General Accident PLC Preliminary results for the year 31 December 2020 (1028R)
March 04 2021 - 4:00AM
UK Regulatory
TIDMGACA
RNS Number : 1028R
General Accident PLC
04 March 2021
INFORMATION FOR GENERAL ACCIDENT PLC PREFERENCE SHAREHOLDERS
GENERAL ACCIDENT PLC
Preliminary Announcement of results for the year ended 31
December 2020
These results are published for the benefit of preference
shareholders of General Accident plc ("the Company") for the year
ended 31 December 2020. The preference shares have remained listed
on the London Stock Exchange following the merger of the Company
with Commercial Union plc, in June 1998 to form CGU plc ("CGU"),
and the subsequent merger of CGU with Norwich Union plc in May 2000
to form Aviva plc (formerly CGNU plc).
The Company transferred its interest in its subsidiaries to its
parent company, Aviva plc, in 2005, in return for an inter-company
loan. The income of the Company for the year ended 31 December 2020
consists of interest received on this loan.
The principal risks and uncertainties facing the Company
are:
- Credit risk: the net asset value of the Company's financial
resources is exposed to the potential default on the loans and
short-term receivables due from its parent, Aviva. The external
issuer credit rating (representing an issuer's ability to meet its
overall financial commitments as they fall due) is A.
- Interest rate risk: The net asset value of the Company's
financial resources has previously been exposed to fluctuations in
interest rates. Interest rate risk is a risk the Company has
historically chosen to accept rather than reduce or mitigate, as
although it may materially impact the results of the Company, it
does not impact the Company as a going concern, as the Company has
no operating expenses and a loan structure in place which generates
more than adequate income, even at zero LIBOR rates, to cover the
annual cost of those dividends. From January 2021 the loan has been
set at a fixed rate for 5 years, due to LIBOR being abolished, and
going forwards the interest rate risk will be mitigated.
- COVID-19: On 11 March 2020, the World Health Organization
declared the outbreak of a strain of novel coronavirus disease,
COVID-19, a global pandemic. Governments in affected areas have
imposed a number of measures designed to contain the outbreak,
including business closures, travel restrictions, stay at home
orders and prohibition of gatherings and events. The spread of
COVID-19 has had a significant impact on the global economy,
causing volatile equity markets and falls in interest rates. The
Company continues to maintain a positive net asset value and since
the onset of the pandemic the Company has remained operational,
despite the loan interest rate dropping. The 5 year fixed interest
rate which commenced in January 2021 will result in the loan
bearing sufficient interest to cover the preference share dividends
due per annum, hence the company will continue to remain
operational.
Exposure to credit risk, interest rate risk, and COVID-19 is
managed through the monitoring of several risk measures.
The Company is part of the Aviva group ("Group") and Aviva plc
owns 100% of the Company's ordinary issued share capital.
Summarised income statement Audited Audited
results results
12 months to 12 months to
31 December 31 December
Statutory results 2020 2019
GBPm GBPm
Investment income 120 161
-------------------------------------- ------------- -------------
Total income 120 161
Profit on ordinary activities before
tax 120 161
Tax on profit on ordinary activities - -
-------------------------------------- ------------- -------------
Profit for the period 120 161
-------------------------------------- ------------- -------------
Basic earnings per share (pence) 0.52 0.73
-------------------------------------- ------------- -------------
Summarised statement of financial Audited Audited
position
31 December 31 December
2020 2019
GBPm GBPm
Total assets 13,932 13,934
----------------------------------- ------------- -------------
Equity attributable to ordinary
shareholders 13,682 13,684
Preference share capital 250 250
Total equity 13,932 13,934
Liabilities - -
----------------------------------- ------------- -------------
Total equity and liabilities 13,932 13,934
----------------------------------- ------------- -------------
Statement of changes in equity Audited Audited
results results
12 months to 12 months to
31 December 31 December
2020 2019
GBPm GBPm
Total equity at 1 January 13,934 13,934
Profit for the period 120 161
Total comprehensive income for
the period 120 161
Dividends (122) (161)
Total equity at 31 December 13,932 13,934
----------------------------------- ------------- -------------
Summarised statement of cash flows Audited Audited
results results
12 months 12 months to
to
31 December 31 December
2020 2019
GBPm GBPm
Cash flows from financing activities - -
-------------------------------------------- ------------ -------------
Net cash from financing activities - -
-------------------------------------------- ------------ -------------
Total net increase/(decrease) in - -
cash and cash equivalents
Cash and cash equivalents at 1 January - -
-------------------------------------------- ------------ -------------
Cash and cash equivalents at 31 December(1) - -
-------------------------------------------- ------------ -------------
(1) The closing balance as at 31 December 2020 is GBP475 (2019:
GBP179). The majority of the Company's cash requirements are met by
fellow Group companies.
Basis of preparation
The preliminary announcement for the year ended 31 December 2020
was approved by the Board of Directors on 3 March 2021. The
preliminary announcement for the year ended 31 December 2020 is
prepared on the basis of the accounting policies set out in the
annual accounts. Audited statutory accounts, together with the
auditor's report thereon, will be filed with the Registrar of
Companies when approved and published.
The Company's Annual Report and Accounts for 2019 have been
filed with the Registrar of Companies. The results for the year
ended 31 December 2019 and 2020 were audited by
PricewaterhouseCoopers LLP. The auditor's report was unqualified
and did not contain a statement under section 498(2) or section
498(3) of the Companies Act 2006.
The audited annual reports and accounts of both the Company and
of Aviva plc for the year ended 31 December 2020, once published,
will be available on application to the Group General Counsel and
Company Secretary, Aviva plc, St Helen's, 1 Undershaft, London,
EC3P 3DQ. Copies will be made available on the Aviva plc website
once published at
http://www.aviva.com/investor-relations/reports/.
Enquiries: Jakub Rosochowski , Investor Relations Director,
Aviva plc, jakub.rosochowski@aviva.com, 020 7662 8115
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END
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