Middlesea's pre-tax profit rises by 9.4 per cent

The strong financial fundamentals and clear strategy of the Middlesea Group enabled it to register most encouraging results for the year 2007, notwithstanding various challenges including the high volatility in the international capital markets, executive chairman Mario Grech told shareholders yesterday.

Mr Grech said that through the consistent growth in premium income (both general and long-term business), the shareholders would continue to benefit from the Group's strategy based on the attainment of a balanced business mix from a geographical spread through varied distribution.

All companies within the Group contributed to the generation of this year's pre-tax profit of €9.3 million (Lm4 million), which represented an improvement of 9.4 per cent on 2006.

"This is the result of increased market shares and adherence to strict underwriting controls coupled with the management of expenses," Mr Grech said.

The Group remained subject to taxation in the territories where business is underwritten. The provision for taxation of €2.4 million (Lm1.03 million) for the financial year 2007 significantly impacted the post-tax profit of €6.91 million (Lm2.97 million), which reflected a reduction of 7.95 per cent over 2006. Dissimilarity between the tax charge for these years also reflected a one-time favourable adjustment carried in 2006.

The board recommended a final dividend to shareholders of €0.1281 (Lm0.055) per share, amounting to €3.2 million (Lm1.38 million), an increase of 22.2 per cent over the 2006 distribution.

The board also proposed an increase in the authorised and paid-up value of each share in issue from €0.582343 (the euro equivalent of the current value of Lm0.25) to €0.60. This increase would be funded through the capitalisation of distributable reserves amounting to €441,425.

Mr Grech said that shareholders' funds increased by five per cent to €82.6 million (Lm35.5 million) at the end of last year. This was in line with the company's commitment to its shareholders to maximise the value of their investment over time. The net asset value per €0.582343 (Lm0.25) share was strengthened further to €3.3 (Lm1.42).

In line with the Group's growth strategy, the gross written premium (excluding individual life) from Malta, Italy and Gibraltar for the financial year 2007 showed a record increase of 24.3 per cent over the previous year. The total premium generated amounted to €104.2 million (Lm44.7 million).

Efficiency in claims handling, coupled with the Group's continuous focus on disciplined underwriting criteria and strict cost control, yielded an increase of 15.5 per cent in the technical results amounting to €6.96 million (Lm2.99 million). Furthermore, the overall claims reserve increased by 13 per cent to €109 million (Lm46.9 million).