Hansard Regulatory News (HSD)

Hansard Global plc

("Hansard" or the "Company")

Interim Management Statement

Hansard Global plc ("Hansard" or "the Group"), the specialist long-term savings provider, issues its second interim management statement in the financial year ending 30 June 2010, covering the ten month period ended 30 April 2010, except where indicated.

Summary

·; New business momentum continues at industry leading margins:

- Present Value of New Business Premiums ("PVNBP") of £61.3m for the four months ended 30 April 2010 is 34% above the corresponding period;

- PVNBP for the ten months ended 30 April 2010 is £134.9m (2009: £138.7m);

- New business margins are 6.9% on PVNBP basis for the nine months ended 31 March 2010, compared to 5.8% in the first three months of the year;

·; IFRS profit before tax for the nine months to 31 March 2010 of £13.8m remains affected by reduced interest income (2009: £18.8m);

·; £1.2 billion of Assets under Administration at 31 March 2010, up 22.9% since 30 June 2009. Positive policyholder cash flows have been maintained throughout the period;

·; Increased interim dividend of 5.5p per share paid on 31 March 2010 (2009: 5.25p);

·; The financial position of the Group remains very strong, with no debt.

Leonard Polonsky, Chief Executive of Hansard Global plc, commented:

"The performance of the Group in the first ten months of the financial year was encouraging despite the challenging conditions and uncertain economic outlook. New business momentum identified earlier this year has continued and we have achieved increasing new business flows from Latin America and the Far East leading to improved margins since the first three months of the year. Strong cash flow from policyholders has underpinned growth in Assets under Administration. The financial position of the Group continues to be very strong with no borrowings.

"We are optimistic that new business for the full financial year will at least equal the levels of the previous year. We are confident that the outlook for sustained growth in new business and profitability in the longer term remains positive for the Group. Our focus on margins, cashflow, cost control and continued investment in distribution and systems leaves us well placed for the future."

For further information:

Hansard Global plc +44 (0) 1624 688000

Leonard Polonsky, Chief Executive

Gordon Marr, Managing Director

Vince Watkins, Chief Financial Officer

Pelham Bell Pottinger +44 (0) 20 7861 3232

Daniel de Belder

Hansard Global plc

INTERIM MANAGEMENT STATEMENT

OVERVIEW

New business momentum identified earlier this year has continued, reflecting an improvement in market conditions and the continuing level of interest in Hansard's products among intermediaries and their clients. On the basis of Present Value of New Business Premiums ("PVNBP"), new business flows of £61.3m in the four months to 30 April 2010 are 34% above the corresponding period.

Throughout the nine months to 31 March 2010, the Group has continued to generate IFRS profit backed by positive cashflows from existing policies. The Group continues to manage administrative and related expenses strictly while investing in distribution infrastructure. Fee and commission income for the nine months is £39.6m (2009: £38.4m). IFRS profit for the nine months is £13.8m before tax (2009: £18.8m). While underlying trading results show growth compared with the corresponding period of the previous financial year, the reduction in profit is primarily a result of the decline in interest rates during the previous financial year. The Group continues to be strongly capitalised enabling it to satisfy operational, regulatory and shareholder expectations.

On the PVNBP basis, new business margins for the nine month period ended 31 March 2010 are 6.9%. This margin is consistent with that earned in the six months to 31 December 2009 and significantly higher than the 5.8% earned in the first three months of this financial year, largely as a result of increased volumes of new business.

While overall persistency continues to improve, EEV operating profit for the nine months ended 31 March 2010 is affected by premium reductions and other issues arising from the volume of new business. EEV operating profit for the nine months is £10.0m after tax (2009: £12.3m).

Despite the volatility in capital markets and exchange rates, positive policyholder cash flows have been experienced in the period. The value of Assets under Administration as at 31 March 2010, at £1.23bn, has risen by 22.9% since 30 June 2009 (£1.002bn). This represents a steady improvement in new business flows.

FINANCIAL PERFORMANCE AND POSITION - NINE MONTHS TO 31 MARCH 2010

·; International Financial Reporting Standards ("IFRS")

IFRS profit for the period was underpinned by positive cashflows from existing policies. We continue to manage our cost base effectively and are seeing the benefit of the initiatives implemented in the previous financial year to reduce administrative and other expenses, while continuing to invest in the Group's sales and distribution infrastructure.

While underlying trading results show growth compared with the corresponding period of the previous financial year, comparisons of reported IFRS profit continue to reflect reduced investment income on the Group's cash balances in the current financial year. IFRS profit before tax for the nine months was £13.8m (2009: £18.8m) including approximately £2.1m (2009: £7.6m) of investment income, foreign exchange gains and other income.

Included in IFRS profit are expenses totalling £0.4m relating to specific projects to improve the functionality of Hansard Online, implement new business initiatives and streamline administrative processes. We anticipate that expenditure totalling approximately £0.7m will be incurred in the current financial year on these projects and a similar amount in the following financial year.

·; European Embedded Value ("EEV")

The profitable new business written during the period, the persistency of cash flows and the lack of options, guarantees or other such features within the products issued by the Group, have continued to generate EEV operating profits. While overall persistency continues to improve, EEV operating profit is reduced by the effects of premium reductions and other issues arising from the level of new business and continued investment in distribution infrastructure. EEV operating profit for the nine months ended 31 March 2010 is £10.0m after tax (2009: £12.3m), after adjusting for £4.3m for the impact of current period (£2.3m) and projected (£2.0m) premium reduction activity.

This operating profit, taken with the combined impact of investment performance of policyholder funds, foreign exchange rate movements and other economic factors over the nine months, results in cumulative total EEV profit for the period of £38.5m. 

Following the payment of an increased interim dividend of 5.5p per share on 31 March 2010, EEV at that date was £257.7m. This is an increase of £21.1m or 8.9% since 30 June 2009.

·; Capitalisation and Solvency

The Group continues to be strongly capitalised enabling it to satisfy operational, regulatory and shareholder expectations. At 31 March 2010 the aggregate minimum regulatory margin remains covered approximately 15 times by the Group's capital resources.

The Group's solvency position is well insulated against the current challenging capital market conditions. The Group's liquid assets are held with a wide range of deposit institutions and in highly-rated money market liquidity funds.

New Business Flows - Four months ended 30 April 2010

The continuing level of interest in Hansard's products among intermediaries and their clients has resulted in an increased flow of new business over the last four months. New business flows of £61.3m PVNBP in those four months are 34.1% above the flows of the corresponding period.

New business flows in Q3 2009/10 of £43.5m PVNBP are 6% above the flows of Q2 2009/10, supporting the cautious optimism expressed in January 2010, and 31% up on Q3 2008/9.

New business for the ten month period ended 30 April of £134.9m PVNBP is marginally below the level of the corresponding period of the previous financial year. By comparison, atthe end of H1 2009/10 the shortfall versus the comparable period was 21%. This comparison continues to improve with current levels of new business. We are optimistic that new business for the full financial year ending 30 June 2010 will at least equal the levels of the previous financial year.

New business flows are summarised as follows (comparisons on an actual currency basis):

New business flows on the PVNBP basis are analysed as follows:

Hansard receives business from a strong and well-diversified range of intermediaries around the world, which results in new business being received in a number of currencies. The principal currency receipts (as a percentage of PVNBP) in the ten months to 30 April are set out below.

·; New Business Margins

New business margins on the PVNBP basis for the nine month period were 6.9%. These margins are well above the industry average, principally due to the Group's continued focus on the value of new business and tight cost control. Increased regular premium flows, which earn higher margins than single premium business, have contributed to the growth in the margin since Q1 2009/10.

DISTRIBUTION AND ACCOUNT EXECUTIVE RECRUITMENT

We continue to develop further intermediary relationships with a view to building our distribution platform and expanding the range of investment opportunities for Policyholders. Hansard OnLine continues to be developed to meet the needs of intermediaries and Policyholders. Functionality to support online new business processing is being developed and piloted with selected intermediaries.

Recruitment of Account Executives continues, in line with the Group's policy of expanding its reach amongst suitable intermediaries by providing local language and other support to intermediaries in the Group's target markets. At 30 April 2010 the Group has a total of 19 Account Executives (2009: 18).

Assets under Administration

Despite the volatility in capital markets and exchange rates, positive policyholder cash flows have been experienced in the period since December 2009. The value of Assets under Administration ("AUA") as at 31 March 2010, at £1.23bn, has risen by 22.9% since 30 June 2009 (£1.002bn), as shown below.

The MSCI World index has risen by 23.7% over the nine month period. The difference in growth over the period reflects the cautious investment attitudes and fund selection of our policyholders.

There have been no significant changes since 31 December 2009 in the volumes of illiquid assets or impaired fund structures held in AUA, nor in the currency composition of AUA.

Results for the FINANCIAL year

New business figures for the year ending 30 June 2010 are expected to be announced on 28 July 2010. Trading results for the year are expected to be announced on 23 September 2010.

Outlook

While conditions remain challenging and uncertain, we remain optimistic as recent new business flows continue to exceed those of the corresponding period.

With continuing investment in its distribution infrastructure, systems and online platform, Hansard is confident that its business model and prospects remain strong. This confidence has allowed the Group to restore, with effect from 1 July 2010, the salary reductions and pension contribution holidays that have been borne by the Group's employees since March 2009.

The Group's strong balance sheet means that Hansard has the ability to continue to withstand volatile market conditions and is well positioned for growth in volume and profitability when the environment improves. Despite short-term reductions in IFRS profit, the Board expects to be able to declare a full year dividend in line with market expectations.

Notes to editors:

·; Hansard Global plc is the holding company of the Hansard Group of companies. The Company was listed on the London Stock Exchange on 18 December 2006. The Group is a specialist long-term savings provider, based in the Isle of Man.

·; The Group offers a range of flexible and tax-efficient investment products within a life assurance policy wrapper, designed to appeal to affluent, international investors.

·; The Group utilises a low-cost distribution model by selling policies exclusively through a network of financial services intermediaries, independent financial advisers and the retail operations of certain financial institutions (collectively "Intermediaries"), who provide access to their clients in more than 170 countries. The Group's distribution model is supported by Hansard OnLine, an award-winning, multi-language internet platform, and is scaleable.

·; The principal geographic markets in which the Group currently services Intermediaries and policyholders are the Far East, the Middle East, and Latin America in the case of Hansard International Limited, and Western Europe in the case of Hansard Europe Limited, the Group's two life assurance companies.

·; The Group's objective is to grow its business by attracting new business and positioning itself to adapt rapidly to market trends and conditions. The scaleability and flexibility of the Group's operations allow it to enter or develop new geographic markets and exploit growth opportunities within existing markets without the need for significant further investment.

Forward-looking statements:

This announcement may contain certain forward-looking statements with respect to certain of Hansard Global plc's plans and its current goals and expectations relating to future financial condition, performance and results. By their nature forward-looking statements involve risk and uncertainties because they relate to future events and circumstances which are beyond Hansard Global plc's control. As a result, Hansard Global plc's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in Hansard Global plc's forward-looking statements. Hansard Global plc does not undertake to update forward-looking statements contained in this announcement or any other forward-looking statement it may make. No statement in this announcement is intended to be a profit forecast or be relied upon as a guide for future performance.