Gross written premiums from external customers and non-current
assets, as attributed to individual countries in which the Group
operates, are as follows:
2014 2013
Gross Gross
written Non-current written Non-current
premiums assets premiums assets
GBP000 GBP000 GBP000 GBP000
United Kingdom 237,821 123,971 298,898 73,329
Australia 40,083 257 45,669 918
Canada 39,365 2,407 41,172 1,338
Ireland 11,528 - 13,606 74
--------------- ------------------- -------------- -------------------
328,797 126,635 399,345 75,659
--------------- ------------------- -------------- -------------------
Gross written premiums are allocated based on the country in which the insurance contracts
are issued. Non-current assets exclude rights arising under insurance contracts, deferred
tax assets, pension assets and financial instruments and are allocated based on where the
assets are located.
Acquisition of business
On 15 April 2014, South Essex Insurance Brokers Limited acquired
the assets of Lansdown Insurance Brokers (hereafter referred to as
Lansdown). Lansdown is an insurance broker across a variety of
classes of business, with a particular specialism in blocks of
flats and apartments and high net worth homes. Lansdown was
acquired as part of the Group's strategy to identify new market
sectors in which to grow, either organically or through
acquisition, and is included within the Broking and Advisory
segment.
The amounts recognised in respect of the identifiable assets
acquired are as set out in the table below.
GBP000
Property, plant and equipment 12
Intangible assets 1,166
-------
Total identifiable assets 1,178
-------
Goodwill 4,392
-------
Total consideration 5,570
-------
Satisfied by:
Cash 5,000
Contingent consideration
arrangement 570
-------
Total consideration 5,570
-------
The net cash outflow arising on acquisition was
GBP5,000,000.
The goodwill of GBP4,392,000 arising from the acquisition
consists of intangible assets not qualifying for separate
recognition, such as workforce, synergies and new business
opportunities. None of the goodwill is expected to be deductible
for income tax purposes.
The fair value of the identifiable intangible assets of
GBP1,166,000 consists of the value of customer relationships and
brand acquired.
The contingent consideration arrangement requires GBP2,100,000
of retained commission income to be received for the twelve months
to 15 April 2015, with the potential amount of the future payment
that the Group could be required to make being between GBPnil and
GBP1,000,000.
The fair value of the contingent consideration of GBP570,000 was
estimated based on current commission forecasts, without
discounting as the payment is payable after exactly one year from
the date of acquisition.
No material acquisition-related costs were incurred in relation
to the transaction.
Lansdown contributed GBP1,046,000 revenue and GBP555,000 to the
Group's profit before tax for the period between the date of
acquisition and the balance sheet date. If the acquisition of
Lansdown had been completed on the first day of the financial year,
Group revenues for the period would have been GBP333,634,000 and
Group profit before tax would have been GBP48,405,000.
Current assets held for sale
Ecclesiastical Financial Advisory Services Limited ceased to
offer new mortgages following a strategic review in 2007, although
it continued to administer the existing book. During the current
year management have decided to dispose of the mortgage book in
order to more clearly focus their attention on the current elements
of the business.
After the end of the financial year the Company entered into an
agreement to transfer its legacy mortgage business to Holmesdale
Building Society. The transfer was completed on 1 February
2015.
The current assets held for sale consist of mortgages secured on
residential property.
2014
GBP000
Cost at 1 January 7,892
Repayments and redemptions (1,022)
Market value adjustment (666)
--------
Carrying value at 31 December 6,204
--------
The effective interest rate on the mortgages is 4.71% (2013:
4.42%).
Clients have the option to redeem mortgages before the end of
the mortgage term. The Directors consider that the carrying value
approximates to fair value.
There are no debts which are past due at the reporting date and
no amounts have been impaired during the current or prior year.
The major class of assets comprising the operations classified
as held for sale is financial investments.
Contingent liabilities
As reported in the 2013 annual report and accounts, the Group is
in correspondence with HM Revenue and Customs regarding the
treatment of its preference share capital for group tax purposes.
While the issue is still not fully resolved, further correspondence
has brought more clarity and we now believe that we have adequately
provided for any additional tax cost to the Group. We no longer
believe that there is a contingent liability in respect of this
issue in addition to the amount provided.
Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation.
Charitable grants to the ultimate parent company are disclosed
in the consolidated statement of changes in equity.
Full disclosure of related party disclosures is included in note
33 to the full financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PKQDDABKDPNB
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