Modified Atatutory Basis Notes
Geographical analysis of health premiums after reinsurance and operating result
(a) Premiums after reinsurance:
| 6 months 2004 £m |
6 months 2003 £m |
Full year 2003 £m |
|
|---|---|---|---|
| United Kingdom | 145 | 136 | 270 |
| France | 78 | 71 | 134 |
| Netherlands | 459 | 439 | 662 |
| 682 | 646 | 1,066 |
(b) Operating result:
| Operating profit | Underwriting result | |||||
|---|---|---|---|---|---|---|
| 6 months 2004 £m |
6 months 2003 £m |
Full year 2003 £m |
6 months 2004 £m |
6 months 2003 £m |
Full year 2003 £m |
|
| United Kingdom | 3 | 4 | 13 | 1 | 2 | 9 |
| France | 2 | 3 | 9 | (3) | (2) | (2) |
| Netherlands | 28 | 20 | 39 | 4 | (9) | (20) |
| 33 | 27 | 61 | 2 | (9) | (13) | |
Geographical analysis of general insurance premiums after reinsurance and operating result
(a) General insurance premiums after reinsurance:
| 6 months 2004 £m |
6 months 2003 £m |
Full year 2003 £m |
|
|---|---|---|---|
| United Kingdom | 2,674 | 2,496 | 5,135 |
| Europe (excluding UK) | |||
| France | 304 | 305 | 515 |
| Ireland | 292 | 319 | 611 |
| Netherlands | 341 | 295 | 563 |
| Other | 124 | 116 | 226 |
| International | |||
| Canada | 601 | 565 | 1,208 |
| Other | 118 | 182 | 266 |
| 4,454 | 4,278 | 8,524 |
(b) Operating result:
| Operating profit* | Underwriting result* | |||||
|---|---|---|---|---|---|---|
| 6 months 2004 £m |
6 months 2003 £m |
Full year 2003 £m |
6 months 2004 £m |
6 months 2003 £m |
Full year 2003 £m |
|
| United Kingdom | 408 | 313 | 676 | 67 | 10 | 50 |
| Europe (excluding UK) | ||||||
| France | 13 | 15 | 35 | (6) | (7) | (9) |
| Ireland | 68 | 43 | 91 | 36 | 14 | 26 |
| Netherlands | 23 | 12 | 35 | (1) | (3) | (5) |
| Other | 18 | 16 | 32 | (2) | (4) | (6) |
| International | ||||||
| Canada | 59 | (33) | 12 | 4 | (85) | (98) |
| Other | 24 | 21 | 30 | 7 | 4 | (12) |
| 613 | 387 | 911 | 105 | (71) | (54) | |
| * The general insurance operating profit and underwriting result are stated before the change in the equalisation provision of £11 million (six months to 30 June 2003: £28 million; full year to 31 December 2003: £49 million) and the Financial Services Compensation Scheme levy of £25 million (six months to 30 June 2003: nil; full year to 31 December 2003: nil). | ||||||
Corporate costs
| 6 months 2004 £m |
6 months 2003 £m |
Full year 2003 £m |
|
|---|---|---|---|
| Global finance transformation programme | (45) | (12) | (60) |
| Central costs and sharesave schemes | (49) | (44) | (100) |
| (94) | (56) | (160) |
Tax
The tax charge in the profit and loss account comprises:
(a) Tax on profit on ordinary activities:
| 6 months 2004 £m |
6 months 2003 £m |
Full year 2003 £m |
||
|---|---|---|---|---|
| Current tax | ||||
| UK corporation tax | – current year | 22 | 1 | (55) |
| – prior year | (11) | (9) | 17 | |
| Overseas tax | – current year | (44) | (18) | (1) |
| – prior year | 2 | 3 | 3 | |
| Tax attributable to balance on technical account | (160) | (147) | (315) | |
| (191) | (170) | (351) | ||
| Deferred tax | ||||
| Origination and reversal of timing differences | 47 | (6) | (19) | |
| Changes in tax rates or law | (6) | - | (11) | |
| (Decrease)/increase in discount | (1) | (6) | 14 | |
| Prior year adjustments | - | (29) | - | |
| 40 | (41) | (16) | ||
| Total tax charged in the profit and loss account | (151) | (211) | (367) | |
(b) Tax charge analysed between:
| 6 months 2004 £m |
6 months 2003 £m |
Full year 2003 £m |
|
|---|---|---|---|
| Tax charge on operating profit before tax, amortisation of goodwill, amortisation of acquired additional value of in-force long-term business and exceptional items | (255) | (194) | (403) |
| Tax credit/(charge) on (loss)/profit on other ordinary activities | 104 | (17) | 36 |
| (151) | (211) | (367) |
(c) Factors affecting current tax charge for the year:
| 6 months 2004 £m |
6 months 2003 £m |
Full year 2003 £m |
|
|---|---|---|---|
| Profit on ordinary activities before tax | 414 | 742 | 1,390 |
| Current tax charge at standard UK corporation tax rate of 30% (2003: 30%) | (124) | (223) | (417) |
| Adjustment to tax charge in respect of prior years | (8) | (6) | 20 |
| Non-assessable dividends | 23 | 6 | 5 |
| Non-taxable profit/(loss) on the sale of investments | 8 | (1) | (10) |
| Non-taxable amortisation of goodwill | (9) | (7) | (5) |
| Other disallowable expenses | (35) | (16) | (33) |
| Utilisation/non-utilisation of tax losses | 30 | - | (10) |
| Different local basis of tax on overseas profits | (29) | 48 | 53 |
| Deferred tax charge arising from movement in unrealised gains and losses | - | 4 | 20 |
| Other deferred tax movements | (41) | 2 | 10 |
| Deferred tax assets not recognised | - | 9 | 38 |
| Other items | (6) | 14 | (22) |
| Current tax charge for the year | (191) | (170) | (351) |
Dividends
(a) The preference dividends in the profit and loss account comprise:
| 6 months 2004 £m |
6 months 2003 £m |
Full year 2003 £m |
|
|---|---|---|---|
| Preference dividends | 9 | 9 | 17 |
The preference dividends are in respect of the cumulative irredeemable preference shares of £1 each in issue.
(b) The ordinary dividends in the profit and loss account comprise:
| 6 months 2004 £m |
6 months 2003 £m |
Full year 2003 £m |
||
|---|---|---|---|---|
| Ordinary dividends | ||||
| Interim | 9.36 pence (2003: 9.0 pence) | 211 | 203 | 203 |
| Final | (2003: 15.15 pence) | - | - | 342 |
| Total ordinary dividends | 211 | 203 | 545 | |
Irish shareholders who are due to be paid a dividend denominated in euros will receive a payment at the exchange rate prevailing on 3 August 2004.
Earnings per share
(a) Basic earnings per share
| 6 months 2004 | 6 months 2003 | Full year 2003 | ||||||
|---|---|---|---|---|---|---|---|---|
| Before tax £m | Net of tax, minorities and preference dividend £m | Per share p | Net of tax, minorities and preference dividend £m | Per share p | Net of tax, minorities and preference dividend £m | Per share p | ||
| Operating profit* | 878 | 571 | 25.4 | 404 | 17.9 | 991 | 44.0 | |
| Adjusted for the following items: | ||||||||
| – | Amortisation of goodwill | (49) | (49) | (2.2) | (52) | (2.3) | (103) | (4.6) |
| – | Amortisation of acquired additional value of in-force long-term business | (49) | (36) | (1.6) | (30) | (1.3) | (98) | (4.4) |
| – | Financial Services Compensation Scheme levy | (25) | (18) | (0.8) | - | - | - | - |
| – | Exceptional costs for termination of operations | (50) | (42) | (1.9) | (16) | (0.7) | (16) | (0.7) |
| – | Short-term fluctuation in investment return | (286) | (209) | (9.3) | 207 | 9.1 | 198 | 8.9 |
| – | Change in the equalisation provision | (11) | (8) | (0.4) | (20) | (0.9) | (34) | (1.5) |
| – | Net profit/(loss) on disposal of subsidiary undertakings | 6 | 6 | 0.3 | (1) | - | (6) | (0.3) |
| Profit attributable to equity shareholders |
414 | 215 | 9.5 | 492 | 21.8 | 932 | 41.4 | |
| * All operating profit is from continuing operations. | ||||||||
Earnings per share has been calculated based on the operating profit before amortisation of goodwill, amortisation of acquired additional value of in-force long-term business and exceptional items, after tax, attributable to equity shareholders, as well as on the profit attributable to equity shareholders. The directors believe the former earnings per share figure provides a better indication of operating performance. The calculation of basic earnings per share uses a weighted average of 2,252 million (six months to 30 June 2003: 2,252 million; full year 2003: 2,251 million) ordinary shares in issue, after deducting shares owned by the employee share trusts as required by FRS14 ‘Earnings per share’.
The actual number of shares in issue at 30 June 2004 was 2,262 million (30 June 2003: 2,257 million; 31 December 2003: 2,257 million).
(b) Diluted earnings per share:
| 6 months 2004 | 6 months 2003 | Full year 2003 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Total £m | Weighted average number of shares m | Per share p | Total £m | Weighted average number of shares m | Per share p | Total £m | Weighted average number of shares m | Per share p | |
| Profit attribut-able to equity share-holders |
215 | 2,252 | 9.5 | 492 | 2,252 | 21.8 | 932 | 2,251 | 41.4 |
| Dilutive effect of share awards and options | - | 18 | - | - | 8 | - | - | 8 | (0.1) |
| Diluted earn-ings per share |
215 | 2,270 | 9.5 | 492 | 2,260 | 21.8 | 932 | 2,259 | 41.3 |
