eSure reduces its 2014 final dividend by 12%

DividendMax Ltd.

eSure reduces its 2014 final dividend by 12%

Headlines

In-force policies up 0.7% to 1.946 million (2013: 1.933 million)

Gross written premiums down 3.4% to £517.8 million (2013: £535.8 million)

Profit before tax down 12.8% to £103.3 million (2013: £118.4 million) impacted by current market conditions and costs associated with the acquisition of Gocompare

Combined operating ratio increased by 2.2ppts to 91.9% (2013: 89.7%)

Additional Services Revenue ("ASR") broadly flat at £103.0 million (2013: £103.9 million)

- ASR excluding Claims Income up 1.7% to £97.3 million (2013: £95.7 million)

Pro forma earnings per share down 11.6% to 19.8 pence (2013: 22.4 pence)

Final dividend of 11.7 pence per share (2013: 13.3 pence). Full year dividend of 16.8 pence per share 

(2013: 15.8 pence) represents a payout ratio of 85%. The payout ratio comprises a base dividend of 50% 

and a special dividend of 35%.

Strong financial position with IGD coverage of 377% after the final dividend

Acquisition of the outstanding 50% of Gocompare for £95.0 million; expected to complete on 31 March
 
2015, funded by the issue of £125.0 million 6.75% ten year tier two Subordinated Notes

Peter Wood, Chairman of esure Group plc, commented:

"esure's management team continue to make the right decisions to position the Business for further profitable growth when market conditions permit. As we wait for those conditions, 2014 has been another year of discipline. The recent acquisition of Gocompare is an exciting opportunity for the Group. It provides us with strategic control of a leading UK financial services brand with great potential.

"The Group has delivered a solid set of results and has a strong financial position. In light of this, I am pleased to announce that the Board has declared a final dividend of 11.7 pence per share, which together with the interim dividend of 5.1 pence per share, represents a payout ratio of 85%, demonstrating the Board's commitment to return excess capital to shareholders."

Stuart Vann, Chief Executive Officer of esure Group plc, commented:

"The Group has delivered a solid set of results in 2014 against a backdrop of competitive market conditions. The Group's combined operating ratio of 91.9% is testament to our focused and disciplined approach to underwriting and the achievement of an efficient expense base. We continue to adopt a prudent approach to reserving and the Group's reserves remain in excess of 15% above our actuarial best estimate.

"Operationally we have been very busy, with progress on many fronts. In Motor, we have continued to rollout our segment re-entry programme and launched a number of new initiatives to expand our underwriting footprint. We have seen no consistent signs that rates are increasing in line with, or above claims inflation. We remain poised and ready for further growth when market conditions permit.

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