|
|
|
2004
£m |
|
2003
£m |
|
|
| Interim dividend of 3.0 pence (2003: 0.85 pence) per ordinary share |
|
|
11.7 |
|
3.3 |
|
| Proposed final dividend of 5.0 pence (2003: 1.65 pence) per ordinary share |
|
|
19.6 |
|
6.4 |
|
|
|
|
|
31.3 |
|
9.7 |
|
|
13 Earnings and net assets per ordinary share
Earnings per share is based on the profit attributable to shareholders for the year ended 31 December 2004 of £86 million (2003: £83.3 million)
and the weighted average number of shares in issue during the period. Shares held by the Employee Share Ownership Trust (ESOT) are excluded
from the weighted average number of shares.
Basic and diluted earnings per share are as follows:
|
|
|
|
2004 |
|
2003 |
|
|
| Profit for the financial year |
|
|
£86.0m |
|
£83.3m |
|
| Weighted average number of shares in issue |
|
|
388.4m |
|
384.6m |
|
| Dilutive shares |
|
|
6.0m |
|
4.9m |
|
|
| Adjusted average number of shares in issue |
|
|
394.4m |
|
389.5m |
|
|
| Basic earnings per share |
|
|
22.1p |
|
21.6p |
|
| Diluted earnings per share |
|
|
21.8p |
|
21.4p |
|
|
Basic net assets per share are as follows:
|
|
|
|
2004 |
|
2003 |
|
|
| Net assets at 31 December |
|
|
£443.9m |
|
£383.3m |
|
| Adjustments for intangible assets |
|
|
(£56.7m |
) |
(£57.0m |
) |
|
| Tangible net assets at 31 December |
|
|
£387.2m |
|
£326.3m |
|
|
| Number of shares in issue at 31 December |
|
|
395.1m |
|
390.9m |
|
| Adjustment for ESOT shares |
|
|
(4.2m |
) |
(5.2m |
) |
|
| Basic number of shares after ESOT adjustment |
|
|
390.9m |
|
385.7m |
|
|
| Net assets per share |
|
|
113.6p |
|
99.3p |
|
| Tangible net asset per share |
|
|
99.1p |
|
84.6p |
|
|
14 Intangible assets
|
|
Purchased
syndicate
participations
£m |
|
Goodwill
£m |
|
Total
£m |
|
|
| Cost |
|
|
|
|
|
|
| At 1 January 2004 |
63.2 |
|
- |
|
63.2 |
|
| Additions |
- |
|
3.2 |
|
3.2 |
|
|
| At 31 December 2004 |
63.2 |
|
3.2 |
|
66.4 |
|
|
| Amortisation |
|
|
|
|
|
|
| At 1 January 2004 |
6.2 |
|
- |
|
6.2 |
|
| Charge for the year |
3.1 |
|
0.4 |
|
3.5 |
|
|
| At 31 December 2003 |
9.3 |
|
0.4 |
|
9.7 |
|
|
| Net book value |
|
|
|
|
|
|
| At 31 December 2004 |
53.9 |
|
2.8 |
|
56.7 |
|
|
| At 1 January 2004 |
57.0 |
|
- |
|
57.0 |
|
|
Acquisition of St Margaret’s Insurance Services Limited
On 13 May 2004, the Group purchased the entire share capital of St Margaret’s Insurance Services Limited (formerly SM Marine Holdings
Limited) and its subsidiary Amlin Underwriting Services Limited (formerly St. Margaret’s Insurances Limited) (together, ‘St Margaret’s’) by
payment of a cash consideration. St Margaret’s principal activity is broking and managing insurance for UK yacht owners.
The goodwill arising in respect of the acquisition of St Margaret’s is calculated as follows:
|
| |
|
|
|
|
£m |
|
|
| Fair value of consideration |
|
|
|
|
3.2 |
|
| Expenses |
|
|
|
|
0.3 |
|
|
| Cost of acquisition |
|
|
|
|
3.5 |
|
| Less: fair value of net assets acquired |
|
|
|
|
(0.3 |
) |
|
| Goodwill at date of acquisition |
|
|
|
|
3.2 |
|
|
The net assets of St Margaret’s on 13 May 2004 were as follows:
|
| |
|
|
|
|
Book value and
fair value
at acquisition
£m |
|
|
| Debtors |
|
|
|
|
0.1 |
|
| Cash at bank and in hand |
|
|
|
|
0.7 |
|
| Creditors: amounts falling due within one year |
|
|
|
|
(0.5 |
) |
|
| |
|
|
|
|
0.3 |
|
|
There are no fair value adjustments to the net assets of St Margaret’s at the date of acquisition. The summarised profit and loss accounts for
St Margaret’s from 1 October 2003 (the beginning of its accounting period) to 13 May 2004 (the date of acquisition) and for the year ended
30 September 2003 (being its previous accounting period) were as follows:
|
| |
|
|
Period
1 Oct 2003 to
13 May 2004
£m |
|
Period
1 Oct 2002 to
30 Sept 2003
£m |
|
|
| Turnover |
|
|
0.7 |
|
1.2 |
|
| Administration expenses |
|
|
(0.5 |
) |
(0.9 |
) |
|
| Profit on ordinary activities before taxation |
|
|
0.2 |
|
0.3 |
|
| Tax |
|
|
(0.1 |
) |
(0.1 |
) |
|
| Retained profit for period |
|
|
0.1 |
|
0.2 |
|
|
The profit and loss accounts of St Margaret’s relate to the insurance activity of the company and exclude the profits for underwriting portfolios that
it manages. Amlin will receive its share of this profit through underwriting the yacht portfolios as well as the net income of St Margaret’s.
15 Other financial investments
|
| Group |
At valuation
2004
£m |
|
At valuation
2003
£m |
|
At cost
2004
£m |
|
At cost
2003
£m |
|
|
| Shares and other variable yield securities |
90.5 |
|
50.6 |
|
82.7 |
|
46.7 |
|
| Debt and other fixed income securities |
719.1 |
|
750.3 |
|
723.1 |
|
755.0 |
|
| Participation in investment pools |
305.4 |
|
128.3 |
|
305.4 |
|
128.6 |
|
| Deposits with credit institutions |
141.0 |
|
80.7 |
|
140.5 |
|
80.6 |
|
| Overseas deposits |
42.5 |
|
34.5 |
|
42.5 |
|
34.5 |
|
| Other |
2.9 |
|
4.0 |
|
2.9 |
|
4.0 |
|
|
|
1,301.4 |
|
1,048.4 |
|
1,297.1 |
|
1,049.4 |
|
|
| In Group owned companies |
309.7 |
|
235.7 |
|
301.9 |
|
232.1 |
|
| In aligned syndicates |
979.8 |
|
801.1 |
|
983.3 |
|
806.1 |
|
| In non-aligned syndicates |
11.9 |
|
11.6 |
|
11.9 |
|
11.2 |
|
|
|
1,301.4 |
|
1,048.4 |
|
1,297.1 |
|
1,049.4 |
|
|
Listed investments included in Group owned total are as follows:
|
|
| Shares and other variable yield securities |
90.5 |
|
50.6 |
|
82.7 |
|
46.7 |
|
| Debt and other fixed income securities |
84.0 |
|
92.5 |
|
75.7 |
|
92.8 |
|
|
|
174.5 |
|
143.1 |
|
158.4 |
|
139.5 |
|
|
As explained in note 31, the majority of the Group investments are charged to Lloyd’s to support the Group’s underwriting activities.
The table below sets out, by currency, the duration of the Group’s share of the managed syndicate debt securities together with the Group’s own
debt portfolio, at 31 December:
|
| Syndicates |
Balance
2004
£m |
|
Duration
2004
years |
|
Balance
2003
£m |
|
Duration
2003
years |
|
|
| Sterling |
202.8 |
|
2.6 |
|
212.1 |
|
2.7 |
|
| US dollar |
341.0 |
|
2.6 |
|
377.3 |
|
2.5 |
|
| Canadian dollar |
24.7 |
|
2.5 |
|
18.7 |
|
2.2 |
|
| Euro |
55.9 |
|
2.8 |
|
38.4 |
|
3.1 |
|
|
|
624.4 |
|
2.6 |
|
646.5 |
|
2.6 |
|
|
|
| Corporate |
|
|
|
|
|
|
|
|
|
| Sterling |
84.0 |
|
0.3 |
|
92.5 |
|
0.3 |
|
|
An indication of the potential impact on these funds of changes in the yield curve due to unexpected changes in underlying interest rates
is given below:
|
|
|
|
Syndicate |
|
|
|
|
|
|
|
| Shift in yield (basis points) |
Sterling
% |
|
US$
% |
|
Can$
% |
|
Euro
% |
|
Corporate
Sterling
% |
|
Net
(reduction)
increase
in value
£m |
|
|
| 100 |
(0.8 |
) |
(2.7 |
) |
(3.1 |
) |
(2.5 |
) |
(0.2 |
) |
(20 |
) |
| 75 |
(0.6 |
) |
(2.0 |
) |
(2.4 |
) |
(1.9 |
) |
(0.2 |
) |
(15 |
) |
| 50 |
(0.4 |
) |
(1.4 |
) |
(1.6 |
) |
(1.3 |
) |
(0.1 |
) |
(10 |
) |
| 25 |
(0.2 |
) |
(0.7 |
) |
(0.8 |
) |
(0.6 |
) |
(0.1 |
) |
(5 |
) |
| -25 |
0.2 |
|
0.7 |
|
0.8 |
|
0.4 |
|
0.1 |
|
5 |
|
| -50 |
0.4 |
|
1.4 |
|
1.6 |
|
1.3 |
|
0.1 |
|
10 |
|
| -75 |
0.7 |
|
2.0 |
|
2.4 |
|
2.0 |
|
0.2 |
|
16 |
|
| -100 |
0.9 |
|
2.7 |
|
3.1 |
|
2.6 |
|
0.2 |
|
21 |
|
|
Using Standard and Poor’s and Moody’s as rating sources, the credit ratings of the Group’s share of the debt and other fixed income securities is
set out below:
|
|
|
|
|
|
|
2004
£m |
|
2004
% |
|
2003
£m |
|
2003
% |
|
|
| Government/Government Agency |
364.0 |
|
50.6 |
|
481.0 |
|
64.1 |
|
| AAA/Aaa |
|
|
|
|
91.1 |
|
12.7 |
|
100.3 |
|
13.3 |
|
| AA/Aa |
|
|
|
|
90.6 |
|
12.6 |
|
60.5 |
|
8.1 |
|
| A |
|
|
|
|
137.2 |
|
19.1 |
|
88.4 |
|
11.8 |
|
| BBB/Baa |
|
|
|
|
25.5 |
|
3.5 |
|
8.8 |
|
1.2 |
|
|
|
|
|
|
|
708.4 |
|
98.5 |
|
739.0 |
|
98.5 |
|
|
| In non-aligned syndicates |
10.7 |
|
1.5 |
|
11.3 |
|
1.5 |
|
|
|
|
|
|
|
719.1 |
|
100.0 |
|
750.3 |
|
100.0 |
|
|
The cost and valuation of the Company’s investments are as follows:
|
| Company |
At valuation
2004
£m |
|
At valuation
2003
£m |
|
At cost
2004
£m |
|
At cost
20032
£m |
|
|
| Participations in investment pools |
12.5 |
|
12.2 |
|
12.5 |
|
12.2 |
|
|
The corporate and syndicate fund managers at 31 December 2004 were:
|
| Manager |
Funds managed |
|
| AIM Global |
Sterling, Euro and US dollar liquid funds |
| Alliance Capital |
Sterling and Euro bonds and sterling liquid funds |
| Barclays Global Investors |
Sterling, Euro and US dollar liquid funds |
| Citigroup Asset Management |
US dollar liquid funds |
| Insight Investment Management |
Sterling bonds |
| Taube Hodson Stonex Partners |
Global equities |
| Weiss Peck & Greer Investments |
US and Canadian dollar bonds |
| Western Asset Management |
US dollar bonds |
|
Back to top
16 Other investments |
|
|
|
|
|
Subsidiary
undertakings
£m |
|
|
| At 1 January 2004 |
|
|
|
|
205.4 |
|
| Additions during the year |
|
|
|
|
3.2 |
|
|
| At 31 December 2004 |
|
|
|
|
208.6 |
|
|
The principal undertakings of Amlin plc at 31 December 2004 which are consolidated in these financial statements, all of which are wholly
owned, operate in the UK and are registered in England and Wales, are listed below:
|
| Subsidiary undertakings |
Principal activity |
|
Amlin Underwriting Limited
Amlin Investments Limited
Amlin Corporate Services Limited
Amlin Corporate Member Limited
AUT (No 2) Limited
AUT (No 6) Limited
AUT (No 7) Limited
AUT (No 8) Limited
Delian Beta Limited
Delian Delta Limited
|
Lloyd’s managing agency
Investment company
Group service and employing company
Corporate member at Lloyd’s
Corporate member at Lloyd’s
Corporate member at Lloyd’s
Corporate member at Lloyd’s
Corporate member at Lloyd’s
Corporate member at Lloyd’s
Corporate member at Lloyd’s
|
|
17 Debtors arising out of direct insurance operations
|
|
|
|
2004
£m |
|
2003
£m |
|
|
| Amounts owed by policyholders |
|
|
8.2 |
|
10.5 |
|
| Amounts owed by intermediaries |
|
|
101.9 |
|
123.6 |
|
|
|
|
|
110.1 |
|
134.1 |
|
|
| 18 Tangible assets |
| Group |
Leasehold
land and
buildings
£m |
|
Motor
vehicles
£m |
|
Computer
equipment
£m |
|
Fixtures,
fittings and
leasehold
improvements
£m |
|
Total
£m |
|
|
| Cost |
|
|
|
|
|
|
|
|
|
|
| At 1 January 2004 |
1.9 |
|
0.3 |
|
11.3 |
|
5.5 |
|
19.0 |
|
| Additions |
- |
|
0.1 |
|
2.3 |
|
- |
|
2.4 |
|
| Disposals |
- |
|
(0.1 |
) |
- |
|
- |
|
(0.1 |
) |
|
| At 31 December 2004 |
1.9 |
|
0.3 |
|
13.6 |
|
5.5 |
|
21.3 |
|
|
| Accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
| At 1 January 2004 |
0.1 |
|
0.1 |
|
9.2 |
|
3.2 |
|
12.6 |
|
| Charge for the year |
- |
|
0.1 |
|
1.4 |
|
1.1 |
|
2.6 |
|
| Disposals |
- |
|
(0.1 |
) |
- |
|
- |
|
(0.1 |
) |
|
| At 31 December 2004 |
0.1 |
|
0.1 |
|
10.6 |
|
4.3 |
|
15.1 |
|
|
| Net book value |
|
|
|
|
|
|
|
|
|
|
| At 31 December 2004 |
1.8 |
|
0.2 |
|
3.0 |
|
1.2 |
|
6.2 |
|
|
| At 1 January 2004 |
1.8 |
|
0.2 |
|
2.1 |
|
2.3 |
|
6.4 |
|
|
The assets held under finance leases and hire purchase contracts included in the above had no net book value in either the current
or previous year.
|
| Company |
|
|
|
|
|
|
|
|
|
|
Leasehold
land and
buildings
£m |
|
|
| Cost |
|
|
|
|
|
|
| At 1 January and 31 December 2004 |
|
|
|
|
1.9 |
|
|
| Accumulated depreciation |
|
|
|
|
|
|
| At 1 January 2004 |
|
|
|
|
0.1 |
|
| Charge for the year |
|
|
|
|
- |
|
|
| At 31 December 2004 |
|
|
|
|
0.1 |
|
|
| Net book value |
|
|
|
|
|
|
| At 31 December 2004 |
|
|
|
|
1.8 |
|
|
| At 1 January 2004 |
|
|
|
|
1.8 |
|
|
|
| 19 Ordinary share capital |
|
Authorised ordinary shares of 25p each
|
|
|
Number |
|
£m |
|
|
| At 1 January and 31 December 2004 |
|
|
562,000,000 |
|
140.5 |
|
|
|
| Allotted, called up and fully paid: |
|
|
Number |
|
£m |
|
|
| At 1 January 2004 |
|
|
390,871,916 |
|
97.7 |
|
| Scrip dividend alternative shares issued |
|
|
1,765,318 |
|
0.5 |
|
| Share options exercised |
|
|
2,452,374 |
|
0.6 |
|
|
| At 31 December 2004 |
|
|
395,089,608 |
|
98.8 |
|
|
The scrip dividend shares were issued at reference share prices of 163.58 pence per share for the 2003 final dividend, at which 553,703 shares
were issued, and 150.25 pence per share for the 2004 interim dividend, at which 1,211,615 shares were issued. The shares issued on exercise
of options include 56,574 new shares issued on behalf of the Group’s Employee Share Ownership Trust pursuant to the 1998 Murray Lawrence
scheme and were issued for a total consideration of £2,364,130 at an average of 96.4 pence per share.
20 Share options
Details of the Amlin Executive Share Option Schemes are set out in the Directors’ remuneration report. At 31 December 2004 the following
options over new shares, which are potentially exercisable between three and 10 years after grant, or earlier in special circumstances such as
redundancy, were outstanding under these executive schemes:
|
| Usual first month of exercise |
|
|
Option price
per share |
|
Number
of shares |
|
|
| June 2003 |
|
|
77.68p |
|
457,607 |
|
| November 2002 |
|
|
81.04p |
|
135,552 |
|
| May 2005 |
|
|
81.28p |
|
2,945,727 |
|
| October 2002 |
|
|
85.35p |
|
698,605 |
|
| May 2000 |
|
|
112.21p |
|
642,103 |
|
| May 2004 |
|
|
115.09p |
|
893,540 |
|
| September 2001 |
|
|
115.57p |
|
451,148 |
|
| April 2006 |
|
|
118.00p |
|
2,305,500 |
|
| March 2007 |
|
|
162.75p |
|
2,812,954 |
|
|
|
|
|
|
|
11,342,736 |
|
|
The following changes in new shares under option pursuant to these executive schemes took place during the year:
|
|
|
|
Number of
shares
2004 |
|
Number of
shares
2003 |
|
|
| At 1 January |
|
|
10,577,840 |
|
9,077,946 |
|
| Granted during the year |
|
|
2,864,566 |
|
2,456,000 |
|
| Exercised during the year |
|
|
(1,898,497 |
) |
(797,506 |
) |
| Lapsed during the year |
|
|
(201,173 |
) |
(158,600 |
) |
|
| At 31 December |
|
|
11,342,736 |
|
10,577,840 |
|
|
In addition to these executive options, the following employee Sharesave options over new shares were outstanding at 31 December 2004:
|
| Savings period |
Usual first month
of exercise |
|
Option price
per share |
|
Number
of shares |
|
|
| 5 years |
December 2004 |
|
82.48p |
|
76,919 |
|
| 3 years |
December 2005 |
|
84.00p |
|
564,075 |
|
| 5 years |
December 2007 |
|
84.00p |
|
184,965 |
|
| 3 years |
July 2004 |
|
97.82p |
|
13,462 |
|
| 5 years |
July 2006 |
|
97.82p |
|
63,455 |
|
| 3 years |
July 2007 |
|
142.80p |
|
349,932 |
|
| 5 years |
July 2009 |
|
142.80p |
|
164,387 |
|
|
|
|
|
|
|
1,417,195 |
|
|
The following changes in new shares under option pursuant to the Sharesave scheme took place during the year:
|
|
|
|
Number of
shares
2004 |
|
Number of
shares
2003 |
|
|
| At 1 January |
|
|
1,468,523 |
|
1,840,333 |
|
| Granted during the year |
|
|
546,791 |
|
- |
|
| Exercised during the year |
|
|
(497,303 |
) |
(289,912 |
) |
| Lapsed during the year |
|
|
(100,816 |
) |
(81,898 |
) |
|
| At 31 December |
|
|
1,417,195 |
|
1,468,523 |
|
|
The trustee of the Group’s Employee Share Ownership Trust (ESOT) held 4,229,734 ordinary shares as at 31 December 2004 (2003: 5,209,922), of
which 4,095,924 shares (2003: 5,132,686) were reserved to meet potential future exercises of executive options, in addition to the options over new
shares detailed above. During the year 56,574 new shares were issued to satisfy options on behalf of the ESOT. In addition there are arrangements
whereby the ESOT will provide up to 508,902 Performance Share Plan shares, normally not until 2009. The ESOT shares are valued at the lower of
cost and net realisable value. The market value of Amlin plc ordinary shares at 31 December 2004 was 141.5 pence per share (2003: 128.0 pence).
The assets, liabilities, income and costs of ESOT are incorporated into the consolidated financial statements. The ESOT waives the right to
dividends in excess of 0.01 pence per share per interim or final dividend in respect of its total shareholding.
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21 Reserves
|
| Group |
Share
premium
account
£m |
|
Own
shares
£m |
|
Merger
reserve
£m |
|
Capital
redemption
reserve
£m |
|
Profit and
loss account
£m |
|
|
| At 1 January 2004 |
150.2 |
|
(2.4 |
) |
41.9 |
|
2.7 |
|
93.2 |
|
| Issue of share capital for scrip dividend |
2.3 |
|
- |
|
- |
|
- |
|
- |
|
| Issue of share capital on exercise of options over new shares |
1.7 |
|
- |
|
- |
|
- |
|
- |
|
| Exercise of options over shares held by ESOT |
- |
|
0.8 |
|
- |
|
- |
|
- |
|
| Retained profit for the financial year |
- |
|
- |
|
- |
|
- |
|
54.7 |
|
|
| At 31 December 2004 |
154.2 |
|
(1.6 |
) |
41.9 |
|
2.7 |
|
147.9 |
|
|
The cumulative amount of goodwill written off to reserves is £45.7 million (2002: £45.7 million).
|
| Company |
|
|
Share
premium
account
£m |
|
Own
shares
£m |
|
Capital
redemption
reserve
£m |
|
Profit and
loss account
£m |
|
|
| At 1 January 2004 |
150.2 |
|
(2.4 |
) |
2.7 |
|
115.0 |
|
| Issue of share capital for scrip dividend |
2.3 |
|
- |
|
- |
|
- |
|
| Issue of share capital on exercise of options over new shares |
1.7 |
|
- |
|
- |
|
- |
|
| Exercise of options over shares held by ESOT |
- |
|
0.8 |
|
- |
|
- |
|
| Retained profit for the financial year |
- |
|
- |
|
- |
|
27.9 |
|
|
| At 31 December 2004 |
154.2 |
|
(1.6 |
) |
2.7 |
|
142.9 |
|
|
22 Reconciliation of movements in equity shareholders’ funds
|
|
|
|
Group
2004
£m |
|
Group
2003
£m |
|
Company
2004
£m |
|
Company
2003
£m |
|
|
| Profit (loss) attributable to shareholders |
86.0 |
|
83.3 |
|
59.2 |
|
(7.2 |
) |
| Less dividends |
(31.3 |
) |
(9.7 |
) |
(31.3 |
) |
(9.7 |
) |
|
| Retained profit (loss) for the financial year |
54.7 |
|
73.6 |
|
27.9 |
|
(16.9 |
) |
| Issue of share capital |
5.1 |
|
2.6 |
|
5.1 |
|
2.6 |
|
| Movement in shares held by ESOT |
0.5 |
|
0.4 |
|
0.5 |
|
0.4 |
|
| Realised loss on disposal of shares by ESOT |
0.3 |
|
(0.1 |
) |
0.3 |
|
(0.1 |
) |
|
| Net increase (decrease) to shareholders’ funds |
60.6 |
|
76.5 |
|
33.8 |
|
(14.0 |
) |
| Equity shareholders’ funds at 1 January |
383.3 |
|
306.8 |
|
363.2 |
|
377.2 |
|
|
| Equity shareholders’ funds at 31 December |
443.9 |
|
383.3 |
|
397.0 |
|
363.2 |
|
|
