GENERAL ACCIDENT PLC

Earnings Release • Aug 6, 2020

National Storage Mechanism | Additional information

RNS Number : 3407V

General Accident PLC

06 August 2020

INFORMATION FOR GENERAL ACCIDENT PLC PREFERENCE SHAREHOLDERS

GENERAL ACCIDENT PLC

Unaudited results for the six months ended 30 June 2020

These results are published for the benefit of preference shareholders of General Accident plc (the Company) for the six months ended 30 June 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 (Aviva) in 2005, in return for an inter-company loan with Aviva. The income of the Company for the six months to 30 June 2020 consists of interest received on this loan.  

The principal risks and uncertainties facing the Company for the remainder of the year 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 is exposed to potential fluctuations in interest rates impacting investment income. Interest rate risk is a risk the Company chooses 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.

-       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. The spread of COVID-19 has resulted in an economic downturn in the global economy. Whilst there has been a fall in LIBOR rates since the onset of COVID-19, the loan with Aviva has a floor set for LIBOR of zero. Therefore, interest income will continue to be generated in the circumstance that LIBOR falls below zero. The ability to pay future preference share dividends is not affected.  

The Company is part of the Aviva group (Group) and Aviva owns 100% of the Company's ordinary issued share capital.

Summarised income statement	Unaudited	Unaudited
	results	results
	6 months to	6 months to
	30 June	30 June
	2020	2019
	£m	£m
Investment income	75	82
Total income	75	82
Profit on ordinary activities before tax	75	82
Tax on profit on ordinary activities*	-	-
Profit for the period	75	82
Basic earnings per share (pence)	0.3	0.4

* Tax on investment income is £nil due to losses surrendered by another Aviva group company free of charge to cover any tax liabilities arising on the Company's profits.

Summarised statement of financial position	Unaudited	Audited
30 June	31 December
2020	2019
£m	£m
Total assets	13,998	13,934
Equity attributable to ordinary shareholders	13,748	13,684
Preference share capital	250	250
Total equity	13,998	13,934
Liabilities	-	-
Total equity and liabilities	13,998	13,934
Statement of changes in equity	Unaudited	Unaudited
results	results
6 months to	6 months to
30 June	30 June
2020	2019
£m	£m
Total equity at 1 January	13,934	13,934
Profit for the period	75	82
Total comprehensive income for the period	75	82
Dividends	(11)	(11)
Total equity at 30 June	13,998	14,005

Summarised statement of cash flows	Unaudited	Unaudited
results	results
6 months to	6 months to
30 June	30 June
2020	2019
£m	£m
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 30 June1	-	-

¹   The closing balance as at 30 June 2020 is £598 (2019: £199). The majority of the Company's cash requirements are met by fellow Group companies.

Basis of preparation

The results for the six months to 30 June 2020 have been prepared on the basis of the accounting policies set out in the Company's 2019 Annual Report and Accounts.  The interim accounts do not constitute statutory accounts as defined by section 434 of the Companies Act 2006. The auditor has reported on the 2019 accounts and the report was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.  The Company's 2019 Report and Accounts have been filed with the Registrar of Companies.

During the period, there have been no changes in the nature of related party transactions from those described in the Company's 2019 accounts.

The results for the six months are unaudited.

The unaudited results of Aviva for the six months ended 30 June 2020 are available on application to the Group Company Secretary, Aviva plc, St. Helen's, 1 Undershaft, London EC3P 3DQ.  A copy can also be found on the Aviva plc website at www.aviva.com.

Going concern

A going concern review has been undertaken as part of the 2020 interim reporting process. After making enquires, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence over a period of at least twelve months from the date of approval of the interim accounts. For this reason, the Company continues to adopt the going concern basis in preparing the interim accounts.

Responsibility statement

The directors confirm that these condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union and as issued by the IASB and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

(a)        An indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

(b)        Material related party transactions in the first six months and any material changes in the related party transactions described in the last annual report.

K A Cooper                            A Montague                                        J Windsor

Director                                   Director                                               Director

Enquiries:

Chris Esson, Investor Relations Director, Aviva plc          020 7662 8115

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