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Appendix 4D
For the half-year ended 31 December 2021
NobleOak Life Limited
ACN 087 648 708
For personal use only
Appendix 4D
RESULTS FOR ANNOUNCEMENT TO THE MARKET
Consolidated | 31 December | 31 December | ||
2021 | 2020 | Movement | Movement | |
$'000 | $'000 | $'000 | % | |
In force premiums (ex Genus) at period end | 226,472 | 142,389 | 84,083 | 59% |
New business Sales (annualised premium) | 40,177 | 31,645 | 8,532 | 27% |
Net insurance premium revenue | 30,845 | 21,306 | 9,539 | 45% |
Net profit after tax | 1,978 | 2,673 | (695) | (26%) |
Underlying net profit after tax | 4,580 | 3,107 | 1,473 | 47% |
Earnings Per Share
Consolidated | Movement | ||
31 December | 31 December | ||
2021 | 2020 | % | |
Basic earnings per share (cents) | 2.62 | 4.49 | (42%) |
Diluted earnings per share (cents) | 2.56 | 4.38 | (42%) |
Underlying Basic earnings per share (cents) | 6.07 | 5.22 | 16% |
Underlying Diluted earnings per share (cents) | 5.92 | 5.09 | 16% |
Dividends
Franked | ||
Amount per | amount per | |
ordinary | ordinary | |
share | share | |
Dividend paid | $0.12 | $0.12 |
During FY21, the Directors resolved to determine the payment of a dividend of $0.12 per share franked to 100%. The dividend was paid out of the Company's pre‑existing cash reserves (prior to the IPO) on 20 July 2021. The aggregate dividend amount of $8.2 million was paid to holders of ordinary shares in the Company as at the Record Date of 9 June 2021. (HY21: Nil)
No interim dividend has been declared.
NobleOak Life Limited Appendix 4D | 1 |
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Appendix 4D Continued
Net Tangible Assets Per Share
31 December | 31 December | |
Consolidated | 2021 | 2020 |
Net tangible assets per share: | $1.37 | $1.36 |
Further detailed information is provided in the sections that follow and in the Directors' Report and Operating and Financial Review in the accompanying Condensed Consolidated Financial Report for the half‑year ended 31 December 2021.
RESULTS OF OPERATIONS
NobleOak's strong growth continued over the last six months. As at 31 December 2021, NobleOak had over 94,000 (30 June 2021: 77,000) active Life Insurance policies (excluding Genus), representing over $226 million (30 June 2021: $182 million) of annual in force premiums.
NobleOak has developed a trusted brand in the Australian life risk insurance market, combining contemporary Life Insurance products with a digital technology platform and service‑driven business model. During the half year Noble Oak announced new direct distribution partner arrangements which will see its products marketed and distributed to more than 2.2 million potential customers Australia‑wide. The new partners are:
- Royal Automobile Club of Western Australia (RAC WA), which was launched ahead of schedule in October 2021,
- Budget Direct, which was launched in February 2022, and
- Qudos Bank, launched in December 2021.
Across the business, underwriting performance remains strong with no material claims deterioration, and while expenditure was elevated in the first half of the year due to investment in new Individual Disability Income Insurance (IDII) product development and onboarding new partnerships, this is not expected to continue beyond the short‑term. The half year results also included IPO related expenses which have been excluded from the underlying results, this allows the users of financial information to better assess the underlying performance of the business.
Following its successful Initial Public Offering (IPO) in July 2021, NobleOak has strengthened its balance sheet and capital adequacy levels significantly, and is strongly positioned to continue its growth trajectory as well as meet its obligations to its policyholders and other stakeholders.
NobleOak Life Limited Appendix 4D | 2 |
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Appendix 4D Continued
NobleOak achieved the following results for the half year ended 31 December 2021:
31 December | 31 December | |||
$'000 | 2021 | 2020 | Variance $ | Variance % |
Insurance premium revenue | 114,485 | 73,652 | 40,833 | 55% |
Reinsurance expenses | (83,640) | (52,346) | (31,294) | 60% |
Net insurance premium revenue | 30.845 | 21,306 | 9,539 | 45% |
Investment income | 94 | 140 | (46) | (33%) |
Net commissions | 7,173 | 6,358 | 815 | 13% |
Fees and other income | 2,128 | 1,913 | 215 | 11% |
Claims expense (net of reinsurance recoveries) | (3,982) | (2,399) | (1,583) | 66% |
Policy acquisition costs | (21,793) | (17,577) | (4,216) | 24% |
Change in net policy liabilities | ||||
(before discount rate movement) | 3,193 | 3,505 | (312) | (9%) |
Change in net policy liabilities | ||||
(discount rate movement) | (910) | (619) | (291) | 47% |
Administration expenses | (10,954) | (8,759) | (2,195) | 25% |
IPO expenses | (2,807) | - | (2,807) | n/a |
Operating profit | 2,987 | 3,868 | (881) | (23%) |
Lease interest expense | (29) | (49) | 20 | (41%) |
Profit before tax | 2,958 | 3,819 | (861) | (23%) |
Income tax expense | (980) | (1,146) | 166 | (14%) |
NPAT | 1,978 | 2,673 | (695) | (26%) |
Impact of policy liability discount | ||||
rate changes (post tax) | 637 | 434 | 203 | 47% |
Impact of IPO expenses (post tax) | 1,965 | - | 1,965 | n/a |
Underlying NPAT 1 | 4,580 | 3,107 | 1,473 | 47% |
1 Underlying NPAT is a non‑IFRS financial measure, defined as net profit after tax excluding the impact of changes in policy liability discount rates and IPO expenses. Movements in the discount rate are driven by external economic market conditions and can generate volatility in statutory profits, disclosing an underlying measure of profits, which excludes the impact of changes in discount rates and non‑recurring costs such as those pertaining to the IPO, allows the users of financial information to better assess the underlying performance of the business (as is contemplated by ASIC RG 230 Disclosing non‑IFRS financial information).
Underlying net profit after tax grew to $4.6 million (HY21: $3.1 million) an increase of 47% on the prior corresponding period and 12% ahead of the HY22 Pro‑forma (Underlying) Prospectus forecast of $4.1 million.
After allowing for the impact of changing interest rates on the valuation of policy liabilities and
non‑recurring costs pertaining to the IPO, NobleOak's Reported NPAT increased by 0.4% to $2.7 million (HY21: $2.7 million).
The Company is pleased with the performance of all business segments, each of which has contributed positively during the period and exceeded its respective HY22 Pro‑forma (Underlying) Prospectus forecasts.
NobleOak Life Limited Appendix 4D | 3 |
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Appendix 4D Continued
Consolidated | Consolidated | Variance | Variance | |
After Tax Results by Segment $'000 | HY22 | HY21 | $ | % |
Direct | 2,576 | 1,693 | 883 | 52% |
Strategic Partners | 1,449 | 730 | 719 | 98% |
Genus | 555 | 684 | (129) | (19%) |
Group Underlying NPAT | 4,580 | 3,107 | 1,473 | 47% |
KEY METRICS
Consolidated | ||
$'000 / % | 31 Dec 21 | 31 Dec 20 |
In‑force premiums (ex Genus) at period end | 226,472 | 142,389 |
New business Sales (annualised premium) | 40,177 | 31,645 |
Net insurance premium revenue | 30,845 | 21,306 |
Net insurance premium revenue growth | 45% | 28% |
Underlying gross insurance margin | 15% | 18% |
Underlying Administration expense ratio | 10% | 12% |
Investment return | 0.1% | 0.2% |
Underlying NPAT | 4,580 | 3,107 |
Underlying NPAT growth | 47% | |
IN‑FORCE PREMIUM AND NEW BUSINESS
In‑force premiums are the key value driver of NobleOak's business, and the Company was pleased to deliver strong in‑force premium growth of 59% on the prior corresponding period to $226.5 million, which is 12% ahead of the Prospectus forecast. This growth was driven by a good sales performance, particularly in the Strategic Partner Segment and continued low lapse rates across both the Direct and Strategic Partner Segment.
New business sales for the six months were $40.2 million, up 27% on the prior corresponding period, as NobleOak continued to achieve strong market share gains in both the direct and intermediated channels. In HY22, sales also benefited from heightened customer activity in the lead up to the 1 October 2021 deadline by which all insurers were required to launch new IDII products in accordance with new regulatory standards. This effectively brought insurance sales forward.
Customer insurance purchasing activity has decreased across the industry since the introduction of the new IDII products. For NobleOak, this has resulted in a reduction in new business sales, which has been offset by a continuation of lower lapse rates. While the outcome for the IDII market is not yet clear, NobleOak anticipates sales in the second half of FY22 to be lower than its Prospectus forecasts which will likely offset the above prospectus forecast sales in the first half of FY22. Importantly, however, the Company expects in-force premiums to be above its Prospectus forecast due to a continuation of lower than expected lapse rates. The Company will remain nimble in its approach until market activity normalises, ensuring it is competitive while managing within its risk appetite.
NobleOak Life Limited Appendix 4D | 4 |
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NobleOak Life Ltd. published this content on 27 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 February 2022 22:11:09 UTC.