LifeStar Holding plc - Full-Year Results

On 22 April 2021, LifeStar Holding plc (“LifeStar”) published its Annual Report and Financial Statements for the year ended 31 December 2020.

Performance Overview

During 2020, LifeStar registered a pre-tax loss of €1.1 million compared to a pre-tax profit of €2.1 million in 2019. The loss was primarily due to adverse movements in the value of financial assets and investments which amounted to €2.2 million compared to a gain of €2.1 million in 2019. This loss was partly offset by a fair value gain of €2.1 million on investment property which was much higher than the gain of €0.5 million recorded in the previous comparable period.

With respect to the performance of the Group’s three principal subsidiaries, LifeStar Health Limited registered a profit before tax of €1.0 million compared to a pre-tax profit of €0.3 million in 2019 on the back of higher revenues but lower administrative costs. In contrast, GlobalCapital Financial Management Limited recorded a loss before tax of €0.5 million compared a loss of €1.2 million in 2019 reflecting a decrease in administrative expenses of €0.4 million following a change in the recharges structure between Group companies, as well as an increase in other income of €0.3 million which pertains to an administrative fee for services rendered to LifeStar Insurance Limited.

Meanwhile, LifeStar Insurance Limited (“LifeStar Insurance”) registered an increase in single premium and unit linked businesses but experienced a slight decline in ordinary business which is mainly related to protection solutions. Gross written premium for the year amounted to €13.2 million compared to €12 million in 2019. However, benefits and claims incurred increased substantially by €1.96 million (net of reinsurance) whilst the company also incurred losses due to the negative performance of financial investments and other technical provisions. As a result, LifeStar Insurance reported a loss before tax of €0.4 million compared to a pre-tax profit of €2.0 million in 2019. The company’s net asset value remained virtually unchanged at around €29 million.

The Statement of Financial Position of LifeStar showed a further increase of 8.2% in total assets to €166.3 million, largely reflecting higher values of investment property (+9.8% to €25.1 million), other investments (+6.3% to €83.6 million), reinsurers’ share of technical provisions (+18.1% to €20.7 million), and cash balances (+15.7% to €18.3 million). Similarly, total liabilities grew by almost 10% to €147.9 million, primarily on account of higher technical provisions (+10.6% to €124.4 million) and borrowings. In fact, during 2020, LifeStar took on a loan of €3 million, repayable over an eight-year period, from Bank of Valletta plc which falls under the Malta Development Bank ‘COVID-19 Loan Guarantee Scheme’. Overall, the equity base of LifeStar contracted by 3.3% to €18.4 million which, in turn, translates into a net asset value per share of €0.6149.

Outlook

In their commentary, the Directors of LifeStar explained that during 2020, the Group continued to undertake restructuring and transformation activity to align its business operations with the new strategy which is designed to permanently resolve various legacy issues. This includes the strengthening of the Group’s capital base via the IPO of LifeStar Insurance and the related Share Exchange Offer, as well as a new subordinated bond to be issued by LifeStar Insurance.

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LifeStar Holding plc – 2020 Annual Report & Financial Statements.

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