Interim Results
August 20 2002 - 2:30AM
UK Regulatory
RNS Number:1327A
Coventry Building Society
20 August 2002
Coventry announces outstanding results for half year
Coventry Building Society, the UK's fifth largest building society, has today
announced outstanding results for the six months ending 30 June 2002.
Key highlights for the half year include:
* Over 8% growth in commercial assets in first six months
* Record gross lending of #981 million - almost 14% up on first half of
2001
* Net lending of #471 million - 40% above 'natural' market share
* Record net savings receipts of #377 million - about one and a half times
'natural' market share
* Pre-tax profits increased to #20.4 million - up 6.8%
* Costs to average assets ratio reduced again to 0.66% - well below peer
group
* Mortgage arrears remain significantly better than industry average
Commenting upon the results, Martin Ritchley, Chief Executive said:
"It's a pleasure to announce another set of outstanding results for the first
half of 2002. We've outperformed the sector on virtually every key measure of
performance - whether you look at commercial asset growth, net savings receipts
or cost efficiency. These excellent results build upon the consistently strong
performance we've been able to report over a number of years.
"A further reduction in our management expenses ratio, down from 0.69% to 0.66%
of average
assets, underpins the Coventry's position as one of the most cost efficient
lenders in the UK.
"This established position as a low cost provider is reinforced by our status as
a building society, with no dividends to pay to outside shareholders. In a
climate of narrowing interest margins, these two important competitive
advantages mean that we've been able to respond positively to attract
substantial new business, as well as benefiting our existing savers and
borrowers. Our total assets have now increased to almost #7.5 billion,
reflecting impressive growth in commercial assets of over 8% in the first six
months.
"Gross mortgage advances, at #981 million, are significantly above our previous
record total of #861 million achieved in the first half of 2001. Net lending at
#471 million was 40% above the Society's 'natural' market share. This
performance demonstrates the success of our multi-channel approach to
distribution, with strong contributions being made from our branch network,
internet and telephone channels, as well as from our intermediary partners.
"We've also seen strong growth in net savings receipts, helped by the lack of
confidence in the stock market. We've been able to report a record half year
total of #377 million, 16% above the comparable figure for 2001 and about one
and a half times our 'natural' market share. With our continued focus on cost
control, pre-tax profits were up by almost 7% to #20.4 million. This trend has
enabled us to maintain our financial strength, with each of our key capital
ratios having improved since the start of the financial year.
"These are impressive results which demonstrate yet again the advantages of
being a building society with no outside shareholders to satisfy - the Coventry
can look forward to the future with confidence."
Unaudited Society Results
For the half year ended 30 June 2002
Key Results Half Year Year Ended Half Year
Ended
Ended 31.12.01
30.06.01
30.06.02 (as restated) (as
restated)
#m #m
#m
Pre tax profits 20.4 42.1
19.1
Mortgage provisioning 1.8 2.7
1.6
Gross lending 981 1,490
861
Net lending 471 616
486
Net receipts from shares (2) 377 619
324
Total assets 7,468 7,176
6,884
Key Ratios Half Year Year Ended Half Year
Ended
Ended 31.12.01
30.06.01
30.06.02 (as restated) (as
restated)
% % %
Asset growth 4.07 11.99
7.43
Commercial asset growth 8.13 11.84
9.34
Gross capital 6.11 5.91
5.92
Free capital 6.16 5.90
5.91
Net interest margin (3) 1.03 1.08
1.09
Management expenses to average assets (3) 0.66 0.67
0.69
Profit before tax to average assets (3) 0.56 0.62
0.58
Income and Expenditure Account Half Year Year Ended Half Year
Ended
Ended 31.12.01
30.06.01
30.06.02 (as restated) (as
restated)
#m #m #m
Net interest receivable 37.4 73.6
36.0
Other income and charges 8.9 16.7
7.5
Total income 46.3 90.3
43.5
Management expenses (24.1) (45.5)
(22.8)
Provisions for bad and doubtful debts (1.8) (2.7)
(1.6)
Profit before tax 20.4 42.1
19.1
Tax (6.4) (12.6)
(5.6)
Profit after tax 14.0 29.5
13.5
Statement of total recognised gains and losses Half Year Year Ended Half Year
Ended
Ended 31.12.01
30.06.01
30.06.02
#m #m
#m
Profit for the financial period 14.0 29.5
13.5
Prior year adjustments 2.4 -
-
Total gains and losses recognised since last 16.4 29.5
13.5
reporting period
As at As at As at
30.06.01
Balance Sheet 30.06.02 31.12.01 (as
restated)
#m (as restated) #m
#m
Assets
Liquid assets 1,141.5 1,331.9
1,169.4
Mortgages 6,277.0 5,804.8
5,674.8
Fixed assets 26.4 28.9
27.9
Other assets 23.3 10.8
11.7
Total assets 7,468.2 7,176.4
6,883.8
Liabilities
Shares 5,555.2 5,178.1
4,883.3
Borrowings 1,446.4 1,574.2
1,586.3
Other liabilities 38.5 25.0
31.1
Subordinated liabilities 35.0 20.0
20.0
Permanent interest bearing shares 40.0 40.0
40.0
Reserves 353.1 339.1
323.1
Total liabilities 7,468.2 7,176.4
6,883.8
Cash Flow Statement Half Year Year Ended Half Year
Ended
Ended 31.12.01
30.06.01
30.06.02
#m #m #m
Net cash inflow from operating activities (29.2) 79.3
76.9
Returns on investments and servicing of finance (2.4) (4.8)
(2.4)
Taxation (6.0) (14.8)
(5.1)
Capital expenditure and financial investment:
Purchase of investment securities (984.7) (2,096.0)
(1,037.5)
Sale and maturity of investment securities 976.2 2,024.0
948.9
Purchase of fixed assets (0.8) (4.6)
(2.0)
Sale of fixed assets - 0.1
-
Finance lease payments (0.1) (0.2)
(0.2)
Financing
Issue of subordinated liabilities 15.0 20.0
20.0
(Decrease)/increase in cash (32.0) 3.0
(1.4)
Notes to the accounts.
(1) Comparative figures have been restated to reflect a change of accounting
policy on adoption of FRS 19 Deferred Tax. In addition, balance sheet
comparatives have been restated following publication of ICAEW Tech 20/01
Mortgage Lenders-Accounting for self insurance, which requires that deferred
mortgage indemnity guarantee premiums held on the balance sheet be netted off
against mortgage balances. Previously they were included within accruals and
deferred income, which forms part of the other liabilities balance on this
statement.
(2) Includes interest added to the accounts.
(3) Net interest margin, management expenses as a percentage of average
assets and profit before tax as a percentage of average assets have been
calculated on an annualised basis taking into account the number of days in the
six month period.
For more information or additional comment please contact
David Stewart ACA, Finance Director
On (0845) 7665522
Visit our websites: www.coventrybuildingsociety.co.uk www.Remortgages.co.uk
Telephone calls may be monitored or recorded for your protection or for training
purposes
Coventry Building Society introduces only to Norwich Union Marketing Group,
members of which are regulated by the Financial Services Authority, for life
assurance, pensions and investments.
This information is provided by RNS
The company news service from the London Stock Exchange
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