During the year HCF acquired ownership
of Manchester Unity Ltd. The results
of this business are included in the group
result from the date of acquisition being
24 December 2008. Group for the
purpose of this report means HCF Health,
HCF Life and Manchester Unity.
Total revenue for the Group was
$1,319 million. This included revenues
from the Manchester Unity business
from the date of acquisition totalling
$129 million.
The surplus is 42% lower than the
previous year. This is a direct result
of the effects felt on our investment
earnings in the current year from the
Global Financial Crisis. HCF remains
financially sound with total assets of
$1,141 million, and Guarantors’ equity
of $580 million.
Income Statement
The income statement reflects the 12 month
performance of HCF Health, HCF Life
and the performance of Manchester Unity
from 24 December 2008.
Surplus
The Group surplus was $21.5 million
after allowing for a donation of
$1 million to the HCF Medical and
Health Research Foundation. It includes:
- $22.0 million surplus from HCF;
- $70,000 surplus from HCF Life;
- $30,000 loss from Manchester Unity; and
- $0.5 million amortisation of the MU customer list.
The Group result includes $7.5 million
of non recurring costs directly associated
with the acquisition and integration of
Manchester Unity Ltd. Of these $2.4m
is reflected in the books of HCF and
$5.1m in Manchester Unity.
This result represents a return on
operating revenue of 1.8%.
Contribution/Premium Income
HCF health insurance business
contribution income increased by
$110.7 million to $1,192.1 million.
Net premiums on life insurance policies
were $17 million, an increase of 10%.
The contribution/premium income for
Manchester Unity was $116.4 million.
The income for the Retirement and
Aged Care facilities was $7.4 million.
(Refer to page 4 for more information)
Claims
Total claims payable for HCF Health
and HCF Life were $1,067.6 million,
9.4% higher than last year, including:
- $1,065.1 million paid as health insurance benefits and
- $2.5 million as life insurance claims.
Total claims payable for Manchester Unity was $98.4 million.
Life Policies
Policyholders’ liabilities decreased
by $1.5 million.
Management Expenses
The management expenses for HCF
Health and HCF Life increased by
9.7% to $104.6 million. Merger
and acquisition costs related to the
Manchester Unity business was the
main factor.
The management expenses for
Manchester Unity were $30.6 million.
Management expenses include $5.1m of
non recurring costs directly associated
with the integration of Manchester
Unity and HCF incurred since the
date of acquisition.
Investment and Other Income
The investment and other income for
HCF Health and HCF Life was a loss
of $18.4 million.
The investment and other income for
Manchester Unity was $5.4 million.
Tax
Income tax expense of $100,000
was payable by HCF Life.
Income tax expense of $35,000
was payable by Manchester Unity.
Cash Flow
Net cash flow from operating
activities was $65.4 million, an
increase of $19.8 million.
Cash flows from investing activities
included $7.1 million for purchases of
plant and equipment and $242.8 million
for the purchase of Manchester Unity.
Balance Sheet
Guarantors’ equity increased by
$17.2 million to $579.8 million.
(Refer to balance sheet for more information)
Assets
Total assets are $1,141.9 million; an
increase of $252.0 million. This increase
mainly reflects the assets acquired
through the purchase of Manchester
Unity and its associated benefit funds.
Capital Expenditure
Significant items of capital expenditure
during the year include:
- Improvements to software systems: $2.3 million;
- Improvements to branches: $1.9 million;
- Equipment: $1.6 million; and
- HCF House refurbishment: $0.4 million.
Liabilities
Total liabilities rose by $234.8 million to
$562.1 million. The major components
of liabilities were:
- Liabilities acquired through the purchase of Manchester Unity $131.0 million;
- Net Manchester Unity benefit fund member liabilities: $110.7 million;
- Net life insurance policyholders’ liabilities: $18.8 million, a decrease of $3.0 million;
- Claims liabilities: $122.2 million, an increase of $0.2 million;
- Unearned premium liabilities: $172.7 million, an increase of $15.6 million; and
- Provisions: $16.1 million, an increase of $0.9 million.
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HCF Health Fund
revenue increased
by 10.2% to
$1,192 million.
We paid 9.4% more for
our members
in claims:
$1,067.6 million
HCF remains
financially sound
with Total Assets
of $1,141 million
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