26th March 2017
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Company Data
 
Britam Holdings Ltd
http://www.british-american.co.ke
Par Value:                  
Closing Price:           10.10
Total Shares Issued:          1938415838.00
Market Capitalization:        19,577,999,964
EPS:             -0.5
PE:                 -20.200
 

H1 Gross earned premium 10.520271b vs. 10.198438b +3.156%
H1 Reinsurance premium ceded [1.639368b] vs. [1.832653b] -10.547%
H1 Net earned premium 8.880903b vs. 8.365785b +6.157%
H1 Investment income 2.726124b vs. 2.351774b +15.918%
H1 Total revenue 12.687283b vs. 11.047297b +14.845%
H1 Insurance claims and loss adjustment expenses [4.259527b] vs. [5.101743b] -16.508%
H1 Change in actuarial value of policyholder benefits [0.086536b] vs. 1.331104b -106.501%
H1 Net insurance benefits and claims [3.608468b] vs. [5.109717b] -29.380%
H1 Operating and other expenses [3.141072b] vs. [2.461579b] +27.604%
H1 Total expenses [10.117237b] vs. [10.205493b] -0.865%
H1 Profit [Loss] before tax 2.873298b vs. 1.043760b +175.283%
H1 Profit [Loss] for the period 1.778895b vs. 0.624563b +184.822%
EPS 0.92 vs. 0.32 +187.500%
Shareholders funds 18.928205b vs. 20.915125b -9.500%
Total assets 81.714237b vs. 76.614854b +6.656%
Cash and cash equivalents at the end of the period 7.457305b vs. 4.954172b +50.526%

Company Commentary

Groups core business performed very well in the first half of 2016 achieving a 175% increase in PBT
Investment Income +38% to 2.4b
Asset Management revenue +21% to 529.4m
Total Assets +7% to 81.7b
THE GPV [Gross Premium Valuation] versus NPV [Net Premium valuation] decline in net claims expense by 2.28 improve in profitability of 1.95b
acquisition of 100% Real Insurance Group
No Interim Dividend

Conclusions

The Change to GPV was worth 1.95b and if you stripped that out H116 PBT was behind

FY Gross earned premium 19.605675b vs. 14.045772b +39.584%
FY Net earned premium 16.373722b vs. 11.792162b +38.853%
FY Net realised gains on financial assets at fair value through profits and loss [2.836211b] vs. 4.102165b -169.139%
FY Total revenue 20.130987b vs. 20.692335b -2.713%
FY Change in actuarial value of policyholder benefits [2.769604b] vs. [3.051301b] -9.232%
FY Net insurance benefits and claims [10.614215b] vs. [8.023291b] +32.293%
FY Operating and other expenses [6.716741b] vs. [4.616406b] +45.497%
FY Total expenses [21.920789b] vs. [17.738960b] +23.577%
FY [Loss] profit before share of the profit of the associate [1.789802b] vs. 2.953375b -160.602%
FY Share of profit of the associates accounted for using the equity method 594.864m vs. 259.007m +129.671%
FY [Loss] profit before tax [1.194938b] vs. 3.212382b -137.198%
FY [Loss] profit for the year [1.009458b] vs. 2.497878b -140.413%
EPS [0.5] vs. 1.31 -138.168%
Dividend 0.30 vs. 0.30
Cash & cash equivalents at the end of the year 4.814061b vs. 6.841187b -29.631%

Company Commentary

Core business Revenue increased +38%
Insurance business revenue +40%
Regional Units contribution to insurance business revenue was 4b +152.7%
AUM asset management business increased +66%
Loss on financial assets at Fair Value through profit or loss of -2.8b versus a gain in 2014 of 4.1b
100% acquisition of Real Insurance Group
7 countries operating under BRITAM brand Uganda, Rwanda, Tanzania, South Sudan, Mozambique and Malawi.
Dividend 30 cents a share

Earnings were mainly brought down by KES 2.8bn loss on financial assets at fair value vs 2014 gain of KES 4.1bn. The Company attributed the decline in value of financial assets to poor performance of the securities market. Gross earned premiums grew by 38% to KES 20.3bn but was offset by 32% increase in net claims and benefits to KES 10.6bn. The Groups net loss ratio contracted by 200bps to stand at 62% vs 2014s 64%, implying improved claims management in the period. Investment income was up 31% to KES 4.55bn. Loss after tax stood at KES 1.0bn vs 2014 PAT of KES 2.5bn, hence loss per share stood at KES 0.50 down from an EPS of KES 1.31.

Conclusions

These Earnings were better than expected in fact.

H1 Total Assets 76.614854b versus 55.150514b
H1 Total Revenue 11.047297b versus 10.242909b +7.9%
H1 Gross earned premium 10.198438b vs. 5.611458b +81.7%
H1 Reinsurance premium ceded [1.832653b] vs. [0.583881b] +213.9%
H1 Fund management fees 439.356m vs. 413.750m +6.2%
H1 Investment income 2.351774b vs. 1.694847b +38.8%
H1 Commissions earned 430.009m vs. 141.722m +203.4%
H1 Net unrealised fair value gains on financial assets at fair value though profit and loss [0.842947b] vs. 2.864061b -129.4%
H1 Other income 66.614m vs. 12.247m +443.9%
H1 Insurance claims and loss adjustment expenses 5.101743b vs. 2.125666b +140.0%
H1 Change in actuarial value of policyholder benefits 1.331104b vs. 1.644054b -19.0%
H1 Net insurance benefits and claims 5.109717b vs. 3.598835b +42.0%
H1 Operating and other expenses 2.461579b vs. 1.832683b +34.3%
H1 Total expenses 10.205493b vs. 7.385816b +38.2%
H1 Profit before share of the profit of the associate 0.841804b vs. 2.857093b -70.5%
H1 Share of profit of the associate for using the equity method 201.956m vs. 152.503m +31.4%
H1 Profit Before Tax 1.043760b vs. 3.009596b -65.3%
H1 Profit After Tax 0.624563b vs. 2.746388b -77.3%
H1 Earnings Per Share attributable to owners of the parent 0.32 vs. 1.45 -78.6%
H1 Gains on revaluation of financial assets at fair value through other comprehensive income [0.517181b] vs. 3.295442b -115.7%
H1 Total items that will not be reclassified to profit or loss [0.517181b] vs. 3.308069b -115.6%
H1 Total items that may be reclassified to profit or loss 2.314m vs. 11.077m -79.1%
H1 Total other comprehensive income [0.514867b] vs. 3.319146b -115.5%
H1 Total comprehensive income for the year 0.109696b vs. 6.065534b -98.2%

Company Commentary

The Groups core Business posted tremendous growth in the first Half of the Year
Insurance and Asset management business revenues have grown to 10.6b +77%
Premium income in the insurance Business grew by +82% to 10.2b
Regional business revenue contribution +708% to 2.1b fem 262.9m
Realizable investment income [dividends and interest] and income from property investments increased by 45%
Asset Base grew +38.9%
The bearish performance of the securities market has negatively impacted on the fair value from financial Assets
BRITAM now operates in seven countries in Africa
No Interim Dividend

@BRITAM EA Tweets from the Earnings Release
https://twitter.com/BritamEA

Growth in Group PBT on the Core business Factoring out Fair value gains has grown by 88% BritamH1Results
Britam 30% CAGR on Embedded Value BritamH1Results
We aim to Increase our property portfolio to between 20% & 30% and Reduce reliance on equities 30%. BritamH1Results
In the Balance Sheet we can see: 39% Growth in Total Assets BritamH1Results
The Regional business is 19.9% of the business bringing in 2.12 Billion BritamH1Results
Sunil Sanger Sang252 BritamEA records 77% growth in gross earned premium in HY15. Includes revenue from Real Insurance acquisition
Britam BritamEA In brand equity, we are Industry leader in Share of Voice (SoV) 25%, Industry Leader in Top of Mind (ToM) awareness 33%. BritamH1Results
Britam BritamEA Britam is the largest life insurer in Kenya with an 18.7% market share, according to IRAs Q1 2015 statistics. BritamH1results
The other top reason we are here is the property strategy, where we are on track despite the set back with Acorn. BritamH1Results

Conclusions

Strong organic and acquisition [REAL] related growth.
Portfolio related mark to market mark downs crimped these Earnings big.

FY through 31st December 2014 versus through 31st December 2013
FY Gross Earned Premium 14.045772b versus 8.847166b +58.76%
FY Net earned Premium 11.792162b versus 7.751199b +52.1333%
FY Total Revenue 20.692335b versus 15.130058b +36.76%
FY Change in actuarial value of policyholder benefits 3.051301b versus 1.925007b
Net Insurance benefit and claims 8.023291b versus 4.902058b
FY Total Expenses 17.738960b versus 12.190920b
FY Profit before share of the profit of the associate 2.953375b versus 2.939138b +4.84%
FY Share of profit of the associates for using the equity method 774.678m versus 181.685m
Full Year Profit before Tax 3.728053b versus 3.120823b +19.457%
Full Year Profit after Tax 2.840268b versus 2.315448b +22.666%
FY EPS 1.47 versus 1.19 +23.52%
Final Dividend 30cents a share

Company Commentary

Comprehensive income of 6.4b +74.3%
Core business revenue of 14.7b +55.8%
Revenue for the Insurance Business in the Group of 14b +58.8%
Regional subsidiaries contribution to revenue grew 436% to 1.6b from 294m
Asset Base of 73b +55.6%

Conclusions

It would be helpful to know the configuration of the 774.678m share of profit of the Associate.
Well managed. Last years fracas is now behind them.

First Half Earnings through 30th June 2014 versus through 30th June 2013
First Half Gross earned premiums and fund management Fees 6.025208b versus
4.669423b +29.042%
First Half Net Earned Premiums 5.441326b versus 4.091845b +32.979%
First Half investment Income 4.647613b versus 3.744591b +24.11537%
First Half Total Revenue 10.242907b versus 7.986244b +28.256%
First Half Total Expenses 7.385814b versus 5.792327b +27.5103%
First Half Profit before Tax 3.009596b versus 2.280325b +31.98%
First Half Profit After Tax 2.746388b versus 2.158341b +27.245%
First Half Earnings Per Share 1.45 versus 1.14 +30.63%
First Half Gains on revaluation of financial assets at Fair Value through other comprehensive income 3.295442b versus 1.512583b

Company Commentary
Regional offices contribution grew 54.9% to 262.9m
Asset Base of 55.2b +28.3%

Conclusions

Strong and muscular earnings but a lot of this is now baked into the
Price.

British American Investments Company (K) Ltd is a leading diversified financial services Group in the country offering a wide range of Insurance and Asset Management services to individuals, small businesses, corporations and government entities.

Full Year through 31st December 2013 versus through 31st December 2012
FY Gross Earned Premium 8.847166b versus 6.849692b +29.161%
FY Net Earned Premium 7.751199b versus 5.956691b +30.125%
FY Fund Management Fees 613.511m versus 377.208m +62.6%
FY Investment Income 2.759463b versus 1.971016b +40.002%
FY Net Realised gains on Financial Assets 232.727m versus 45.554m
Net Fair Value gains on financial assets at Fair Value through Profit or Loss 3.355541b versus 3.032092b
Commissions earned 370.521m versus 307.639m
FY Total Revenue 15.130058b versus 11.743384b +28.838%
FY Expenses
Insurance claims and loss adjustment Expenses 3.270310b versus 4.282914b -23.642%
Net Insurance benefits and claims 4.826720b versus 3.669331b +31.54%
Operating and other Expenses 3.210990b versus 2.286578b +40.42%
FY Total Expenses 12.115583b versus 9.040823b +34.009%
FY Profit Before Tax 3.196161b versus 2.849406b +12.274%
FY Profit after Tax 2.653789b versus 2.519461b +5.33%
FY Earnings Per Share 1.40 unchanged
Final Dividend 25 cents a share

Company Commentary
Full Year Profit Before Tax +12.2%
Core Business Revenue +30.9%
Revenue for the Insurance Business in Kenya +26.5%
Asset Management Fees +62.6%
Regional Offices contributed 294m +232.2%
Opened Operations in Rwanda
Share Purchase Agreement with Real

Conclusions

They are clearly seeking to Dash for Growth and geographical reach and that can be seen in the +28.838% FY Revenue Gain.
It looks fairly priced now after a really aggressive Rally that started in Q4 2013.

H1 2013 Earnings through June 2013 versus June 2012
Gross Earned premiums 4.402259b versus 3.349667b
H1 Investment Income 1.060872b versus 1.756900b
H1 Net Realised Gains on Financial Assets 333.778m versus 2.061m
Net Fair Value gains on Financial Assets at Fair Value through Profit and Loss 2.349941b versus 0.833837b
H1 Total Expenses 5.792327b versus 4.002092b
H1 PBT 2.280326b versus 1.823139b +25.076%
H1 PAT 2.158342b versus 1.679273b
H1 EPS 1.14 versus 0.93 +22.5086%
No Interim Dividend

Company Commentary
H1 Total Comprehensive Income 3.677b versus 2.798b +31%
Insurance Revenues +31% to 4.4b versus 3.4b
Asset Management Revenues +67%

Conclusions

This is a cheap share.

FY 2012 Earnings versus FY 2011 Earnings
FY Gross Earned Premiums 6.849692b versus 5.607621b
Net Earned Premiums and Management Fee 6.333899b versus 5.175222b
Investment Income 1.971016b versus 1.296171b
Net Realised Gains on Financial Investments 45.554m versus [487.345m]
Net Fair Value Gains on Financial Assets at Fair Value 3.032092b versus [2.902024b]
Net Income 11.743384b versus 3.382684b
Net Insurance Benefits and Claims 3.669331b versus 2.999016b
Operating and Other Expenses 2.286578b versus 1.760544b
FY PBT 2.849406b versus [1.724086b]
FY PAT 2.519461b versus [1.957305b]
Other Comprehensive Income
Gains on Available for Sale Financial Assets 1.527995b versus [2.245832]
Total Comprehensive Income 4.184734b versus [4.186381b]
FY EPS 1.40 versus [1.09]
Final Dividend 25cents a share

Company Commentary
Insurance Revenues +22%
Driving growth via Insurance, Asset Management, Property and Regional expansion

Conclusions

Strong Turnaround Results which were signalled in the Half Year Earnings Release.

H1 through 30th June 2012 versus H1 2011
Gross Earned Premiums 3.349667b versus 2.583994b +29.631%
Net Earned Premiums and Management Fees 2.897517b versus 2.287544b +26.66%
Fund Management Fees 159.035m versus 119.681m +32.88%
Net Earned Premiums and Management Fees 3.056552b versus 2.407225b +26.974%
Investment Income 2.592797b versus [-54,899m]
Net Income 5.772135b versus 2.439058b +136.654%
Net Claims Payable 2.356101b versus 1.247032b +88.936%
Operating and Other Expenses 0.985489b versus 0.766807b +28.5185%
Profit and Loss Before Tax 1.823138b versus [-109.682m] +1762%
Profit and Loss After Tax 1.679271b versus [-197.679m]
Earnings Per Share 0.93 versus -0.13 +815.38%
Gains [or losses] on Available For Sale Financial Assets +1.123217b versus [-222..425m]
Total Comprehensive Income 2.797958b versus [-420.104m]
No Interim Dividend

Future Outlook
Investment in Real Estate
Execution of 10b Property Fund
Commenced Operations in Juba

Conclusions

Strong Turn Around Results which see below were predictable and predicted. On a Forward Implied PE Basis It looks a very cheap share.

FY 2011 Earnings versus FY 2010
Underwriting Profit 377m versus 152m.
Unrealised Losses 3.3b booked through the Profit and Loss Account
Total Unrealised Losses on Equities was 5.5b
Losses on Revaluation Available for Sale Assets -2.245832b
PBT Loss of -1.7b versus Profit of 2.9b
Insurance Business turned a Profit Before Tax 1.1b versus 1b
EPS -1.09 versus 1.81
PAT -1.957305b versus +2.713784b
15 Cents Final Dividend
52wk Range: 3.80 9.00

Conclusions

They Had issued a Profits Warning 10th January -
I am confident that the NSE will trend higher through 2012 and that Bond Yields will trend Lower both Trends should repair some of the Damage.
I do not have Visibility on the Portfolio and therefore cannot comment on the Micro Aspect of the Situation.
Average Price Over the last 5 Weeks
Average Price Over the last 5 Months
No. Of Shares Traded Over the last 5 Weeks
No. Of Shares Traded Over the last 5 Months
Market Capitalization Over the last 5 Weeks
Market Capitalization Over the last 5 Months
Data Source: Nairobi Stock Exchange
Trading Day: 24 Mar 2017
 
Downloads
 
  24-MAR-2017 ::  Full Year Results
  Audited Financial Statements for the Year Ended 31st December 2016.

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  24-FEB-2017 ::  Notice of Annual General Meeting.
  Notice of Annual General Meeting.

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  03-JAN-2017 ::  PUBLIC ANNOUNCEMENT
  Public Announcement

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  25-AUG-2016 ::  GROUP FINANCIAL RESULTS FOR THE PERIOD ENDED 30TH JUNE 2016
  GROUP FINANCIAL RESULTS FOR THE PERIOD ENDED 30TH JUNE 2016

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  29-JUL-2016 ::  AGM Resolutions.
  AGM Resolutions.

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  29-JUN-2016 ::  Medium Term Note 4th Interest Payment
  Medium Term Note 4th Interest Payment

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  13-JUN-2016 ::  PUBLIC ANNOUNCEMENT
  Public Announcement

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  30-MAY-2016 ::  Resignation of Directors.
  Resignation of Directors.

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  30-MAY-2016 ::  Notice of the 20th Annual General Meeting.
  Notice of the 20th Annual General Meeting.

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  23-MAY-2016 ::  Appointment of Director
  Appointment of Director

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  19-APR-2016 ::  Group Financial Results for the Year Ended 31st December 2015
  Group Financial Results for the Year Ended 31st December 2015

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