GlobalCapital plc - Full-Year Results

Wednesday, May 8th, 2019

On 7 May 2019, GlobalCapital plc published its Annual Report and Financial Statements for the year ended 31 December 2018.

Performance Overview

During 2018, GlobalCapital registered a pre-tax profit of €1.17 million compared to €4.64 million in 2017. The decline in profitability was mainly due to lower fair value gains in investment property which amounted to €1.7 million in 2018 compared to €2.1 million in 2017, as well as a net loss of €2.2 million on financial investments compared to a gain of €1.05 million in 2017. In this respect, the company also explained that GlobalCapital Life Insurance Limited registered a 4% drop in total gross written premium to €12 million compared to €12.6 million in 2017 as the growth in ordinary business (mainly comprising protection and unit linked products) was outweighed by a contraction in the demand for interest sensitive single premium business.

Similarly, GlobalCapital Health Insurance Agency Limited reported a decline in pre-tax profitability to €0.2 million compared to €0.7 million in the previous comparable period. This reduction mainly reflects the impact of a provision for inter-company balances receivable and, to a lesser extent, an increase in administrative costs. Meanwhile, GlobalCapital Financial Management Limited reported a loss before tax of €0.92 million compared to nearly a break-even position in 2017. The financial performance of GlobalCapital Financial Management Limited was negatively impacted by a reduction in demand for its services amid an increased competitive landscape, an impairment of inter-company balances receivable, higher provisions for claims as well as increased administrative costs.

The Statement of Financial Position shows an 8.1% increase in total assets to €137.8 million, largely reflecting higher value of technical provisions, investment property, other investments and cash balances. Similarly, total liabilities grew by 9.3% to €119.3 million on account of higher technical provisions. Overall, the company’s equity base increased marginally to €18.5 million which, in turn, translates into a net asset value per share of €0.616 (31 December 2017: €0.608).

Outlook

In their commentary, the Directors of GlobalCapital made reference to the company announcement dated 23 March 2018 related to the application requesting the admissibility to listing of new ordinary shares pursuant to a €6 million rights issue. In this respect, GlobalCapital added that the proposed rights issue is expected to be completed during 2019 and that the additional equity to be raised is directed at supporting the company’s business strategy and for settling intercompany balances. Moreover, the proposed amount of the rights issue is considered to be appropriate to strengthen the capital levels of GlobalCapital in the context of the evolving business and regulatory environment.

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GlobalCapital plc – 2018 Annual Report & Financial Statements.

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