LONDON (Alliance News) - Life assurance provider Hansard Global PLC Thursday said its full-year profit on an IFRS basis was down, with the company blaming litigation settlements for the drop in performance.
Hansard, which provides life assurance primarily in the Far East, Latin America and the Middle East, said it made a GBP10.7 million pretax profit on an IFRS basis, down 8% from the GBP11.1 million for the corresponding period last year. It put the decline down to GBP1.6 million in settlements arising from litigation, as well as a GBP400,000 charge in relation to closing Hansard Europe to new business.
Hansard cut its recommended final dividend to 4.75 pence, down from 8 pence last year.
Hansard said it would have made a GBP12.7 million pretax profit without the "exceptional items" arising from litigation expenses.
Hansard made the decision to reduce its exposure to Europe in order to "focus its activities in future on higher margin growth markets," according to the company on February 28. The division was closed to new business on June 30. Hansard Europe agreed a EUR1.5 million settlement in relation to an underlying claim of approximately EUR5.5 million in Norway on June 21.
Most of Hansard's new written premiums include recurring payments and it wrote GBP156.2 million of new recurring premiums, up 26%. Hansard said its new focus on writing premiums that see recurring payments from customers would increase its profit margins, which was reflected by increased profit margins in new business written. The margin on new business increased 2.4 percentage points to 12% after the company scaled back on new single payment business scales, which were down 37% to GBP32.5 million.
The European division had been served with writs totalling EUR14 million at the beginning of the financial year, relating to policyholder complaints and other asset performance-related issues, though Hansard said that since it does not provide investment advice it believed the the complaints have no merit.
The writs included the Norway litigation, asset performance in Italy of EUR4 million and Madoff-related litigation of EUR1.7 million.
Hansard Global shares were Thursday quoted at 121.06 pence, up 3.06 pence, or 2.6%.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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Hansard (HSD)