Source - RNS
RNS Number : 4568K
Pro Global Insurance Solutions PLC
21 September 2016
 

Half Yearly Report

 

Pro Global Insurance Solutions PLC 

21 September 2016

 

Pro Global Insurance Solutions plc

Unaudited interim results for the six months ended 30 June 2016

Pro Global Insurance Solutions plc (the "Company" or "Pro") today announces unaudited interim results for the six months ended 30 June 2016.

Pro is a specialist outsourcing and consulting service provider to the global insurance and reinsurance industry.

Highlights of interim results

•       Delivery of "Client First" strategy on track

•       An increase of 8% in revenue over the same period in 2015

•       Growth in net margin to 6% compared to the 3% for the same period in 2015.

 

 

 

 6 months

 

 6 months

 

 

 

 30 Jun 2016

 

 30 Jun 2015

 

 

 

 (unaudited)

 

 (unaudited)

 

 

 

 

 

 

 

 

 

 £000's

 

 £000's

Revenue from Core business

 

 

13,322

 

12,305

Gross Profit

 

 

5,620

 

5,443

Operating Profit

 

 

79

 

90

Consolidated Profit before taxation

 

 

768

 

377

 

During first half of 2016 revenues grew by 8% on the comparable period last year.   Pro has been successful in attracting new revenues across all products groups which have replaced the naturally declining legacy revenues from existing contracts.  Pro has invested in revenue-generating capabilities in anticipation of further growth during the second half of the year.  This resulted in gross profit growth by 3%, slightly behind the revenues.  The operating overheads were maintained virtually flat as savings in support functions are reinvested in business development.

Pro is continuing to develop its US platform where we see a vast market for Pro's service proposition.  The client base in the US is growing comprising both, London Market insurers operating in the US, as well as local specialist insurers and reinsurers.  Current delivery focuses on technical outsourcing and operational consulting services, while the team is also working on launching a new legacy solutions strategy in the US market,

Pro continues to be well positioned to capture opportunities created by ongoing change in the global insurance and reinsurance markets, driven by regulatory, capital, pricing pressures and now Brexit in the UK. 

 

Pro also announced the appointment of Andrew Donnelly to the Board of Pro Global Insurance Solutions as Finance Director, effective 1st September 2016. Andrew has carried out the role of Chief Financial Officer since September 2015, prior to which Andrew held the position within the Company of Group Financial Controller.

Artur Niemczewski, CEO of Pro Global Insurance Solutions Plc, commented: "During first half of 2016 the Pro team continued to make steady progress in delivering the Client First strategy, developing and strengthening client relationships across all four business lines.  The progress made is a testament to the commitment and dedication of the Pro team as well as tremendous support from Pro's clients"

 

Enquiries:

Artur Niemczewski, Chief Executive Officer, Pro Global Insurance Solutions plc

020 7068 8123  

Guy Wiehahn, Peel Hunt (nominated adviser and broker)

020 7418 8900

 

 

 

 

 

__________________________________________________________________________

 

Notes to Editors

About Pro plc

Pro plc is a specialist in the provision of operational outsourcing and consulting services, focusing solely on the global insurance and reinsurance industry.  Our mission is to create value for our clients at each stage of their operations, by enabling them to focus on what they do best and helping them improve their operations. Our core purpose is to be the trusted delivery partner for the operations that matter to our clients.

Pro plc operates across the entire spectrum of client needs, from market entry to exit; from live to legacy business.  We are best known for our ability to manage the operations that matter most to our clients and have been involved with some of the biggest and most complex assignments in the market. Examples include a cost reduction programme for a global reinsurer through centralisation of its operations from 15 to 2 locations and the management of over 25 legacy portfolios with collective liabilities in excess of $5bn.

 We add value in four main areas:

•  Risk, Audit and Compliance: internal and external audits including peer reviews and cover holder audits; providing risk management and compliance frameworks to ensure compliance within a changing regulatory environment

•  Operational consulting: helping improve the efficiency and effectiveness of client operations and manage major change

•  Technical outsourcing: providing underwriting, claims and technical accounting support to complement internal teams; client sectors include risk carriers, brokers and MGAs

•  Legacy solutions: managing discontinued business through outsourcing or consulting to extract maximum value and enable clients to focus on core business activities; client sectors include risk carriers and brokers

Our people are industry practitioners with many years of experience of running often complex reinsurance and insurance operations.  As experienced professionals, we can be trusted to use our initiative, blending easily with our clients' ways of working and becoming effectively an extension of their teams.

Pro plc is a global company, operating from offices in London, New York, Cologne, Zurich, and Buenos Aires, supported by operational centres in Gloucester (UK), York (US) and Sundern (Germany). Our local knowledge and global expertise ensures we provide a cost-efficient, round the clock service to support our clients' operations wherever they might be. 

Pro plc comprises Pro Insurance Solutions Ltd, Pro IS Inc., the Chiltington Group and STRIPE as well as Assekuranz Service-und Sachverständigengesellschaft mbH, a leading German disability claims management company. Pro plc also owns 30% of Asta, the leading Lloyd's turnkey managing agency.

Pro plc is listed on the AIM market.

For more information, visit our website: www.pro-global.com/investor-relations


Interim results

 

 

Pro Global Insurance Solutions plc (the "Company" or "Pro") is a specialist outsourcing and consulting service provider addressing complex operational needs of global insurers and reinsurers;.

 

In 2014 Pro launched its "Client First" strategy which:

 

·   Defined and launched Pro client's value proposition, aiming to enhance Pro's reputation and market position;

·   Organised the business into two principal activities (consulting and outsourcing) and four client-centric business lines;

 

a.     Risk audit and compliance (consulting)

b.     Operational consulting

c.     Technical outsourcing

d.     Legacy solutions (outsourcing)

 

·   Focused Pro's sales activities on expanding its client base and broadening existing relationships, seeking long-term high-margin revenue sources. This is evidenced by a strong and more diverse pipeline; and

·   Addressed Pro's costs to ensure an appropriate alignment of costs with revenues and repositioning internal resources onto revenue-generating client activities.

 

 

During 2016 Pro has continued to invest in talent and capability across the group building greater potential for further value creation. The Pro brand has maintained its excellent progress in gaining further recognition in the market attracting new clients and talent.

 

During first half of 2016 revenues grew by 8% on the comparable period last year.   Pro has been successful in attracting new revenues across all products groups which have replaced the naturally declining legacy revenues from existing contracts.  Pro has invested in revenue-generating capabilities in anticipation of further growth during the second half of the year.  This resulted in gross profit growth by 3%, slightly behind the revenues.  The operating overheads were maintained virtually flat as savings in support functions are reinvested in business development.

Pro is continuing to develop its US platform where we see a vast market for Pro's service proposition.  The client base in the US is growing comprising both, London Market insurers operating in the US, as well as local specialist insurers and reinsurers.  Current delivery focuses on technical outsourcing and operational consulting services, while the team is also working on launching a new legacy solutions strategy in the US market,

Pro continues to be well positioned to capture opportunities created by ongoing change in the global insurance and reinsurance markets, driven by regulatory, capital, pricing pressures and now Brexit in the UK. 

 

"During first half of 2016 the Pro team continued to make steady progress in delivering the Client First strategy, developing and strengthening client relationships across all four business lines.  The progress made is a testament to the commitment and dedication of the Pro team as well as tremendous support from Pro's clients"



 

 

 

 

 6 months

 

 6 months

 

 

 

 30 Jun 2016

 

 30 Jun 2015

 

 

 

 (unaudited)

 

 (unaudited)

 

 

 

 

 

 

 

 

 

 £000's

 

 £000's

Revenue from Core business

 

 

 

 

 

Consulting

 

 

3,818

 

3,792

Outsourcing

 

 

9,215

 

7,569

Other

 

 

289

 

944

Total

 

 

13,322

 

12,305

 

 

 

 

 

 

Direct Costs

 

 

(7,702)

 

(6,862)

Gross Profit

 

 

5,620

 

5,443

Gross Margin

 

 

42%

 

44%

 

 

 

 

 

 

Operating Overheads

 

 

(5,482)

 

(5,293)

Interest

 

 

(59)

 

(60)

Operating Profit

 

 

79

 

90

 

 

 

 

 

 

Non-Operating expenses

 

 

(229)

 

(375)

Total Operating loss including non-operating items

 

 

(150)

 

(285)

 

 

 

 

 

 

Net Gain from investing activities

 

 

918

 

662

 

 

 

 

 

 

Consolidated Profit before taxation

 

 

768

 

377

 

 

Group results show a £79 thousand operating profit for the interim period compared to an operating Profit of £90 thousand in the 1st half of 2015.  Total profit for the group was £0.8 million compared to £0.4 million profit in the comparative period.

 

In 2015 Pro started to focus on implementing its long-term "Client First" growth strategy and has begun to see encouraging results.  The 2016 results show revenue growth of 8% with strong growth in outsourcing revenue, up 22% on the same period in 2015.    New outsourcing revenue has been offset in part by the natural decline in revenue from the closed books of business which continues to run off.  Gross margins have reduced marginally year on year as we have continued to invest in our capabilities and resources ahead of the growth in revenues.  

 

Operating overheads have marginally increased year on year as additional property expenses are incurred through expansion, with other costs remaining flat year on year.   

 

In January 2012, Pro acquired a 33% interest in Asta, the leading turnkey managing agency Services Company in Lloyd's. Asta continues to perform strongly with Pro's share of their results contributing £1.0 million and £0.7 million to the Group results in the six month periods to 30 June 2016 and 30 June 2015 respectively. Asta paid preference share dividends of £0.1 million (for Pro's 33% share) in 2016 and re-purchased £1.7 million of preference shares reducing Pro's holding to £2.3 million at 30 June 2016.

 

 

Condensed consolidated income statement

For the period ended 30 June 2016

 

 

 

 

 6 months

 

 6 months

 

 

 

 30 Jun 2016

 

 30 Jun 2015

 

 

 

 (unaudited)

 

 (unaudited)

 

 

 

 

 

 

 

Notes

 

 £000's

 

 £000's

Continuing operations

 

 

 

 

 

Revenue

 

 

13,322

 

12,305

Expenses

 

 

(13,413)

 

(12,530)

Other income/(expenses)

 

 

116

 

221

Results of operating activities

 

 

25

 

(4)

 

 

 

 

 

 

Share of results of associate

 

 

994

 

647

 

Finance costs

 

 

(251)

 

(266)

Profit before taxation

 

 

768

 

377

 

 

 

 

 

 

Taxation

 

 

(134)

 

-

Profit for the period from continuing operations

 

 

634

 

377

 

 

 

 

 

 

Profit after taxation

 

 

634

 

377

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period from continuing operations

 

 

634

 

377

Profit for the period attributable to owners of the Company

 

 

634

 

377

 

 

 

 

 

 

 

 

 

 

 

 

 

Results for the period from continuing operations

 

 

-

 

-

Results for the period attributable to non-controlling interests

 

 

-

 

-

 

 

 

 

 

 

 

Profit for the period

 

 

634

 

377

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 


 

From continuing and discontinued operations

 

 

 


 

Basic: Ordinary shares (pence per share)

6

 

0.56


0.33

Diluted: Ordinary shares (pence per share)

6

 

0.54


0.32

 

 

 

 


 

From continuing operations

 

 

 


 

Basic: Ordinary shares (pence per share)

6

 

0.56


0.33

Diluted: Ordinary shares (pence per share)

6

 

0.54


0.32

 

 

Condensed consolidated statement of comprehensive income

For the period ended 30 June 2016

 

 

 

 

 

 6 months

 

 6 months

 

 

 

 30 Jun 2016

 

 30 Jun 2015

 

 

 

 (unaudited)

 

 (unaudited)

 

 

 

 

 

 

 

 

 

 £000's

 

 £000's

 

 

 

 

 

 

Profit before taxation

 

 

634

 

377

 

 

 

 

 

 

Other comprehensive (losses)/income

 

 

 

 

 

 

 

 

 

 

 

Items that may be reclassified subsequently to profit or loss

 

 

 

 

 

Currency translation differences

 

 

98

 

(108)

Total comprehensive income for the period

 

 

732

 

269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period from continuing operations

 

 

732

 

269

Total comprehensive income for the period attributable to owners of the Company

 

 

732

 

269

 

 

Results for the period from continuing operations

 

 

-

 

-

Results for the period attributable to non-controlling interests

 

 

-

 

-

 

Total comprehensive income for the period

 

 

732

 

269

 

 

Condensed consolidated statement of financial position

As at 30 June 2016

 

 

 

 

 30 Jun 2016

 

 31 Dec 2015

 

 

 (unaudited)

 

 

 

 

 

 

 

 

Notes

 £000's

 

 £000's

 

 

 

 

 

ASSETS

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

1,112

 

1,119

Goodwill

 

5,117

 

5,117

Other intangible assets

 

414

 

226

Interest in associate

 

5,938

 

6,645

 

 

12,581

 

13,107

 

 

 

 

 

Current assets

 

 

 

 

Loans and receivables including insurance receivables

 

6,481

 

8,765

Financial assets - investments

 

35

 

35

Cash and cash equivalents

 

6,968

 

4,839

 

 

13,484

 

13,639

 

 

 

 

 

 

 

 

 

 

Total assets

 

26,065

 

26,746

 

 

 

 

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

Equity attributable to owners of the Company

 

 

 

 

Share capital

 

2,267

 

2,264

Other reserves

 

3,419

 

3,321

Retained earnings

 

4,048

 

3,414

Total equity

 

9,734

 

8,999

 

 

 

 

 

Non-current liabilities

 

 

 

 

Financial liabilities - borrowings

 

7,440

 

3,162

 

 

7,440

 

3,162

Current liabilities

 

 

 

 

Financial liabilities - borrowings

 

2,144

 

7,607

Other liabilities

 

6,747

 

6,978

 

 

8,891

 

14,585

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

16,331

 

17,747

 

 

 

 

 

Total equity and liabilities

 

26,065

 

26,746

 

 

 

 

 

 


Condensed consolidated statement of changes in equity

As at 30 June 2016

 

 

 

 

 Share capital

 

 Share premium reserve

 

 Share based payments reserve

 Capital redemption reserve

 Translation reserve

 

 Retained earnings

 

 Total

 

 Non-controlling interest

 

 Total Equity

 

 

 £000's

 

 £000's

 

£000's

£000's

£000's

 

 £000's 

 

 £000's  

 

 £000's 

 

 £000's  

Balance at 1 January 2015

 

2,264

 

-

 

2,730

255

421

 

2,187

 

7,857

 

-

 

7,857

Comprehensive Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

 

-

 

-

 

-

-

-

 

377

 

377

 

-

 

377

Other comprehensive losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency translation differences

 

-

 

-

 

-

-

(108)

 

-

 

(108)

 

-

 

(108)

Total comprehensive (loss)/profit for the period

 

-

 

-

 

-

-

(108)

 

377

 

269

 

-

 

269

Balance at 30 June 2015 (unaudited)

 

2,264

 

-

 

2,730

255

313

 

2,564

 

8,126

 

-

 

8,126

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Balance at 1 January 2016

 

2,264

 

-

 

2,725

255

341

 

3,414

 

8,999

 

-

 

8,999

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

 

-

 

-

 

-

-

-

 

634

 

634

 

-

 

634

Other comprehensive losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency translation differences

 

-

 

-

 

-

-

98

 

-

 

98

 

-

 

98

Total comprehensive (loss)/profit for the period

 

-

 

-

 

-

-

98

 

634

 

732

 

-

 

732

Transactions with owners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital increase

 

3

 

-

 

-

-

-

 

-

 

3

 

-

 

3

Share based payments

 

-

 

-

 

-

-

-

 

-

 

-

 

-

 

-

Non-cash distribution

 

-

 

-

 

-

-

-

 

-

 

-

 

-

 

-

Total transactions with owners

 

3

 

-

 

-

-

-

 

-

 

3

 

-

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 June 2016 (unaudited)

 

2,267

 

-

 

2,725

255

439

 

4,048

 

9,734

 

-

 

9,734


Condensed consolidated statement of cash flows

For the period ended 30 June 2016

 

 

 


 6 months

 

 6 months

 


 30 Jun 2016

 

 30 Jun 2015

 

 

 (unaudited)

 

 (unaudited)

 

 

 

 

 

 

Notes

 £000's

 

 £000's

 

 

 

 

 

Net cash (used in)/generated from continuing operations

7

1,509

 

(1,120)

Cash (used in)/generated from operations

 

1,509

 

(1,120)

Investing activities

 

 

 

 

Purchases of property, plant and equipment

 

(108)

 

(127)

Cash and cash equivalents from Associates

 

1,815

 

-

Cash used in investing activities

 

1,707

 

(127)

Financing activities

 

 

 

 

Cash used in financing activities

 

(1,185)

 

(585)

Cash flows used in financing activities

 

(1,185)

 

(585)

 

 

 

 

 

Net increase / (decrease) in cash and cash equivalents

 

2,031

 

(1,832)

Cash and cash equivalents at beginning of the period

 

4,839

 

7,753

Effects of exchange rate changes on the balance of cash held in foreign currencies

98

 

(73)

Cash and cash equivalents at the end of the period

 

6,968

 

5,848

 

 

 

 

 

 

 

 

 

 

As presented in the consolidated statement of financial position

 

 

 

 

Cash and cash equivalents

 

4,839

 

7,753

Cash and cash equivalents at beginning of year

 

4,839

 

7,753

 

 

 

 

 

As presented in the consolidated statement of financial position

 

 

 

 

Cash and cash equivalents

 

6,968

 

5,848

Cash and cash equivalents at end of the period

 

6,968

 

5,848

 

 

 

 

Notes to the condensed consolidated financial statements

For the period ended 30 June 2016

 

1.  General information

 

                

The interim consolidated financial statements do not constitute statutory accounts as defined in section 434 of the Companies Act 2006 and should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2015. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified, did not include a reference to any matters to which the auditors draw attention by way of emphasis without qualifying the report, and did not contain any statements under section 498(2) or 498(3) of the Companies Act 2006.

 

The Directors have considered the position of the Group's assets compared to the liabilities. In addition they have assessed the Group's liquidity with regard to expected future cash flows. They have also considered the performance of the business, as discussed in the interim results. In light of these reviews the Directors have concluded that it is appropriate to adopt the going concern basis in preparing the interim report.                                          

                                                                                        

The interim results have been reviewed by the Group's auditors, Mazars LLP, and their review report is set out on page 14.

 

2.  Significant accounting policies

 

a.     Basis of accounting

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") adopted for use in the European Union. The financial statements also comply with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

 

The Directors have, at the time of approving the financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. Further detail is contained in the report of the Directors.

 

The financial statements are presented in thousands of pounds sterling, rounded to the nearest thousand. The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

 

b.     Basis of consolidation

These financial statements consolidate all the enterprises over which the Group exercises control either directly or indirectly (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

 

The results of subsidiaries acquired or disposed of during the year are included in the consolidated profit or loss from the effective date of acquisition or up to the effective date of disposal. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-Group transactions, balances, income and expenses are eliminated on consolidation.

 

c.     Investments in associates

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting except when classified as held for sale. Investments in associates are carried in the statement of financial position at cost as adjusted by post acquisition changes in the Group's share of the net assets of the associates, less any impairment in the value of individual investments. Losses of the associates in excess of the Group's interest in those associates are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associates.

 

Any excess of the cost of acquisition over the Group's share of the fair values of the identifiable net assets of the associate at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that investment. Any deficiency of the cost of acquisition below the Group's share of the fair values of the identifiable net assets of the associate at the date of acquisition (i.e. discount on acquisition) is credited in the profit or loss in the period of acquisition.

 

3.  Critical accounting judgements and estimates

 

The judgements and estimates made by management which are relevant and have a significant effect on the condensed consolidated financial statements are consistent with those disclosed in the Group's consolidated financial statements for the year ended 31 December 2015.

 

Accounting Estimates

 

Provisions for future liabilities or work in progress accruals for future revenue are only accrued on the basis of certainty required by accounting standards.  The values that are included are calculated based on the information that is available and an assessment of the likely outcome. 

 

 

4.  Change in accounting policy

 

 

No changes to the accounting policies during the period.

 

5.  Segmental information

 

The Group's revenue is generated in a number of countries, United Kingdom, United States, Europe and Latin America, with the activities divided into two key segments.

 

Outsourcing

 

Outsourcing is provided within the reinsurance and insurance industry with services provided through the Company's legacy solutions product to books of business that are in run-off. The technical outsourcing product provides outsourcing services to both start up and established operators.

 

Consultancy

 

Consultancy services are provided within the reinsurance and insurance industry to provide services in two key areas:

 

•   Risk, audit and compliance; and

•   Change management including project management, process engineering, business analysis and data engineering.

 

Other

 

Other includes revenue from STRIPE Global Services Limited, Debt Purchase and incidental revenue that is generated outside of these core services by shared services resources.

 

For management purposes the Group is divided into the four product groups, although these have been combined into outsourcing and consultancy as they share the same distribution and margin styles. The Group is monitored on both a product and territory split by management, with assets and liabilities being monitored on a Group basis.

 

The segments identified, although dependant on clients' demands which can be affected by peak holiday periods, are not materially impacted by seasonality. The segments have no infrastructure, assets or liabilities separately identified from the Group.

(a)   Segment income and results

 

The following is an analysis of the Group's revenue and results by reportable segment.

 

 

 Outsourcing


 Consulting


 Other




 Consolidated

For the period ended 30 Jun 2016

 

 £000's

 

 £000's

 

 £000's

 

 

 

 £000's

Revenue

 

 

 

 

 

 

 

 

 

 

Third party

 

9,215

 

3,818

 

289

 

 

 

13,322

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

9,215

 

3,818

 

289

 

 

 

13,322

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) on continuing operations

 

58

 

18

 

692

 

 

 

768

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Outsourcing


 Consulting


 Other




 Consolidated

For the period ended 30 Jun 2015

 

 £000's

 

 £000's

 

 £000's

 

 

 

 £000's

Revenue

 

 

 

 

 

 

 

 

 

 

Third party

 

7,569

 

3,792

 

944

 

 

 

12,305

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

7,569

 

3,792

 

944

 

 

 

12,305

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) on continuing operations

 

69

 

21

 

287

 

 

 

377

 

 

 

 

 

 

 

 

 

 

 

 

No adjustments are required for revenue recognition.

 

 

5.  Segmental information continued

(b)   Geographical Information

 

Revenue is generated in a number of territories; the revenue is booked within the territory that is providing the resources to fulfil the contract.



 30 Jun 2016

 

 30 Jun 2015

Revenue from external customers


 £000's


 £000's

United Kingdom


9,770


8,818

United States


2,452


2,420

Europe


759


692

Latin America


341


375

Total revenue


13,322


12,305

 

 

The following is a geographical analysis of the Group's non-current assets. Non-current assets for this purpose consist of property, plant and equipment, intangible assets and investments in associates.

 

 



 30 Jun 2016

 

 31 Dec 2015

Location of non-current assets


 £000's


 £000's

United Kingdom


7,170


7,732

United States


38


-

Europe


249


258

Latin America


7


-

Total non-current assets


7,464


7,990

 

6.  Earnings per share

 

 

 

 

 30 Jun 2016

 

 30 Jun 2015

Earnings

 

 

 £000's

 

 £000's

Earnings for the purposes of basic earnings per share from continuing and discontinued operations being net profit attributable to equity holders of the Group

 

 

634

 

377

Earnings for the purposes of basic earnings per share from continuing operations being net profit attributable to equity holders of the Group

 

 

634

 

377

 

 

 

 

 

 

Number of shares

 

 

 30 Jun 2016

 

 30 Jun 2015

Weighted average number of Ordinary Shares for the purposes of basic earnings per share

 

 

113,269,097

 

113,184,482

Effect of dilutive potential Ordinary Shares: Share options

 

 

4,993,221

 

6,500,000

Weighted average number of Ordinary Shares for the purposes of diluted earnings per share

 

118,262,318

 

119,684,482

 

 

 

 

 

 

 30 Jun 2016

 

 30 Jun 2015

Basic earnings per share

 

 

 UK pence

 

 UK pence

 

 

 

 

 

 

From continuing and discontinued operations

 

 

 

 

 

Basic: Ordinary Shares (pence per share)

 

 

0.56

 

0.33

Diluted: Ordinary Shares (pence per share)

 

 

0.54

 

0.32

 

 

 

 

 

 

From continuing operations

 

 

 

 

 

Basic: Ordinary Shares (pence per share)

 

 

0.56

 

0.33

Diluted: Ordinary Shares (pence per share)

 

 

0.54

 

0.32

 

 

 

 

 

 

 

 

7.  Cash (used in)/generated from continuing operations

 

 

 

 

 30 Jun 2016

 

 30 Jun 2015

 

 

 

 (unaudited)

 

 (unaudited)

 

 

 

 £000's

 

 £000's

Profit/(loss) for the period from continuing operations

 

 

25

 

(4)

Adjustments for:

 

 

 

 

 

- depreciation

 

 

117

 

325

- investment income in profit & loss

 

 

(115)

 

(220)

- unpaid taxation

 

 

(133)

 

-

- capitalisation of intangible assets

 

 

(214)

 

-

- amortisation of intangible asset

 

 

26

 

33

- other gains and losses

 

 

-

 

163

 

 

 

(294)

 

297

Change in operating assets and liabilities

 

 

 

 

 

Net (increase)/decrease in loans and receivables

 

 

2,285

 

169

Net increase/(decrease) in other operating liabilities

 

 

(231)

 

(1,277)

Cash generated/(used in) from operations

 

 

1,760

 

(811)

 

 

 

 

 

 

Interest paid

 

 

(251)

 

(265)

Taxation paid

 

 

-

 

(44)

Net cash generated/(used in) from operations

 

 

1,509

 

(1,120)

 

 

8.  Financial Liabilities - Borrowings

 

The Group has a loan facility with Natixis Bank which is secured on the Group's investment in Asta.  This facility was drawn down in 2012 to fund the Group's investment in Asta, Chiltington and the incubators.  Following the disposal of KX Re in April 2013, £5.0 million was repaid against the facility.  Repayments have been made in 2015 and 2016 following distributions and preference share redemption from Asta leaving a balance due of £6.4 million at the end of June 2016 (£7.6 million : 31 December 2015).

 

At 30 June 2015 the loan was renewed for a twelve month period which expired at the end of June 2016.  The loan has now been extended for a further three years with a straight line amortisation schedule with the first payment due in June 2017.  The amortisation will be funded through the utilisation of distributions from Asta, group surplus cash and the extension of the existing loan facility with Financiere Pinault.

 

The rate for interest payments for the year to date is 6 month LIBOR plus a margin of 4.5%.

 

An €8 million facility is in place for an unsecured working capital loan with Financière Pinault, which has a closing balance of £3.1 million (2015: £3.1million).

 

Borrowings are classified as financial instruments - other liabilities. The carrying amounts of the other liabilities in the financial statements approximate to their fair value

 

 

9.  Related party transactions

 

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Tawa Associates Limited and its subsidiaries are considered related parties as both the entity and the Group have the same ultimate parent.

 

Trading transactions

 

Two of the Company's subsidiaries Pro Insurance Solutions Ltd and Pro IS, Inc provide insurance run-off management services to Tawa Associates Limited and its subsidiaries.

 

Run-off management revenue is provided on a negotiated fee basis. Run-off management expenses are recharged at cost by Pro Insurance Solutions Ltd and Pro IS, Inc.

 

During the period Group companies entered into the following transactions with related parties who are not members of the Group:

 

 

 

 

 30 Jun 2016

 

 30 Jun 2015


 

 

 £000's

 

 £000's

Revenue






Tawa Associates Limited, and its subsidiaries below



115


84

Amberley Alternative Assets Limited



14


4

Island Capital Limited



22


47

Pocono Holdings Limited



(2)


1

Q360 Limited



3


5

Tawa Management Limited



-


8

PXRE Reinsurance Company



11


185

Lodestar Marine Limited



267


319

Associate CX Reinsurance Company Limited



611


1,403

Associate QX Reinsurance Company Limited



-


1

Total revenue with related parties

 


1,041


2,057

Recharged expenses



 


 

Tawa Associates Limited, and its subsidiaries below



-


-

Q360 Limited



-


11

Total expenses with related parties

 


-


11

 

At the period end, the following balances with related parties who are not members of the Group were outstanding:

         

 

 

 

 30 Jun 2016

 

 30 Jun 2016


 

 

 £000's

 

 £000's

Tawa Associates Limited, and its subsidiaries below



13


(16)

Amberley Alternative Assets Limited



-


26

Island Capital Limited



4


32

Lodestar Marine Limited



145


-

PXRE Reinsurance Company



-


16

Associate CX Reinsurance Company Limited



164


197

Associate QX Reinsurance Company Limited



 


-

Total outstanding balances with related parties

 


326


255



 

9.     Related party transactions continued 

Key management personnel

 

The Group considers its key management personnel to include its Executive and Non-Executive Directors and those members of management reporting directly to its Board that have executive management responsibility for Group-wide operations.

 

Remuneration of key management personnel

 

The remuneration of key management included in the income statement is set out below:

 

 

 

 

 

 30 Jun 2016

 

 30 Jun 2015

 

 

 

 

 

 


 

 

 £000's

 

 £000's

Short-term employee benefits



939


956

Post-employment benefits



56


66

Share based payments



-


-

Total management remuneration

 


995


1,022

 

 

Immediate and ultimate parent company

 

The immediate and ultimate parent company is Financière Pinault S.C.S., a Société en commandite par actions incorporated in France. The Pinault family members are, in the opinion of the Directors, the ultimate controlling parties of the Company. The group financial statements of Financière Pinault S.C.S. may be obtained from the Tribunal de Commerce de Paris, 1 Quai de Corse, 75004 Paris, France.

 

 

10.   Contingent liabilities

 

At 30 June 2016 the Group did not have any material contingent liabilities

 

 

11.   Events after reporting period

 

There are no significant events after the reporting period.

 

 

Independent review report to Pro Global Insurance Solutions plc

 

We have been engaged by Pro Global Insurance Solutions plc to review the condensed set of consolidated financial statements in the interim report for the six months ended 30 June 2016 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and related notes 1 to 11.  We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of consolidated financial statements.

 

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board.  Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

 

Respective responsibilities of Directors and auditor

 

The interim report, including the condensed set of consolidated financial statements contained therein, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim report in accordance with the AIM Rules issued by the London Stock Exchange, which require that the interim report be prepared and presented in a form consistent with that which will be adopted in the Company's annual accounts having regard to the accounting standards applicable to such annual accounts.

 

The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union.  As disclosed in note 2, the condensed set of consolidated financial statements included in this interim report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

 

Our responsibility is to express to the Company a conclusion on the condensed set of consolidated financial statements in the interim report based on our review.

 

Scope of review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the interim report for the six months ended 30 June 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules issued by the London Stock Exchange.

 

Mazars LLP

Chartered Accountants

Tower Bridge House

St Katharine's Way

London E1W 1DD

 

21 September 2016

 

 

 

 

Notes:

(a) The maintenance and integrity of the Pro Global Insurance Solutions web site is the responsibility of the Directors; the work carried out by us does not involve consideration of these matters and, accordingly, we accept no responsibility for any changes that may have occurred to the interim report since it was initially presented on the web site.

(b) Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.

 

Pro Global Insurance Solutions plc Company information

 

 

Directors

 

Tim Carroll

Independent Non-Executive Chairman

 

 

Artur Niemczewski

Chief Executive Officer

 

 

Gilles Erulin

Non-Executive Director

 

 

Loïc Brivezac

Non-Executive Director

 

 

Registered Office

 

88 Leadenhall Street

London EC3A 3BP

 

 

Company registration number

 

4200676

 

 

Secretary

 

Michael Dalzell

 

Nominated Advisor and Broker

 

Peel Hunt Ltd

120 London Wall

London EC2Y 5ET

 

 

Auditor

 

Mazars LLP

Tower Bridge House

St Katharine's Way

London E1W 1DD

 

 

Solicitors

 

DLA Piper UK LLP

3 Noble Street

London EC2V 7EE

 

 

Principal Bankers

 

Barclays Bank plc

1 Churchill Place

Canary Wharf

London E14 5HP

 

 

Registrars

 

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS99 6ZZ

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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