Printer Friendly

WILLIS CORROON GROUP plc ANNOUNCES RESULTS FOR THE YEAR ENDED 31 DECEMBER 1991

 WILLIS CORROON GROUP plc ANNOUNCES RESULTS
 FOR THE YEAR ENDED 31 DECEMBER 1991
 NASHVILLE, Tenn., March 11 /PRNewswire/ -- Willis Corroon Group plc has reported results for the year ended Dec. 31, 1991.
 1991 1991 1990 Change
 (US$)(A) (pounds sterling)
 $1,222.2m Operating revenue 653.6m 451.2m 45pct.
 $179.7m Profit before tax 96.1m 81.7m 18pct.
 $120.6m Profit after tax 64.5m 52.7m 22pct.
 (A) For convenience, sterling figures have been translated into U.S. dollars at the year-end rate of $1.87 equals 1 pound sterling.
 1991 Results
 The Group's pre-tax profits in 1991 were 96.1 million pounds sterling, 18 percent higher than those published for 1990; profits after tax have increased 22 percent to 64.5 million pounds sterling. 1990's published results included those for the former Corroon & Black Corporation from 8 October 1990, the date of the merger.
 Comparing the year's results with those for 1990 on a pro forma basis (i.e., including those for Corroon & Black Corporation for the whole year), against which all ensuing figures will be compared, our pre-tax profits have declined by 8 percent; profits after tax were reduced by 4 percent and earnings per share by 5 percent.
 During 1991 dividends were paid totalling 13.2p net per share (17.6p gross), equal to the total dividend paid in 1990. The directors have declared a first interim dividend for 1992 of 3.3p per share.
 Broking and consulting operations
 The brokerage and fee revenue of our principal broking and consulting activities rose by 7 percent; in underlying terms, eliminating the effects of exchange rate movements and of acquisitions and disposals, the growth was 4 percent.
 Operating expenses of these businesses grew by 9 percent. During the year these expanses included those of a number of acquisitions and other strategic investments, as well as other one-off expenditure on subjects such as rationalisation and redundancies. After elimination of the effect of these and of exchange rate movements, the underlying rate of growth of operating expenses was 4 percent.
 Lower interest rates and the investment of funds in the long-term future of the business, offset by higher operational cash flow, reduced net investment income by 6.6 million (11 percent) pounds sterling.
 Underwriting
 The pre-tax profits from the Group's underwriting businesses totalled 10.5 million pounds sterling, with a strong contribution from our North American insurance subsidiaries.
 Our UK underwriting operations developed out of underwriting agencies started in the last century for prominent overseas clients of the Group, which we supported with our own insurance subsidiary, Sovereign, acquired in 1922. The needs of our clients have changed over time and continuation of an underwriting operation in the London market is no longer required.
 Our 1991 profits include an element of the results of the UK underwriting operations before the decision to discontinue them was taken and implemented; this amounted to a loss of 5.6 million pounds sterling before tax, compared with a loss for the whole of 1990 of 8.2 million pounds sterling.
 Extraordinary item
 The Group's results include an extraordinary item of 55.9 million pounds sterling (37.1 million pounds sterling after tax) comprising losses arising since the date of implementing the decision to withdraw from UK underwriting, including provision for all known and anticipated claims and handling costs.
 Offsetting this are extraordinary credits totalling 29.3 million pounds sterling after tax arising from the release of a tax provision on the disposal in 1989 of our interest in Morgan Grenfell and the profit on sale of 20 percent of our former Canadian associate company.
 Exchange rates
 We have pursued our policy of protecting our earnings from exchange rate movements by forward sales of the foreign currency revenues of our UK companies; this policy has limited to 3.6 million pounds sterling the adverse effect on our profits of exchange rate movements from those achieved in the previous year, and has benefited them by 5.8 million pounds sterling compared with selling currency revenues at average "spot" rates.
 Statement by Chairman Roger Elliott
 and Chief Executive Richard Miller
 "The Group has moved forward steadily in 1991, making excellent progress with the implementation of the 1990 merger. At the same time we have continued to operate in the difficult environment to which we drew attention a year ago in our subsequent quarterly reports. We have entered 1992 with the organisational structure and worldwide resources of people and expertise to enable the Group to provide the comprehensive global service which our clients require."
 The Group's progress in 1991
 "A key objective of the Group continues to be the development of our ability to meet the worldwide requirements of our multinational clients. We have now established, in Europe and elsewhere around the world, a network of offices, in which the Group has equity interests, where there are teams of professionals with the same high standards as are found throughout the Group. Through this network we can fully satisfy the increasingly complex needs of our multinational clients and, at the same time, build our businesses in those countries.
 "In addition, we have made a number of strategic investments in developing the Group's service capability in the United States. We have established ourselves as leaders in three key areas of corporate activity -- marine and energy, aerospace, and financial institutions -- with teams located in major centres across the USA providing comprehensive risk management services to clients in these industries; these teams work closely with their counterparts in our London operations, linking strengths identified at the time of the merger to utilise to the full the capacity and creativity of the world's markets for handling the risks of these activities."
 Our future
 "We have now completed the major part of our investment for the future in retail broking and risk management. In 1992 and for the next few years we shall build on these foundations to develop and improve our service to our clients and to raise profitability. Investment will continue in information technology, which we know to be vital to both those objectives. In the London market we regard it as essential to be among the leaders in the moves towards the introduction of electronic broking networks, and Group staff are heading market developments.
 "Conditions in the world's insurance markets are changing. In the reinsurance and specialist lines for which the London market is the focus, underwriters have been obtaining substantial increases in premium while, in many cases, severely reducing capacity. Rates for direct corporate risks in the UK have firmed. Similar business in the USA continues to be the subject of fierce competition between insurers leading to continuing rate reductions, to which process no end is currently visible.
 "About 15 percent of the premium income handled by the Group's broking operations is placed in Lloyd's, the future competitiveness and prosperity of which are important to us.
 "The Group is now the right shape for the foreseeable future. We have a worldwide presence in direct risk management and insurance broking. We intend to maintain our strength and to consolidate our international position of leadership in reinsurance broking. We intend to develop further our employee benefits and human resource consultancy business. We believe that these three business streams from the core of a cohesive service to our clients for which we see a growing demand, which will provide excellent careers for our staff and competitive returns for our shareholders."
 WILLIS CORROON GROUP plc
 UNAUDITED CONSOLIDATED PROFIT & LOSS ACCOUNT
 for the year ended 31 December 1991
 1991 1991 1990
 US$m(A) (million pounds sterling)
 1,094.5 Turnover 585.3 376.0
 127.7 Interest and investment income 68.3 75.2
 1,222.2 Operating revenue 653B 451.2
 (982.9) Operating expenses (525.6) (319.0)
 (61.7) Underwriting claims ( 33.0) ( 49.2)
 177.6 Operating profit 95.0 83.0
 9.4 Share of profit of associated 5.0 5.1
 undertakings
 (7.3) Interest payable (3.9) (6.4)
 179.7 Profit on ordinary activities 96.1 81.7
 before taxation
 (59.1) Tax on profit on ordinary (31.6) (29.0)
 activities
 120.6 Profit on ordinary activities 64.5 52.7
 after taxation
 (0.7) Minority interests (0.4) (0.7)
 119.9 Profit before extraordinary items 64.1 52.0
 (14.6) Extraordinary items (7.8) --
 105.3 Profit for the financial year 56.3 52.0
 (100.0) Dividends (53.5) (36.2)
 5.3 Profit retained 2.8 15.8
 29.5 Earnings per share 15.8p 18.9p
 Average number of shares in
 issue (millions) 405.5 274.8
 (A) Results for the year ended 12/31/91 have been translated into U.S. dollars at the year end rate of US$1.87 equals 1 pound sterling. No adjustments have been made to restate the results to comply with U.S. generally accepted accounting principles.
 Notes
 1. Accounting Presentation
 The results for the year ended 31 December 1991 have been
 prepared on the basis of the accounting policies set out in the
 1990 Annual Report.
 2. Segmental Analysis
 Year ended
 31 December
 1991 1991 1990
 US$m (million pounds sterling)
 Operating Revenue
 1,108.9 Broking activities 593.0 371.2
 113.3 Underwriting activities 60.6 80.0
 1,222.2 653.6 451.2
 524.9 United Kingdom 280.7 304.0
 644.6 United States of America 344.7 127.6
 52.7 Rest of the world 28.2 19.6
 1,222.2 653.6 451.2
 Operating Profit
 157.6 Broking activities 84.3 82.0
 20.0 Underwriting activities 10.7 1.0

 177.6 95.0 83.0
 97.0 United Kingdom 51.9 60.5
 67.7 United States of America 36.2 18.6
 12.9 Rest of the world 6.9 3.9
 177.6 95.0 83.0
 3. Extraordinary Items
 Year ended
 31 December
 1991 1990
 (million pounds sterling)
 Cessation of UK Underwriting
 activities(i) (55.9) --
 Surplus on sale of associated
 undertakings 3.0 --
 (52.9) --
 Tax relief 18.2 --
 Release on provision for tax on
 capital gains(ii) 26.9 --
 (7.8) --
 (i) The extraordinary item comprises losses arising since the
 date of implementing the decision to withdraw from UK
 underwriting, including provision for all known and
 anticipated claims and handling costs.
 (ii) Provision was made in 1989 for the tax potentially payable
 on the capital gain arising from the disposal of the Group's
 investment in Morgan Grenfell Group plc. This provision is
 no longer required because sufficient capital losses to
 offset the capital gain have now been established.
 4. Dividend Per Share
 The Directors have declared a first interim dividend of 3.3
 pence per share which will be paid on 1 April 1992 to
 shareholders registered at the close of business on 13 March
 1992.
 Holders of the Company's American Depositary Receipts (ADRs)
 will receive the dividend after it has been converted into U.S.
 dollars by the Depositary. Payments to ADR holders whose
 residence (for tax purposes) is in the United States will
 include a refund of the associated UK tax credit in respect of
 the dividend. The payment will be subject to UK withholding
 tax (currently equal to 15 percent of the gross dividend) and
 will be sent to holders of ADRs by the Depositary on 8 April
 1992.
 5. Accounts
 The financial information contained herein, which is subject
 to final audit, does not constitute statutory accounts within
 the meaning of section 240 of the Companies Act 1985.
 Statutory accounts for the year ended 31 December 1990, upon
 which the auditors have given an unqualified report, have
 been delivered to the Registrar of Companies in England and
 Wales.
 -0- 3/11/92
 /CONTACT: (In London) Peter Stevens, 071-481-7045, or (in Nashville) Mike Sabanos, 615-872-6435, or Mary Florey, 615-872-3044, all of Willis Corroon/ CO: Willis Corroon Group plc; Willis Corroon Corporation ST: Tennessee IN: INS SU: ERN


CM -- CH003 -- 7257 03/11/92 10:35 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Mar 11, 1992
Words:2005
Previous Article:SPRINT INTRODUCES PRODUCTIVITY PLUS VOICE PROCESSING SYSTEM
Next Article:'IVY LEAGUE' PROGRAM OUTLINED FOR IBM's OS/2 2.0
Topics:


Related Articles
WILLIS CORROON GROUP plc RESULTS FOR NINE MONTHS ENDED SEPTEMBER 30, 1991
WILLIS CORROON GROUP plc RELEASES RESULTS FOR THE THREE MONTHS ENDED MARCH 31
WILLIS CORROON GROUP plc REPORTS RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1992
WILLIS CORROON GROUP plc ANNOUNCES PRELIMINARY RESULTS FOR THE YEAR ENDED DEC. 31, 1992
WILLIS CORROON GROUP PLC RESULTS FORTHE THREE MONTHS ENDED 31 MARCH 1994
KAYE GROUP INC. REPORTS 1996 FIRST QUARTER EARNINGS
Willis Corroon Group Announces Increased Annual Profits
Willis Corroon Results In Line with Expectations
Willis Corroon Profits Steady Before Effects Of Strong Pound
Royal & SunAlliance USA Announces First Half 1998 Results

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters