In spite of the challenging operating environment, Royal Exchange Group excites shareholders by its impressive financial results in 2012 and the decision to pay dividends
| By Anayo Ezugwu | Dec. 9, 2013 @ 01:00 GMT
IT WAS time for stock taking in the Royal Exchange Group, on November 27, when the company held its 2012 annual general meeting in Lagos. The stock taking revealed that the insurance company had an impressive performance in its 2012 operating results. Accordingly, the company rewarded some of its shareholders for their contribution during the period under review.
According to Kenneth Odogwu, chairman, board of directors of the company, the turnover was N7.61 billion, as against N6.82 billion in 2011. This translates into 11.58 percent increase over the previous year. The company achieved a profit before tax of N743 million for the year. He said that the board of directors had recommended a dividend of 4k per 50k ordinary share to members for the year which ended December 31, 2012. “In spite of the hostile operating environment experienced by the insurance sub-sector and the finance industry in general, Royal Exchange Group remained resilient in its performance, exploiting new opportunities and maintaining a strong hold on its existing business in 2012. During the period under review, the company generated a gross written premium of N7.61 billion, while that of the preceding year was N6.82 billion, an increase of 11.58 percent. Claims expenses during the year amounted to N1.63 billion similar to N1.64 billion spent in 2011.
“However, in relative terms, the claims ratio dropped from 35 percent in 2011 to 30 percent in 2012. Underwriting expenses increased by 15.13 percent from N1.85 billion in 2011 to N2.13 billion in 2012. This translated into a net income before overhead expenses of N3.54 billion, as against N3.17 billion in 2011, an increase of 11.91percent. Investment income increased significantly by 35. 10 percent from N475.21 million in 2011 to N642.02 million in 2012. The appreciable recovery of the capital marker and pricing of money market instruments enhanced the ability of your company to maximise returns from our quoted equities and cash portfolios with the year,” he said.
Auwalu Muktari, group executive director, marketing and sales of the company, thanked the shareholders for being steadfast throughout the troubling periods in the company. He also thanked God for a successfully annual general meeting for the 2012 account. He said that the company would continue to work harder following the consolidations. He noted that after the 2007 recapitalisation, the company came up with a group founding structure and with additional five subsidiaries. “It has been a troubling period for the company from 2007 to 2012. Since 2011 when we started getting our bearings, subsidiaries are breaking even and have started contributing to the bottom line. The growth is on the increase now and the strategies we have conducted for the past five years is on course and we are sure to continue to declare dividends. I want to assure all shareholders that Royal Exchange will continue to declare dividends year in year out as we have gone past the troubling period,” he said.
Chike Mokwunye, group managing director, said the company was focusing on increase in insurance penetration in the country through the use of internet and retail business. “We are the first to introduce the use of telephones to sell motor policy and our website is being enriched so that through it, our customers would be able to transact business with us. Again, we are doing some other things in our technology; it will be in the market very soon, possibly by first quarter of next year. That would help us drive our retail business and it’s certainly going to be along that line where we will use online and technology to move the business. We also are building up a structure in retail business and in no distant time you will begin to see the effect because it needs massive investment and we are investing heavily into it.”
The shareholders thanked the firm for paying dividend at a time many companies are facing challenges. Sunny Nwosu, president, Independent Shareholders Association of Nigeria, ISAN, lauded the company’s courage to pay dividend to shareholders. He urged the company to sustain the confidence reposed on it by doing what is right to shareholders. However, Odogwu, whose tenure has elapsed this year, was returned as the company’s chairman together with his other board members.