By Al Edwards, Business Co-ordinatorDYOLL GROUP, with substantial interests in general insurance posted mixed results in its unaudited accounts for the period ended March 31,2003. The gross operating revenues of the Group increased by 42.4 per cent over the same period in 2002 from $164.7 million to $234 million.
In the chairman's report, Christopher Bovell attributed this to a large increase in premiums in all classes of insurance business in what is generally regarded as a slow period. He goes on to point out that this caused an increase in the Group's operating expenses with some of this income booked to its unearned premium reserves. This has not yet flowed through to the gross profit.
OPERATING LOSS
However, the Group did register a gross operating loss of $39.9 million against the previous year's figure of $12.4 million. This is due in part to Dyoll's coffee arm, Dyoll Wataru's final crop expenses being accounted for while revenue for coffee sales have yet to be booked. For the March quarter, Dyoll carried a relatively high expense burden. This included an increase in doubtful debts for insurance premiums greater than 90 days old and a provision for debt owed by Drax Hall Holdings. This impacted on profit attributable to shareholders for the first quarter of this year which was a meagre $706,989 substantially down on last year's corresponding period which was a healthy $20.9 million. Operating profit came in at $14.3 million as a consequence of investment income of $25 million and gains on foreign exchange of $27 million. This is down on 2002's figure of $38.2 million
NOT ALL BAD NEWS
Dyoll's Chief Financial Officer Catherine Parke-Thwaites, speaking to Wednesday Business yesterday pointed out that income was up 40 per cent as a result of writing new business but that had to be put aside in the PNL and apportioned over the year due to new accounting practices.
However, it was not all bad news. The Group's net current assets on the consolidated balance sheet grew to $1.14 billion, an improvement on the previous year's (first quarter 2002) $1.03 billion. Dyoll puts this growth down to good collections of premiums and coffee sales advances. This served to increase both short and medium term cash resources while at the same time the Group has managed to reduce the number of receivables. This amounted to cash flows from financing activities of $7.9 million for the March quarter compared with last year's $2.2 million for the same period.
As a word of caution, Mr. Bovell said the prevailing economic climate would negatively impact the growth of the Group.
In the chairman's report he said: "Overall we are concerned that the growth experienced in the first quarter will not continue due to macro economic conditions now prevailing. We also believe this year our valued customers will come under financial strain and this will negatively impact all the companies in the Group. Our targets for 2003 are now under review and we will endeavour at our upcoming annual general meeting to give all our stakeholders a more realistic forecast of how the group will fare in 2003."
Dyoll is attempting to have its shareholders buy back FINSAC's stake in the Group. To that end, PriceWaterhouse-Coopers have completed a valuation which has been submitted for FINSAC's consideration.
