Companies Act 2006.
The figures for the period ended 31 December 2015 have been
extracted from the 2015 Financial Statements prepared under IFRS.
The auditors' report on those accounts was unqualified and did not
contain a statement under the provisions of the Companies Act
2006.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFFVASIIVIR
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