RNS Number:5578S
Benfield Group Limited
08 March 2007
8 March 2007
BENFIELD GROUP LIMITED
Preliminary Results for the year ended 31 December 2006
Benfield Group Limited ("Benfield" or "the Group"), the world's leading
specialist reinsurance and risk intermediary, today announces its preliminary
results for the year ended 31 December 2006.
Financial Highlights
* Group reinsurance broking revenue increased by 12.9% to #299.4m (2005:
#265.1m) - at constant rates of exchange(1) revenue increased by 12.6%
* Group revenue increased by 9.6% to #355.3m (2005: #324.1m) - at
constant rates of exchange(1) revenue increased by 9.4%
* Group trading result(2) increased by 18.3% to #74.9m (2005: #63.3m)
* Group trading margin(3) increased to 21.1% (2005: 19.5%)
* Profit before tax was #53.0m (2005: #53.8m)
* Profit for the financial year increased to #38.4m (2005: #34.9m)
* Basic earnings per share increased to 17.2p (2005: 15.5p)
* Diluted earnings per share increased to 15.9p (2005: 14.1p)
* The Group returned #78.3m of cash to common shareholders in 2006
(2005: #31.1m)
* Final dividend 8.0p per share (2005: 7.0p)
(1) Constant rates of exchange assume conversion of 2006 results at the exchange
rates achieved in 2005.
(2) Trading result comprises operating profit from continuing operations before
goodwill impairment, amortisation of intangible assets, depreciation of
property, plant and equipment and exceptional items.
(3) Trading margin represents trading result as a percentage of revenue.
Operational Highlights
* Strong growth in reinsurance revenues despite challenging market
conditions
* Trading result and margins significantly improved
* New business wins generating continued expansion in target markets
* Strong cash flow enhances shareholder returns
Grahame Chilton, Chief Executive of Benfield, commented: "We are pleased to
announce results which demonstrate the strength of our reinsurance broking
franchise. The pace of change in our industry shows no sign of lessening and
during 2006 Benfield continued to be at the forefront of innovation in
approaches to risk transfer and capital management for our customers. We are
committed to delivering value to shareholders and I remain confident of the
Group's prospects for long-term growth."
Trading Results
2006 2005 Growth
#m #m %
Revenue
International 180.6 163.9 10.2%
US 141.3 134.4 5.1%
Benfield Corporate Risk 18.2 11.4 59.6%
Corporate Investment Group 13.6 13.4 1.5%
Group Services 1.6 1.0 60.0%
Total revenue 355.3 324.1 9.6%
Trading result
International 39.3 32.6 20.6%
US 55.2 50.0 10.4%
Benfield Corporate Risk (17.2) (9.6) (79.2)%
Corporate Investment Group 2.4 (0.9) N/A
Group Services (4.8) (8.8) 45.5%
Total trading result 74.9 63.3 18.3%
Trading margin
International 21.8% 19.9% + 1.9pts
US 39.1% 37.2% + 1.9pts
Group trading margin 21.1% 19.5% + 1.6pts
Contacts:
Grahame Chilton, Chief Executive Benfield +44 (0) 20 7578 7000
John Whiter, Chief Financial Officer Benfield +44 (0) 20 7578 7000
Analysts & Investors
Julianne Jessup Benfield +44 (0) 20 7578 7425
Rob Bailhache Financial Dynamics +44 (0) 20 7269 7200
Media
David Bogg Benfield +44 (0) 20 7522 4016
Peter Rigby/David Haggie Haggie Financial +44 (0) 20 7417 8989
Benfield is the world's leading specialist reinsurance and risk intermediary.
Its customers include many of the world's major insurance and reinsurance
companies as well as government entities and global corporations. Benfield
operates from more than 40 locations worldwide. The company is listed on the
London Stock Exchange under the ticker symbol BFD. www.benfieldgroup.com
BUSINESS REVIEW
The activities of the last 12 months are a reminder of the challenges facing the
insurance and reinsurance markets and the opportunities that arise for Benfield
from them.
During the course of 2006, we saw further market impact, both positive and
negative, from the exceptional hurricane activity of 2005. Benfield continued
to generate significant cash and we initiated a new share buy-back programme.
We continued to invest in marine, energy and power insurance, although revenues
were slower to emerge than originally anticipated. At a critical point in the
year, we experienced the defection of one of our production teams, which we have
since restructured and continued to strengthen. Finally, in early 2007,
legislative changes took place in the Florida insurance market that will
materially impact reinsurance purchases.
Against this background, we are pleased to have seen significant growth in 2006.
We have further strengthened our trading platform to enable us to sustain our
growth momentum and capitalise on the opportunities that these volatile market
conditions present.
During 2006 we made good progress towards the strategic objectives outlined in
last year's Annual Report. We began to see the benefit of the investments made
in 2005 to broaden the core reinsurance broking business and we continued to
return surplus capital to shareholders.
The difficult catastrophe market conditions that developed in the US in the wake
of the record hurricane losses in 2005 offered an exceptional opportunity to
demonstrate our ability to create value by leading change and innovation. With
critical capacity shortfalls at mid-year, a solution that brought new capacity
to the market had to be devised. Benfield Advisory and our US broking operation
achieved this within three weeks with the creation of Starbound Re, a
reinsurance vehicle which generated approximately US$400 million of new capacity
solely for Benfield customers at the height of the acute capacity crunch in
Florida. As a result, Benfield was able to meet demand for catastrophe cover
from customers with south eastern US exposures at mid-year renewals. While
Starbound Re was created to meet the needs of existing customers, it also
contributed to new business growth in 2006 by highlighting Benfield's ability to
combine capital markets expertise and catastrophe reinsurance capabilities.
This is an increasingly important competitive differentiator for Benfield as
demand for capital market alternatives continues to grow across the reinsurance
sector.
A key strategic objective is to optimise trading margins. In 2005 we chose to
sacrifice short-term margin in order to invest in further strengthening the core
broking operations and in the development of Benfield Corporate Risk, our
insurance broking business. As expected, margins in the reinsurance broking
business improved significantly. Reinsurance revenue growth of 12.9% overall in
2006 reflected a strong performance from both the US and International Divisions
despite challenging market conditions. This growth reflected the developing
contribution from recent new recruits, although as previously stated the full
benefit of the investments made in 2005 is not expected to emerge fully until
2008.
By contrast, revenue generation from the new marine energy and power segment of
Benfield Corporate Risk was slower than expected and as a result, it became
evident during the year that it would not attain the original break-even
objective for 2006. Ultimately, Benfield Corporate Risk generated a trading
loss of #17.2m, significantly short of the result we had anticipated at the
outset, and this had an adverse impact on the overall Group trading result and
margin for the year. However, Benfield Corporate Risk is successfully
developing a customer base and market profile in line with our strategic focus
on large scale, high value added business, and is already perceived as one of
the leading brokers in its chosen markets. We continue to expect this business
to attain similar margins to the reinsurance broking business in the medium
term.
Attracting and retaining the best people in the industry continued to drive our
people strategy. Benfield was once more a net recruiter in both the reinsurance
and insurance broking parts of the business, although the level of recruitment
lessened considerably in the second half of the year as we reached the end of
the planned investment begun in 2005. We continue to focus on training and
development. Our 'young leaders' programmes, Footprint and Top Gun, had a very
successful year with nearly 40 team members taking part on both sides of the
Atlantic. We believe that developing our talent internally gives us a
competitive advantage. The benefits package offered to employees was further
enhanced with flexible benefits introduced in the UK. Benfield was ranked by
employees as one of The Sunday Times top 100 employers for the sixth year in
succession.
Given a market-wide shortage of specialist expertise, it is inevitable that the
intellectual capital represented by our people will be targeted by competitors
looking to enhance their own capabilities. This occurred more frequently in
2006, reflecting increasing competition for key staff from both the broking and
investment banking sectors. In most cases these efforts were unsuccessful but,
in October, the leader of our Facultative Solutions team resigned along with a
number of colleagues to join a rival. This had an adverse impact on the trading
profit we had anticipated for the International Division in 2006. This was
exacerbated by the timing of the departures as approximately 30% to 40% of
facultative revenues would normally be generated in the last quarter of the
year. Benfield continues to offer customers a full global facultative
capability and since the year end the team has been strengthened with senior
recruits.
Benfield is a cash generative business and we are committed to returning surplus
capital to shareholders when it cannot be profitably invested in Benfield or
selected industry opportunities. Having chosen in 2005 to invest in reinsurance
teams and Benfield Corporate Risk, in 2006 we returned cash to shareholders in
the form of a new #75m share buy-back programme announced in June of which, by
31 December 2006, we had repurchased #59.8m. In contrast to the previous #40m
buy-back programme that started in 2004, this new programme has been partly
financed through a new #100m revolving debt facility. The Board remains
committed to continuing to review the use of surplus cash, including the further
use of debt for share buy-backs where this offers the best available return. In
total during the year, the Group returned #78.3m of cash to shareholders, more
than double the amount returned in 2005.
Throughout the business we remain focused on balancing our commitment to
excellence in service with cost efficiency. Overall growth in costs was lower
than anticipated at 8.9% despite the continued development of Benfield Corporate
Risk's global platform.
The first phase of GRiDS Global, our innovative business processing platform,
was rolled out in 2006. The GRiDS software integrates the whole transaction
process from facilitating sales and management of customer information to
documentation and the processing of premiums and claims. When fully
implemented, GRiDS will give us greater flexibility in managing processing
costs, as well as further enhancing the level of service we offer our customers.
There will be continuing investment in this facility during 2007.
Benfield has also been closely involved with projects aimed at increasing
efficiency in the wider marketplace. For example, we continue to invest in
process and platform change in the London market, specifically by supporting the
G6 group of Lloyd's managing agencies that is working in tandem with Benfield to
streamline distribution through screen-based trading.
During 2006, we made good progress towards the achievement of all of our
strategic objectives. It was particularly encouraging to see the strong growth
in reinsurance broking revenues achieved by both the US Division (up 18.9%) and
the International Division (up 8.9%) against a backdrop of difficult market
conditions. This was one of the many features of our performance that
differentiated Benfield from its competitors in 2006, emphasising the benefit of
the investments made in our core reinsurance broking business in previous years.
TRADING ENVIRONMENT
The record US hurricane losses of 2005 continued to influence the reinsurance
trading environment although the impact was mainly seen in the US market.
Insurers and reinsurers had to respond to changes to catastrophe risk models and
more stringent capital requirements from rating agencies, and many reinsurers
embarked on an extensive re-underwriting of their portfolios in 2006, reflecting
a more rigorous management of aggregate exposures. There was a continued
increase in demand for risk and financial modelling and specialist analytical
services.
As anticipated, there was an acute shortage of property catastrophe capacity for
peak exposures at US mid-year renewals and reinsurance rates for Florida
exposures rose sharply. Approximately US$8 bn of new capital entered the
reinsurance market through short-term alternative capital structures such as
sidecars and catastrophe bonds. Benfield Advisory was again active in this
area. Such vehicles played a key role in US mid-year renewals and continue to
support the retrocession market. By the end of 2006, the upward trend in US
catastrophe rates flattened following the unexpectedly benign hurricane season
and the influx of new capacity. 2005 hurricane losses also adversely affected
reinsurance capacity in Mexico and the Caribbean as well as the availability and
pricing of insurance for Gulf of Mexico energy risks. In contrast to the
reinsurance market, the shortage of capacity for Gulf energy risks did not ease
during the year.
Outside the US, after a relatively stable start to the year, the international
reinsurance market softened during 2006. There was no market-wide re-rating and
although the market remained orderly, in most sectors property rates gave up the
gains of the previous renewal, with the exception of retrocession where capacity
remained limited and pricing high. Competition also increased in the global
casualty market, which also continued to soften.
Reinsurer competition in both property and casualty was fuelled by the drive for
greater diversification, the appetite of newcomers and the determination of
established reinsurers to protect market share. As in previous years, most of
the new reinsurance capital raised was directed through the broker distribution
channel, maintaining the growth of broker distributed capacity relative to
direct (non-brokered) capacity.
FINANCIAL REVIEW
Revenue
Revenue for the year ended 31 December 2006 was #355.3m (2005: #324.1m), an
increase of 9.6%. After adjusting for the effect of movements in currency
exchange rates, revenue increased by 9.4%.
2006 2005 Growth
#m #m %
Revenue
International broking 173.2 159.0 8.9%
US broking 126.2 106.1 18.9%
Reinsurance broking revenue 299.4 265.1 12.9%
Benfield Advisory 10.9 24.7 (55.9)%
Benfield Corporate Risk 17.6 11.4 54.4%
Corporate Investment Group 13.1 13.4 (2.2)%
Total commission and fees 341.0 314.6 8.4%
Interest income 14.3 9.5 50.5%
Total revenue 355.3 324.1 9.6%
International Division
The International Division revenue increased by 10.2% to #180.6m for the year
ended 31 December 2006 from #163.9m for the year ended 31 December 2005. At
constant rates of exchange, revenue increased by 9.0%.
As previously disclosed, the departure of key members of the Facultative
Solutions team in October 2006 had a negative impact on the growth in revenue
and trading profit that had been anticipated following the investment that was
made in this area over the past two years. We remain committed to providing our
customers with a global facultative capability which has been further
strengthened with strategic hires in the UK, US, Australia and Singapore.
Market conditions in most of the territories covered by the International
Division softened during 2006, reflecting a low level of property catastrophe
losses, ample capacity in most sectors and increased competition. Against this
backdrop, new business development across the Division was excellent in both
mature and developing markets. Benfield was successful in winning a major share
of substantial new business to the market including new government catastrophe
schemes as well as securing significant additional revenue from commercial
buyers of reinsurance. Benfield also retained several major global accounts
following competitive tenders. Europe, Asia and Latin America generated double
digit revenue growth and we continued to expand our Asian presence with new
offices in Taiwan and Korea. Global Specialty revenues benefited from demand for
retrocession cover for peak exposures, particularly in the US. New teams in
Credit and Casualty also performed well.
US Division
The US Division revenue increased by 5.1% to #141.3m for the year ended 31
December 2006 from #134.4m for the year ended 31 December 2005. At constant
rates of exchange, revenue increased by 6.1%.
The US Division comprises the core US broking operations together with Benfield
Advisory, the specialist insurance corporate finance and investment advisory
business. Commission and fees earned by the broking business increased by 18.9%
from #106.1m for the year ended 31 December 2005 to #126.2m for the year ended
31 December 2006. Commission and fees earned by Benfield Advisory decreased to
#10.9m for 2006 from #24.7m for 2005.
Benfield Advisory's revenues are inherently concentrated in a handful of large
deals. In 2005, Benfield Advisory was fortunate to generate a very significant
fee on the formation of Lancashire Holdings Limited, a new Bermudian insurer
which listed on the Alternative Investment Market in the UK. While the activity
level, quality of transaction and diversity of transaction were very strong in
2006, no transactions of a similar size were completed in 2006. Excluding the
Lancashire transaction, Benfield Advisory's revenues were up 6.9% year on year,
reflecting continued growth in demand for capital markets expertise in the
reinsurance arena.
Benfield's ability to respond to Florida capacity shortfalls with the creation
of Starbound Re and other innovative solutions, strong new customer sales and
the effect of rate increases contributed to strong growth in broking revenue in
the first half of the year. There was continued growth in demand for Benfield's
risk and financial modelling capabilities as customers sought to reassess their
risk exposures and capital management.
Benfield Corporate Risk
Revenue in the Corporate Risk Division increased by 59.6% from #11.4m for the
year ended 31 December 2005 to #18.2m for the year ended 31 December 2006. Net
costs increased to #35.4m (2005: #21.0m), reflecting the establishment of the
infrastructure for the business which now comprises 196 staff operating from 16
offices worldwide. The trading loss for the period was #17.2m (2005: #9.6m).
As already mentioned, it became evident during the year that Benfield Corporate
Risk would not attain its original break-even objective for 2006. The transfer
of marine, energy and power business from other brokers is taking longer than
expected to emerge, but there were significant new business wins especially in
global ocean-going and supply fleets and in oil exploration and production
companies.
During the year, the services of Benfield Corporate Risk were extended to meet
customer demand for expertise in Directors' and Officers' and Environmental
liabilities and its geographical presence was also broadened with strategic
alliances in China, India, Brazil, Indonesia and the former Soviet Union. In
September 2006 Benfield acquired Parisco AS, a Norwegian marine and energy
insurance broker. This acquisition has already generated new business in the
Norwegian energy sector and has also opened up opportunities elsewhere in the
world.
Synergies between the new Marine, Energy and Power business and existing
businesses in Benfield Corporate Risk are being capitalised upon. For example,
business is being developed from the helicopter and aircraft companies that
serve the logistics of the energy and mining industries. There was pleasing
growth in Space, Aviation and Property and Casualty revenues despite delays in
scheduled satellite launch activity. Benfield Corporate Risk now has a global
operating platform and an improving new business stream, and we remain committed
to its long-term development.
Corporate Investment Group
The role of the Corporate Investment Group (CIG) is to manage the Group's
portfolio of non-core businesses and investments. Following the disposal of
Orbit (an employee benefits company) in April 2006, CIG now consists of Paragon
(a reinsurance administration and asset recovery services company) and certain
industry investments. Following a restructuring during 2006, Paragon's
performance improved significantly and the business moved into profit with
revenue growth of 20%.
CIG's revenue increased from #13.4m to #13.6m for the period, while expenses
reduced from #14.3m to #11.2m, generating a trading result of #2.4m (2005: #0.9m
loss). These results include the benefit of a strong trading period for Orbit
prior to its disposal.
Other operating income
Other operating income reduced to #3.5m in 2006 (2005: #7.2m). This income is
generated from gains on our interests in industry related investments. In 2006
this mainly comprised gains made on the disposal of our investment in Starbound
Re.
Trading result and margin
The Group trading result increased from #63.3m in 2005 to #74.9m in 2006, and
the overall trading margin improved from 19.5% to 21.1%. There was a 9.6%
increase in revenue as described above and an 8.9% increase in general and
administrative expenses.
2006 2005 Growth
#m #m %
General and administrative expenses (i)
Staff costs 200.4 185.7 7.9%
Travel and entertaining 21.4 18.0 18.9%
Premises 19.1 18.1 5.5%
Other 43.0 39.0 10.3%
Total 283.9 260.8 8.9%
(i) Excluding exceptional charges
As anticipated, the overall rate of expense growth reduced significantly in
2006. The growth in staff costs returned to sustainable levels, despite the
competitive pressures for intellectual capital. The continued increase in
travel and entertaining costs includes the first full year of operation of
Benfield Corporate Risk. This level of increase is expected to reduce going
forward. Premises costs also levelled off after investment in additional
premises for Benfield Corporate Risk and Facultative Solutions in 2005.
As the benefits of the investments made in the International Division began to
be realised, the International Division trading result for the year ended 31
December 2006 increased to #39.3m from #32.6m for the year ended 31 December
2005, an increase of 20.6%. The trading margin improved from 19.9% to 21.8%.
The US Division trading result also showed a continuing improvement, increasing
by 10.4% to #55.2m for the year ended 31 December 2006 from #50.0m for the year
ended 31 December 2005, whilst the trading margin increased from 37.2% to 39.1%.
As previously indicated, the trading result for the Benfield Corporate Risk
Division was a loss of #17.2m for the year ended 31 December 2006, compared with
a loss of #9.6m for the year ended 31 December 2005.
The trading result for the Corporate Investment Group shows an improvement for
the year ended 31 December 2006 with a profit of #2.4m compared with a loss of
#0.9m for the year ended 31 December 2005.
Exceptional charges
In the year ended 31 December 2006, the Group's operating expenses included
exceptional charges of #5.8m (2005: #6.9m). These non-recurring expenses
comprised restructuring costs of #4.9m and the final charge for the pre-IPO
share awards granted to employees of #0.9m.
Full details of the exceptional items for the year ended 31 December 2006 are
set out in note 4.
Finance income
Finance income decreased from #7.2m to #0.2m in the year ended 31 December 2006
as a consequence of significant non-recurring income arising in the year ended
31 December 2005. In 2005 the Group benefited from the receipt of a special
dividend from Montpelier Re totalling #1.9m and an unrealised gain of #5.2m on
the revaluation of the holding of Lancashire Holdings Limited warrants.
Finance Costs
Finance costs reflect interest payable on bank borrowings and preference
dividends. In 2006 there were #3.3m of unrealised losses from the revaluation
of the holding of Lancashire warrants, noted above, prior to their disposal.
Profit for the year
Profit before taxation was #53.0m in the year ended 31 December 2006 compared
with #53.8m in the year ended 31 December 2005.
For the year ended 31 December 2006, the Group taxation charge of #14.6m (2005:
#18.9m) represented an effective tax rate of 27.5% (2005: 35.1%). The rate was
impacted by favourable tax settlements for previous periods. Full details of
the tax charge are set out in note 6.
The profit for the financial year, after taxation, increased by 10.0% from
#34.9m in 2005 to #38.4m in 2006.
Earnings per share
Basic earnings per share increased to 17.2p for the year ended 31 December 2006
from 15.5p per share for the year ended 31 December 2005, which reflects the
increase in profit after taxation. Diluted earnings per share increased to
15.9p for the year ended 31 December 2006 from 14.1p for the year ended 31
December 2005. In the year ended 31 December 2006, the Group had 257.7m common
shares in issue on average for the purpose of the calculation of fully diluted
earnings per share (2005: 245.8m).
Dividends
The Board has proposed a final dividend of 8.0p per common share (2005: 7.0p)
which together with the interim dividend of 4.0p per common share (2005: 3.5p)
makes a total dividend for the year of 12.0p per common share (2005: 10.5p).
Foreign exchange
The Group's principal foreign currency exposure is to US dollars, arising from
the results of the US Division, and from revenues earned by the International
Division. Approximately 44% of the International Division's revenues were US
dollar denominated in 2006 (2005: 42%). These are principally earned in the UK.
The Group results are sensitive to the impact of movements in the US dollar
exchange rate, with a 1 cent movement approximately equating to a #0.6m movement
in trading result, prior to the impact of any foreign exchange hedging activity.
In the UK, the Group enters into foreign currency contracts (including
derivative options) to manage the impact of currency risk on trading results.
The Group's policy is to hedge a minimum of 50% of the forecast exposure prior
to each financial year for each of its principal UK trading currencies and at
least 25% of forecast exposure for the following financial year, dependent upon
prevailing market conditions.
The Group does not actively hedge the results of the overseas subsidiaries.
Group borrowings provide an economic hedge against the principal overseas assets
of the Group, which are denominated in US dollars.
Liquidity and Capital Resources
Net debt rose to #47.0m as at 31 December 2006, compared to net cash of #11.0m
at the end of the prior year. Net debt comprises available corporate funds of
#43.3m less borrowings of #90.3m. During the year the Group replaced its credit
facilities with a #100m multi-currency revolving loan facility, available until
March 2011.
During the year the Group repaid #14.4m of borrowings, representing term loan
repayments of the prior facility, and has drawn down #50.5m of borrowings on the
revolving facility at 31 December 2006. The Group completed the share buy-back
programme announced in 2004 and subsequently announced that it had set aside a
further #75m to support a second share buy-back programme. In total #68.1m of
shares was repurchased in the year. Combined with common share dividends of
#24.7m, less proceeds from share issuance of #14.5m, the Group returned #78.3m
of cash to common shareholders during the year, compared to #31.1m in the prior
year.
The Group expects to finance operations, capital expenditure and acquisitions
from operating cashflow and the revolving facility where required. The Group's
cashflow statement is set out on page 16.
OUTLOOK
Marketplace
Reinsurance market conditions began to change markedly during the second half of
2006, reflecting the unexpectedly benign hurricane season experienced in the US
and the continued inflow of new capital. In the US, rates for January 2007
property catastrophe renewals were significantly higher than the previous year
but below previous expectations and there was adequate capacity for most
exposures.
After the January 2007 renewals, the State Government of Florida announced
legislation extending the scope of the Florida Hurricane Catastrophe Fund
(FHCF). This has created both challenges and opportunities for Benfield. The
extension of the FHCF is expected to reduce the amount of reinsurance bought by
insurers underwriting homeowners business in Florida, which in turn is likely to
reduce the revenue Benfield earns from Florida-related business in 2007 compared
to 2006, although the full extent of any impact on US revenues will not be clear
until later in the year. However, the enlarged FHCF will not provide sufficient
catastrophe coverage to meet the needs of many buyers and our US team is working
closely with customers to help them determine their response to the complex risk
issues raised by the FHCF expansion. There is high demand for access to
Benfield's recognised expertise in the Florida market and we remain committed to
serving our customers there for the long-term.
The greater capacity made available by the expansion of the FHCF is likely to
increase competitive pressures elsewhere in the reinsurance market as reinsurers
seek to replace premium flow anticipated from Florida. This may accelerate the
downward trend in pricing already seen in non-loss affected markets and affect
global demand for certain lines such as retrocession. Additional capacity may
emerge in the commercial catastrophe reinsurance market and could be redirected
to the Gulf energy market.
Business Strategy and Outlook
The excellent results achieved by the core broking businesses in 2006 again
demonstrated the strength of Benfield's reinsurance broking franchise. We will
continue to work with our customers to seek solutions to the challenges of a
rapidly changing market-place. It is evident that these solutions will
increasingly involve capital markets thinking and expertise. Benfield is
particularly well placed to meet these needs given the capabilities and track
record of Benfield Advisory in this area.
The potential impact of Florida legislation has inevitably reduced our
reinsurance broking revenue growth expectations for 2007. Reported revenue
growth will also be adversely affected if the US dollar exchange rate remains at
current levels. Given these factors, we anticipate that reported trading profit
for 2007 will be at a similar level to 2006.
We continue to keep our capital requirements under review and will give proper
consideration to further share buy-backs and leverage as the year progresses.
The current insurance and reinsurance market-place offers many opportunities for
profitable development and I remain confident that the business is well
positioned for further long-term growth.
BENFIELD GROUP LIMITED
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2006
(Audited)
Notes 2006 2005
#'000 #'000
Commission and fees 340,985 314,614
Interest income 14,307 9,455
Total revenue 2 355,292 324,069
Other operating income 3,534 7,186
Operating expenses 3 (289,704) (267,636)
Depreciation, amortisation and impairment charges (8,982) (10,294)
Operating profit 60,140 53,325
Analysed as:
Trading result 74,901 63,289
Depreciation, amortisation and impairment charges (8,982) (10,294)
Exceptional items 4 (5,779) 330
Operating profit 60,140 53,325
Finance income 5 191 7,192
Finance costs 5 (7,331) (5,447)
Share of losses of associated undertakings after taxation (32) (1,225)
Profit before taxation 52,968 53,845
Taxation 6 (14,544) (18,975)
Profit for the financial year 38,424 34,870
Attributable to:
Equity holders of the Company 38,343 34,714
Minority interest 81 156
38,424 34,870
Earnings per 1p common share
Basic 7 17.18p 15.53p
Diluted 7 15.86p 14.12p
Dividends per 1p common share
Interim paid 8 4.0p 3.5p
Final proposed 8 8.0p 7.0p
12.0p 10.5p
BENFIELD GROUP LIMITED
CONSOLIDATED BALANCE SHEET
As at 31 December 2006
(Audited)
ASSETS Notes 2006 2005
#'000 #'000
Non-current assets
Goodwill 155,284 161,851
Intangible assets 20,715 11,938
Property, plant and equipment 14,385 10,670
Investment in associated undertakings - 32
Financial assets 23,481 41,515
Deferred tax assets 6,170 14,991
220,035 240,997
Current assets
Trade and other receivables 9 77,741 65,064
Financial assets 12,751 745
Current tax recoverable 180 189
Cash and cash equivalents 43,261 64,995
133,933 130,993
Fiduciary financial assets 15,313 17,339
Fiduciary cash and cash equivalents 200,968 184,496
350,214 332,828
LIABILITIES
Current liabilities
Trade and other payables 10 61,066 72,428
Insurance broking creditors 216,281 201,835
Financial liabilities 11 586 16,098
Current tax liabilities 31,310 35,548
Provisions 12 6,849 4,513
316,092 330,422
Net current assets 34,122 2,406
Non-current liabilities
Trade and other payables 10 1,413 921
Financial liabilities 11 90,271 39,622
Provisions 12 3,684 2,590
95,368 43,133
Net assets 158,789 200,270
SHAREHOLDERS' EQUITY
Share capital 13 2,277 2,345
Share premium 146,859 138,181
Treasury shares (17,605) (10,252)
Fair value and other reserves 93,145 103,787
Retained earnings (65,951) (34,332)
Total shareholders' equity 14 158,725 199,729
Minority interest in equity 64 541
Total equity 158,789 200,270
BENFIELD GROUP LIMITED
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSES
For the year ended 31 December 2006
(Audited)
2006 2005
#'000 #'000
Currency translation adjustments (15,665) 12,874
Actuarial loss in defined benefit scheme (238) (199)
Deferred tax on actuarial loss 93 78
Fair value losses on revaluation of available-for-sale (120) (4,362)
financial assets
Deferred tax on revaluation of available-for-sale financial 36 1,309
assets
Fair value gains/(losses) on cash flow hedges 7,066 (915)
Deferred tax on fair value gains/(losses) on cash flow hedges (2,240) 274
Net (loss)/income recognised directly in equity (11,068) 9,059
Profit for the financial year 38,424 34,870
Total recognised income for the financial year 27,356 43,929
Attributable to:
Equity holders of the Company 27,362 43,737
Minority interest (6) 192
27,356 43,929
BENFIELD GROUP LIMITED
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2006
(Audited)
2006 2005
Corporate Fiduciary Total Corporate Fiduciary Total
#'000 #'000 #'000 #'000 #'000 #'000
Cash flows from operating activities
Cash generated from operations (note 15) 51,469 32,236 83,705 57,150 33,088 90,238
Interest received 14,307 - 14,307 9,455 - 9,455
Taxation paid (6,735) - (6,735) (19,623) - (19,623)
Net cash generated by operating 59,041 32,236 91,277 46,982 33,088 80,070
activities
Cash flows from investing activities
Acquisition of subsidiaries, net of cash (14,538) - (14,538) (3,184) - (3,184)
acquired
Proceeds from disposal of subsidiaries, 612 - 612 - - -
net of cash
Purchases of intangible assets (7,298) - (7,298) (9,529) - (9,529)
Purchases of property, plant and (7,643) - (7,643) (3,393) - (3,393)
equipment
Proceeds from sale of property, plant 218 - 218 113 - 113
and equipment
Increase in investments in associates - - - (1,575) - (1,575)
Proceeds from disposal of associates - - - 350 - 350
Purchases of financial assets (13,261) - (13,261) (8,099) (1,724) (9,823)
Proceeds from sale of financial assets 22,841 2,026 24,867 18,049 - 18,049
Dividends received 191 - 191 2,018 - 2,018
Net cash used in investing activities (18,878) 2,026 (16,852) (5,250) (1,724) (6,974)
Cash flows from financing activities
Net proceeds from issue of common shares 14,484 - 14,484 1,611 - 1,611
Proceeds from sale of own shares 918 - 918 - - -
Repurchase of common shares (79,534) - (79,534) (9,284) - (9,284)
Proceeds from borrowings 50,464 - 50,464
Repayments of borrowings (14,357) - (14,357) (27,500) - (27,500)
Finance costs (3,655) - (3,655) (5,619) - (5,619)
Dividends paid to Company's shareholders (24,686) - (24,686) (23,407) - (23,407)
Dividends paid to minority interests (471) - (471) - - -
Net cash used in financing activities (56,837) - (56,837) (64,199) - (64,199)
Net (decrease)/ increase in cash and (16,674) 34,262 17,588 (22,467) 31,364 8,897
cash equivalents
Cash and cash equivalents at 1 January 64,995 184,496 249,491 84,668 141,590 226,258
Exchange (losses)/gains on cash and cash (5,060) (17,790) (22,850) 2,794 11,542 14,336
equivalents
Cash and cash equivalents at 31 December 43,261 200,968 244,229 64,995 184,496 249,491
BENFIELD GROUP LIMITED
NOTES TO THE PRELIMINARY RESULTS
For the year ended 31 December 2006
1. BASIS OF PREPARATION
The Company is obliged to prepare its financial statements in accordance with
the Bermuda Companies Act 1981, which permits a company to prepare its financial
statements under International Financial Reporting Standards ("IFRS").
Accordingly, the consolidated financial statements have been prepared in
accordance with Bermuda law, under the historic cost convention as modified by
the revaluation of available-for-sale investments and derivative financial
instruments, and in accordance with IFRS and International Financial Reporting
Interpretations Committee ("IFRIC") interpretations endorsed by the European
Union.
2. SEGMENTAL REPORTING
Primary reporting format - Business segments
Based on risks and returns, the Directors consider that the Group had only one
business segment during the year ended 31 December 2006, which provides
reinsurance and insurance intermediary, risk advisory and related services.
Therefore the disclosure for the primary segment has already been given in these
financial statements.
Division analysis
The Group manages its core intermediary business on the basis of three operating
divisions: International, US and Benfield Corporate Risk. The International
Division incorporates business emanating from customers located outside the US
together with revenues from certain specialty lines which operate on a global
basis. The US Division encompasses the Group's business emanating from customers
located in mainland US, excluding revenues from those global specialty lines,
and also includes the Group's corporate finance and investment advisory
businesses. Benfield Corporate Risk incorporates business emanating from
corporate insurance customers globally. The non-operating areas of the business
include the Corporate Investments Group, which manages the Group's portfolio of
non-core businesses and investments, and the Group Services Division which
controls expenses incurred in connection with the provision of head office and
group related activities. The analysis of revenue and trading result by division
is presented below by way of additional information:
2006 2005
Revenue Trading Revenue Trading
result result
#'000 #'000 #'000 #'000
International 180,552 39,300 163,913 32,592
US 141,345 55,229 134,445 50,030
Benfield Corporate Risk 18,246 (17,246) 11,377 (9,598)
Corporate Investment Group 13,565 2,358 13,426 (885)
Group Services 1,584 (4,740) 908 (8,850)
355,292 74,901 324,069 63,289
3. OPERATING EXPENSES
2006 2005
#'000 #'000
Staff costs 203,725 188,616
Travel and entertaining 21,369 17,974
Premises 21,065 21,287
Other 43,545 39,759
289,704 267,636
Included within operating expenses are certain exceptional items as described in
note 4.
4. EXCEPTIONAL ITEMS
2006 2005
#'000 #'000
Other operating income
Gain on sale of available-for-sale financial assets - 7,186
Operating expenses
Restructuring costs (4,934) -
Awards granted to employees (845) (2,964)
Vacant property provision - (3,200)
Loss on disposal of subsidiary operations - (692)
(5,779) (6,856)
Exceptional items (net) (5,779) 330
Gain on sale of available-for-sale financial assets
The gain in 2005 relates predominantly to the disposal of long-term investments
in Montpelier Re Holdings Limited ("Montpelier Re") and Wildcard Systems Inc. ("
Wildcard"). In June 2005, the Group disposed of its entire shareholding in
Wildcard resulting in a gain of #2,322,000. In July 2005, the Group disposed of
its entire holding of Montpelier Re shares which resulted in a gain of
#4,537,000.
Restructuring costs
During 2006, the Group's US head office function was relocated from Westport to
Minneapolis. A charge of #2,422,000 has arisen as a consequence of the
associated redundancy and property rationalisation costs.
In October 2006, the Group announced the resignation of a number of senior
members of its Facultative Solutions team. As a result of these resignations,
the Group found it necessary to initiate processes to protect its business
interests, including legal proceedings and the enforcement of employee
contractual obligations. A charge of #2,512,000 has been incurred in respect of
the associated legal costs and residual salary costs.
Awards granted to employees
In March 2003 share based awards were made under the 2002 Incentive Plan to
certain key employees of the Group in respect of services provided prior to the
Company's Initial Public Offering. No previous awards had been made under the
2002 Incentive Plan and the plan ceased to be available for the issue of new
awards with effect from June 2003. In accordance with IFRS, the cost of these
awards was spread over the 12 to 36 month vesting period from the date of grant.
Vacant property provision
The charge in 2005 relates to an anticipated one-off cost to the Group of the
early termination of a lease on a vacant property in the UK.
Loss on disposal of subsidiary operations
In 2005 Catixl SAS, a wholly owned subsidiary of the Group, ceased to trade.
Consequently, the carrying value of the Group's interest in Catixl SAS has been
written down to the recoverable amount, resulting in a loss of #692,000.
5. FINANCE INCOME AND COSTS
2006 2005
#'000 #'000
Finance income:
Dividends from investments 191 2,018
Fair value gains on equity derivatives - 5,174
191 7,192
Finance costs:
Interest payable on bank borrowings (1,277) (1,800)
Other interest payable (165) (1,121)
CRCP dividends (2,400) (2,400)
Amortisation of issue costs of CRCPs (126) (126)
Fair value losses on equity derivatives (3,277) -
Fair value losses on foreign currency derivatives (86) -
(7,331) (5,447)
Fair value gains/losses on equity derivatives arising in both 2005 and 2006
relate to the Group's holding of Lancashire Holdings Limited warrants, which was
disposed of during the year.
6. TAXATION
Major components of tax expense
2006 2005
#'000 #'000
Current tax:
UK corporate tax on income for the period 5,296 16,338
Foreign tax on income for the period 6,734 9,465
Adjustments in respect of previous periods (5,058) (1,380)
6,972 24,423
Deferred tax:
Relating to the origination and reversal of temporary differences 7,572 (5,448)
Total tax expense 14,544 18,975
The adjustment in respect of previous periods in 2006 relates to favourable tax
settlements.
Tax on items charged to equity
2006 2005
#'000 #'000
Deferred tax credit on actuarial loss (93) (78)
Deferred tax charge/(credit) on exchange movements to hedging reserve 2,240 (274)
Deferred tax credit on available-for-sale investments (36) (1,309)
Deferred tax credit on share awards (1,485) (1,700)
626 (3,361)
Current tax credit on share awards (4,972) -
Taxation for each of the periods 2006 and 2005 differs from the standard rate of
corporation tax in the UK of 30%. The differences are explained below:
2006 2005
#'000 #'000
Profit before taxation 52,968 53,845
Profit multiplied by the standard rate of corporation tax in the UK of 30% 15,890 16,154
Effect of:
Expenses not deductible for tax purposes (includes goodwill impairment and 2,736 4,198
preference dividend)
Adjustments in respect of foreign tax rates 1,564 1,311
Adjustments in respect of share awards (348) (719)
Adjustments to tax in respect of prior periods (5,600) (1,425)
Utilisation of unrecognised losses 856 (927)
Profit on disposal of subsidiary operations not taxable (517) -
Other (37) 383
14,544 18,975
7. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable to
common shareholders by the weighted average number of common shares in issue
during the year, excluding those held in the employee share trusts which are
treated as cancelled.
For diluted earnings per share, the weighted average number of common shares in
issue, excluding those held in the employee share trusts, is adjusted to assume
conversion of all dilutive potential common shares. The Company has the
following three classes of shares which were potentially dilutive:
(i) cumulative redeemable convertible preference shares;
(ii) those share awards granted to employees where the exercise price is
less than the quoted price of the Company's common shares during the relevant
year; and
(iii) deferred share units.
Supplementary basic and diluted earnings per share have been calculated to
exclude the effect of goodwill impairment and exceptional items. The adjusted
numbers have been provided in order that the effects of these charges on
reported earnings can be fully appreciated.
2006 2005
Earnings Weighted Pence per Earnings Weighted Pence per
average number share average number share
#'000 of shares #'000 of shares
Unadjusted earnings per share
Basic earnings per share
Earnings attributable to common 38,343 223,216,949 17.18 34,714 223,571,360 15.53
shareholders
Effect of dilutive securities:
Share options 14,822,282 (1.07) 18,643,954 (1.20)
Deferred share units 3,693,903 (0.24) 3,588,877 (0.21)
Cumulative redeemable convertible 2,526 16,000,000 (0.01) - - -
preference shares
Diluted earnings per share 40,869 257,733,134 15.86 34,714 245,804,191 14.12
Adjusted earnings per share
Basic earnings per share 38,343 223,216,949 17.18 34,714 223,571,360 15.53
Goodwill impairment - - 3,061 1.37
Exceptional items 5,779 2.59 (330) (0.15)
Tax on impairment and exceptional items (1,976) (0.89) (466) (0.21)
Basic earnings per share excluding 42,146 223,216,949 18.88 36,979 223,571,360 16.54
goodwill impairment and exceptional
items
Diluted earnings per share 40,869 257,733,134 15.86 34,714 245,804,191 14.12
Goodwill impairment - - 3,061 1.25
Exceptional items 5,779 2.24 (330) (0.14)
Tax on impairment and exceptional items (1,976) (0.77) (466) (0.19)
Diluted earnings per share excluding 44,672 257,733,134 17.33 36,979 245,804,191 15.04
goodwill impairment and exceptional
items
Potentially dilutive securities totalling 16,000,000 common shares of 1p each in
respect of cumulative redeemable convertible preference shares have not been
included in the determination of unadjusted and adjusted earnings per share in
2005, as their inclusion would be anti-dilutive.
8. DIVIDENDS
2006 2005
#'000 #'000
Final paid in respect of 2005 - 7.0p (2004: 7.0p) per common share of 1p 15,801 15,691
Interim paid in respect of 2006 - 4.0p (2005: 3.5p) per common share of 1p 8,885 7,716
24,686 23,407
Dividends amounting to #242,000 (2005: #262,000) in respect of the Company's
common shares held by employee share trusts have been deducted in arriving at
the aggregate of dividends paid.
A final dividend in respect of 2006 of 8.0p per share (2005: 7.0p) is proposed
by the Directors. If approved the final dividend will be paid on 2 May 2007 to
shareholders who were registered at the close of business on 30 March 2007.
9. TRADE AND OTHER RECEIVABLES
2006 2005
#'000 #'000
Trade debtors 65,331 52,681
Less provision for bad debts (6,047) (8,789)
Trade debtors - net 59,284 43,892
Amounts due from associated undertakings 389 331
Other debtors 7,299 7,182
Prepayments and accrued income 10,769 13,659
77,741 65,064
10. TRADE AND OTHER PAYABLES
2006 2005
#'000 #'000
Current liabilities
Trade creditors 7,978 9,539
Social security payable 3,806 4,661
Retirement benefit obligations 611 523
Other creditors and accruals 48,671 57,705
61,066 72,428
Non-current liabilities
Other creditors and accruals 1,413 921
62,479 73,349
11. FINANCIAL LIABILITIES
2006 2005
#'000 #'000
Current
Unsecured bank loans - 14,381
Derivative instruments 586 1,717
586 16,098
Non-current
Unsecured bank loan 50,523 -
Cumulative redeemable convertible preference shares 39,748 39,622
90,271 39,622
Bank loans
The group cancelled and replaced its #125 million credit facility on 31 March
2006. The new facility is a #100 million revolving multi-currency facility,
which is available until 31 March 2011. The rate of interest payable on any
loans drawn fluctuate in line with the current LIBOR rate, plus a margin.
The fair value of bank loans reflects the loan principals drawn at 31 December
2006 (#10 million pounds sterling: $80 million US dollars) and 31 December 2005
($25 million US dollars) respectively, adjusted for any unamortised arrangement
fees.
12. PROVISIONS
Litigation Property Other Total
and disputes related
#'000 #'000 #'000 #'000
At 1 January 2006 1,013 5,090 1,000 7,103
Exchange adjustments (40) (73) - (113)
Transfer from income statement 1,732 1,688 1,916 5,336
Transfer from fixed assets - 1,050 - 1,050
Utilised in year (1,448) (395) (1,000) (2,843)
At 31 December 2006 1,257 7,360 1,916 10,533
Provisions have been analysed between current and non-current as follows:
2006 2005
#'000 #'000
Current 6,849 4,513
Non-current 3,684 2,590
10,533 7,103
13. CALLED UP SHARE CAPITAL
2006 2005 2006 2005
Number Number #'000 #'000
Authorised
Common shares of 1p 500,000,000 500,000,000 5,000 5,000
Allotted, called up and fully paid
At 1 January 234,555,001 235,543,704 2,345 2,355
Repurchased and cancelled (19,435,984) (3,425,000) (194) (34)
Allotted to employees 12,577,785 2,436,297 126 24
At 31 December 227,696,802 234,555,001 2,277 2,345
Changes to share capital during the year to 31 December 2006
During the year, 19,435,984 (2005: 3,425,000) common shares of 1p each,
representing 8.3% (2005: 1.5%) of the issued share capital of the Company, were
repurchased for an aggregate consideration, including expenses, of #68,119,000
(2005: #9,284,000) and were subsequently cancelled.
A total of 10,613,235 (2005: 1,546,654) common shares of 1p each were allotted
on the exercise of options by employees during the year for an aggregate
consideration of #8,784,000 (2005: #1,611,000). A total of 1,952,450 (2005:
889,643) common shares of 1p each were allotted to satisfy deferred share units
that vested and were distributed to employees during the year. A total of 12,100
(2005: nil) common shares of 1p each were gifted to new employees during the
year.
14. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Share Share premium Treasury Fair value Retained Total
capital shares and other earnings
#'000 reserves #'000
#'000 #'000 #'000
#'000
At 1 January 2005 2,355 136,585 (10,284) 94,730 (50,375) 173,011
Total recognised income for the period - - - 9,023 34,714 43,737
Dividend - - - - (23,407) (23,407)
Provision for share awards - - - - 13,975 13,975
Shares issued to employees 24 1,596 32 - 45 1,697
Repurchase and cancellation of own (34) - - 34 (9,284) (9,284)
shares
At 31 December 2005 2,345 138,181 (10,252) 103,787 (34,332) 199,729
Total recognised income for the period - - - (10,836) 38,198 27,362
Dividend - - - - (24,686) (24,686)
Provision for share awards - - - - 20,332 20,332
Shares issued to employees 126 8,678 3,626 - 2,174 14,604
Repurchase and cancellation of own (194) - - 194 (68,119) (68,119)
shares
Purchase of treasury shares - - (11,415) - - (11,415)
Proceeds on disposal of own shares - - 436 - 482 918
At 31 December 2006 2,277 146,859 (17,605) 93,145 (65,951) 158,725
Cumulative goodwill relating to acquisitions made prior to 1 January 1998, which
has been eliminated against reserves, amounted to #110,725,000 as at 31 December
2006 and 2005.
15. CASH FLOW FROM OPERATING ACTIVITIES
Reconciliation of profit to net cash inflow from operating activities:
2006 2005
#'000 #'000
Continuing operations
Profit for the financial year 38,424 34,870
Adjusted for:
Taxation 14,544 18,975
Depreciation, amortisation and impairment charges 8,982 10,294
Fair value gains through income statement (396) (5,222)
(Gain)/loss on disposal of subsidiary operations (311) 692
Gain on sale of available-for-sale financial assets (3,020) (7,186)
Loss on disposal of property, plant and equipment 5 -
Cost of shares gifted during the year 120 86
Cost of share options issued 13,875 13,975
Interest income (14,307) (9,455)
Investment income (191) (7,192)
Finance costs 7,331 5,447
Share of losses of associated undertakings 32 1,225
Increase in trade and other receivables (11,549) (27,932)
Increase/(decrease) in payables (10,251) 22,916
Increase in provisions 3,493 2,681
Exchange translation differences 4,688 2,976
Corporate cash generated from operations 51,469 57,150
Increase in insurance broking creditors 14,446 44,630
Exchange translation differences 17,790 (11,542)
Cash generated from operations 83,705 90,238
16. CONTINGENCIES
Lloyd's New Central Fund Arbitration
In April 2003, the Society of Lloyd's ("Lloyd's") commenced arbitration
proceedings against six insurers for recovery of claims of approximately #500
million made under an insurance contract to support the New Central Fund ("the
NCF Insurance"). The NCF Insurance was placed by the Company's UK subsidiary,
Benfield Limited, together with another broker.
In January 2005, the Arbitration Panel ("Panel") made a partial award in
response to the dispute between Lloyd's and one of the insurers, Swiss Re. It
found in favour of Lloyd's on the issue of proper interpretation of the wording
of the policy. However, it was also found that with respect to the presentation
of the risk, Swiss Re was prima facie entitled to avoid the policy. In March
2005, after the conclusion of the second part of the hearing of the Arbitration
Panel, but before the Panel delivered a final award, Lloyd's reached a
settlement with all six insurers. Lloyd's press announcement dated 14 March
2005 stated that the settlement was on terms that the insurers pay Lloyd's a
total of #152 million.
On 6 March 2006, Lloyd's served proceedings against Aon and Benfield to recover
its insurance shortfall of #325 million. The company served its Defence on 6
July 2006 and intends to defend Lloyd's claim vigorously. The Court hearing in
relation to this matter is due to commence in January 2008. The Company has
taken advice from leading counsel, and on the basis of legal advice it has
received, the Company takes the view that this matter will not result in
material liability to it.
Litigation and disputes
In certain circumstances, the Group acts to defend its business interests
including the pursuit of legal actions where appropriate. The Group expects to
achieve success in these circumstances in future periods, although the amount
and timing of any recoveries is uncertain.
17. SHAREHOLDER INFORMATION
The financial information contained in this preliminary announcement does not
constitute statutory accounts within the meaning of s84 of the Bermuda Companies
Act 1981 or s240 of the United Kingdom Companies Act 1985. Statutory accounts
will be posted to shareholders no later than 24 March 2006.
The auditors have reported on the statutory accounts in accordance with the
requirements of s90 of the Bermuda Companies Act 1981. Their report was
unqualified and did not contain an emphasis of matter paragraph as defined by
International Standard on Auditing (UK and Ireland) 700.
The shareholders entered in the Register of Members on 31 March 2007 will be
entitled to the proposed final dividend of 8.0p per common share which will,
subject to approval at the Annual General Meeting to be held on 24 April 2007,
be payable on 2 May 2007.
Copies of the preliminary press release (and statutory accounts when available)
may be obtained from the Company Secretariat, Benfield Group Limited, 55
Bishopsgate, London, EC2N 3BD.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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