Britam records Kshs 647m profit before tax in its half-year results
Financial services firm, Britam Holdings PLC has today posted a profit before tax of Kshs 647milion in its half-year results for the period ending June 30th, 2021.
This is a significant improvement compared to a loss before tax of Kshs 2.3 billion reported during a similar period last year.
The improved performance is attributed to growth in premiums from new business and investment income from its broad investment portfolio. The firm also registered significant growth in investment income following the re-allocation of its investment portfolio to increase yields.
Investment income during the period grew to Kshs 4.9 billion, representing a 35 per cent growth compared to a similar period last year.
The Group also realized growth in revenue from both its local and regional businesses. The regional businesses contributed 24 per cent of the Group’s gross earned premiums. The Group’s gross earned premiums and fund management fees were up 5.7 per cent to Kshs 14.9 billion.
Commenting on the results, Britam’s Group Managing Director, Tavaziva Madzinga said: “The Group remains optimistic of sustaining profitability in 2021 on the back of an improving operating environment and gains from our new transformative strategy. In the short term, we will however continue to pursue prudent cost management initiatives and maintain a stable solvency position.”
Britam recently completed its transformation process which entailed creating a leaner, agile and more customer-centric organization.
The transformation exercise is expected to accelerate the delivery of its new strategic plan, which focuses on preparing the firm for growth by organizing the business around delighting the customer; leveraging technology; turning around key cost drivers and optimizing the profile and returns of its investments.
Summary of key highlights:
In the six-month period, the Group has recorded:
- Strong growth in investment income which was up 35 percent to Kshs 4.9 billion.
- Gross earned premiums and fund management fees were up 5.7 per cent to Kshs 14.9 billion.
- Regional general insurance businesses recorded a 10 per cent growth and contributed 24 percent to the Group’s gross earned premiums which grew to Kshs 3.6 billion.
- Claims and policy holders’ benefits and expenses increased by 27.1 per cent to Kshs 11.7 billion as the business took measures to cushion customers from constraints occasioned by Covid-19.
- Growth in operating expenses by 25.8 per cent to Kshs 4.9 billion was attributed mainly to one-off items related to the ongoing transformation of the business as it implemented its strategy. Excluding the one-off items, the underlying operating expenses declined by 1.8 per cent.
- Profit after tax was up to Kshs 376.3 million from a loss after tax of Kshs 1.6 billion posted in the same period in 2020.
- Total comprehensive income improved to Kshs 1.2 billion from a comprehensive loss of Kshs 4.2 billion in the same period in 2020.
The business fundamentals remain strong with both the Group’s assets and shareholders’ funds growing in the period.
The operating environment remains uncertain as the effects of Covid-19 on economic activities continues to impact individuals, businesses, and the economy in general. As the local and regional economies recover from the effects of the Covid-19 pandemic, the firm is optimistic of improved performance across its local and regional businesses in the second half of 2021.
The Board of Directors did not recommend the payment of an interim dividend for the six-month period to June 2021.