Hibernian has indicated that it is on the lookout for acquisitions, after reporting strong results for last year. Investment gains and good growth in sales contributed to a 31 per cent rise in pre-tax profits to €72 million (£57 million) in 1998. Announcing its results yesterday, Hibernian chief executive, Mr Adrian Daly, said the insurance firm is firmly focussed on developing its business in the Irish market and is on the look out for suitable acquisitions, particularly on the life and pensions side. The insurer could spend up to €444 million (£350 million) on the right acquisition, subject to shareholder approval, he said. This suggests that Hibernian is keen to take an active part in the expected future consolidation of the insurance sector.
Mr Daly insisted that Hibernian is not currently in negotiations on an acquisition and has not become the subject of a takeover bid itself. Speculation had mounted last year that its 28 per cent shareholder - Commercial General Union - would eventually make a bid for the group. Mr Daly stated that it had received "no approach" from CGU or anyone else. Operating profits increased by 33 per cent in 1998 to €44.5 million. Strong growth in the capital value of investments contributed a further €21.2 million.
The group's 12 month outturn was also helped by the proceeds of the sale of its UK operations last year to NIG Skandia. Hibernian realised a profit of €600,000 after a good-will write-off of €1.3 million and expenses relating to the disposal of €1.9 million.
Shareholders funds rose by €52.7 million to €282.6 million. And the board has declared a second interim dividend of €13.2 cents per share in lieu of a final dividend for 1998. The second interim dividend will be paid on March 26th to shareholders on the company's register at the close of business on March 5th next. The second dividend will allow shareholders to offset their tax liability on these earnings using tax credits before they are abolished on April 5th.
Overall premium increased by 17.8 per cent. Hibernian's general insurance operations recorded a 15.3 per cent increase in premium income to €253 million. It returned an operating profit of €26.3 million, up from €12.5 million in the same period last year. The underwriting loss reduced to €15.3 million down from €28.4 million, continuing the positive trend in this area also evidence in Guardian PMPA results for 1998, published last week.
The bulk of this improvement was mainly due to a significantly better performance at its private motor insurance business. Hibernian's life operations also enjoyed a good year, with new annual premium sales at €23 million and single premium sales at €47.3 million.
