Aug 2008 Financial News

SFC Releases Half Year Results

Aug 20, 2008

Sagicor Financial Corporation
Results for the Half Year Ended June 30, 2008

All figures quoted in United States Dollars unless otherwise stated

Earnings Per Share
Sagicor Financial Corporation (SFC), for the Half Year Ended June 30, 2008, reported a diluted Earnings Per Share (EPS) of 12.0 cents. This represented an increase of 26.3 per cent or 2.5 cents on the corresponding EPS of 9.5 cents in HY07. Q208 on Q207, the Group’s EPS rose 22.4 per cent or 1.3 cents from 5.8 cents to 7.1 cents. Included in the Half Year results was a gain arising on acquisition of $4.6 million. Excluding this gain, the Group’s EPS was up approximately 16 per cent, from 9.5 cents (HY07) to 11 cents (HY08).

Financial Highlights
• Net Premium Revenue, up an outstanding 47.9 per cent or $92.5 million to $285.8 million. According to the Chairman, the Sagicor at Lloyd’s business contributed significantly to this growth.
• Net Investment and Other Income, up 17.5 per cent or $25.5 million to $171.3 million
• Total Revenue, up 36.2 per cent or $122.6 million to $461.7 million
• Net Benefits, up 33.3 per cent or $60.5 million to $242.2 million
• Expenses, up 44.6 per cent or $50.8 million to $164.5 million
• Total Benefits and Expenses, up 37.7 per cent or $111.3 million to $406.7 million
• Group Net Income, up a significant 25.4 per cent or $9.2 million to $45.4 million
• Net Income Attributable to Shareholders, up 31.2 per cent or $7.9 million to $33.3 million

Dividends
The Board of Directors has approved an interim dividend of US 3 cents per share.

Recommendation
In light of these results we are revising our forecasted EPS for FY08 upwards to TT$2.25. At the current price of TT$18.35, SFC is trading at a P/E multiple of 8.2 times. Additionally, using a multiple of 11 times and the revised forecasted EPS, this share has an expected return of approximately 35 per cent or a target price of TT$24.75. We currently recommend a BUY on this share.


Nancy Chen
WISE Equity Research Team