Last checked at 12 May 2016 07:00
12 May 2016
Hansard Global plc
Interim Management Statement
Hansard Global plc ("Hansard" or "the Group"), the specialist long-term savings provider, issues its Interim Management Statement for the period from 1 July 2015 to date. All figures refer to the period ended 31 March 2016 ("Q3 2016"), except where indicated.
Summary
· We have continued to deliver significantly increased new business levels compared to the prior financial year.
· Q3 2016 new business was £30.4m PVNBP ("Present Value of New Business Premiums"), which is approximately 167% higher than the equivalent prior year quarter. Year-to-date new business to 31 March 2016 was £86.8m, approximately 113% higher than the prior year period.
· Despite Q3 historically experiencing a seasonal dip in the early part of the calendar year, Q3 2016 has maintained the solid growth momentum displayed in the past 4 quarters, with the £30.4m PVNBP sold having increased from the underlying PVNBP of £28.5m in Q2 2016 (excluding the related party single premium reported in Q2 2016).
· The Group's product and distribution strategy continues to gain broader traction in multiple territories, with the Rest of the World region showing particularly strong growth in Q3 2016.
· The Group traded profitably during the period and generated net positive cash flows before dividends.
Gordon Marr, Group Chief Executive Officer, commented:
"We continue to work hard to implement our strategy and generate increased levels of sustainable new business. We are focussing on replicating the current successes experienced in a number of territories more widely and we continue to invest for the future in targeted locations where we believe new licenses can deliver significant opportunity."
For further information:
Hansard Global plc Gordon Marr, Group Chief Executive Officer Tim Davies, Chief Financial Officer
| +44 (0) 1624 688000 |
Bell Pottinger Daniel de Belder
| +44 (0) 20 3772 2561 |
Hansard Global plc
interim management statement
OVERVIEW
The Group continues to focus on the distribution of regular and single premium products in a range of jurisdictions around the world.
In Present Value of New Business Premiums ("PVNBP") terms, levels of new business in Q3 2016 were 167% ahead of the equivalent prior year period (Q3 2015) and 7% ahead of the previous quarter (Q2 2016), excluding the related party single premium reported in Q2 2016.
We are seeing the initial success of the Middle East and Africa region being replicated in the Rest of World region with new business in the Caribbean and Europe (non-EU) doing well both with regular contribution and lump sum business. Lump sum pension-related business in particular has shown strong growth.
We expect that the on-going roll-out of our products and new distribution teams will continue to deliver increasing levels of new business.
New Business Flows
New business flows for Hansard International for Q3 2016 on a range of metrics are summarised as follows.
Three months ended | Nine months ended | ||||||
31 March | 31 March | ||||||
2016 | 2015 | % | 2016 | 2015 | % | ||
Basis | £m | £m | change | £m | £m | change | |
Compensation Credit | 2.5 | 1.1 | 127.3 % | 7.0 * | 3.8 | 84.2 % | |
Present Value of New Business Premiums | 30.4 | 11.4 | 166.7 % | 86.8 * | 40.8 | 112.7 % | |
Annualised Premium Equivalent | 4.5 | 1.9 | 136.8 % | 12.9 * | 6.6 | 95.5 % | |
* Included within these figures is a previously disclosed related party transaction from Q2 2016 of £8.3m. The transaction resulted in an additional £0.1m Compensation Credit, £8.3m PVNBP and £0.8m Annualised Premium Equivalent being included in the nine-month figures above. Excluding this transaction, the equivalent numbers are as follows:
Nine months ended | |||||||
31 March | |||||||
2016 | 2015 | % | |||||
Basis | £m | £m | change | ||||
Compensation Credit | 6.9 | 3.8 | 81.6 % | ||||
Present Value of New Business Premiums | 78.5 | 40.8 | 92.4 % | ||||
Annualised Premium Equivalent | 12.1 | 6.6 | 83.3 % | ||||
· Present Value of New Business Premiums ("PVNBP")
New business flows for Hansard International for Q3 2016 on the basis of PVNBP are summarised as follows:
Three months ended | Nine months ended | ||||||
31 March | 31 March | ||||||
2016 | 2015 | % | 2016 | 2015 | % | ||
PVNBP by product type | £m | £m | change | £m | £m | change | |
Regular premium | 15.2 | 7.1 | 114.1 % | 45.2 | 24.7 | 83.0 % | |
Single premium | 15.2 | 4.3 | 253.5 % | 41.6* | 16.1 | 158.4 % | |
Total | 30.4 | 11.4 | 166.7 % | 86.8* | 40.8 | 112.7 % | |
2016 | 2015 | % | 2016 | 2015 | % | ||
PVNBP by geographical area | £m | £m | change | £m | £m | change | |
Rest of World | 15.7 | 2.2 | 613.6 % | 37.9* | 9.4 | 303.2 % | |
Middle East and Africa | 6.5 | 1.4 | 364.3 % | 21.4 | 5.4 | 296.3 % | |
Far East | 5.1 | 3.1 | 64.5 % | 17.9 | 10.2 | 75.5 % | |
Latin America | 3.1 | 4.7 | (34.0) % | 9.6 | 15.8 | (39.2) % | |
Total | 30.4 | 11.4 | 166.7 % | 86.8* | 40.8 | 112.7 % |
* See note above.
Assets under Administration ("AUA")
The value of AuA is based upon the assets selected by or on behalf of contract holders to meet their needs from time to time. Reflecting the wide geographical spread of the Group's contract holders, the majority of premium contributions and of AuA are designated in currencies other than sterling.
The value of AuA is underpinned by a steady flow of regular contributions from new and existing contract holders around the world. Net withdrawals are typically experienced in Hansard Europe, which closed to new business in 2013.
In aggregate, growth in stock markets and foreign exchange movements resulted in an increase in AuA of £20.4m in Q3 to £876.4m as at 31 March 2016.
Three months ended | Nine months ended | ||||
31 March | 31 March | ||||
2016 | 2015 | 2016 | 2015 | ||
£m | £m | £m | £m | ||
Deposits to investment contracts - regular premiums | 18.0 | 19.5 | 53.5 | 58.8 | |
Deposits to investment contracts - single premiums | 14.6 | 4.3 | 40.0 | 16.1 | |
Withdrawals from contracts and charges | (34.2) | (38.4) | (130.4) | (142.6) | |
Effect of market and currency movements | 22.0 | 26.7 | 6.4 | 59.9 | |
Increase / (decrease) in period | 20.4 | 12.1 | (30.5) | (7.8) | |
Opening balance | 856.2 | 923.7 | 907.1 | 943.6 | |
Assets under Administration at 31 March | 876.6 | 935.8 | 876.6 | 935.8 | |
The movement in AuA is split as follows between Hansard International and Hansard Europe:
Three months ended | Nine months ended | ||||
31 March | 31 March | ||||
2016 | 2015 | 2016 | 2015 | ||
£m | £m | £m | £m | ||
Hansard International | 18.0 | 33.1 | 0.2 | 29.4 | |
Hansard Europe | 2.4 | (21.0) | (30.7) | (37.2) | |
Increase / (decrease) in period | 20.4 | 12.1 | (30.5) | (7.8) | |
FINANCIAL PERFORMANCE AND POSITION - NINE MONTHS TO 31 MARCH 2016
· International Financial Reporting Standards ("IFRS")
The Group has traded profitably during the period and generated positive net cash flows before dividends.
· European Embedded Value ("EEV")
EEV at 31 March 2016 is marginally above the value at 31 December 2015 driven by improved investment performance during Q3 2016.
· Capitalisation and Solvency
The Group continues to be strongly capitalised enabling it to satisfy operational, regulatory, contract holder and intermediary expectations. At 31 March 2016 the aggregate minimum regulatory margins are covered approximately 12 times by the Group's capital resources.
· Interim Dividend
An increased interim dividend of 3.6p per share (2015: 3.5p) was paid on 2 April 2016.
Results for the year ENDing 30 june 2016
New business results for the year are scheduled to be announced on 28 July 2016. Trading results for the year are expected to be announced on 22 September 2016.
Outlook
We believe that the positive outcomes of our strategy implementation across the remainder of the regions in which we operate will deliver increasing and well-diversified new business flows over future periods.
We also continue to work on opportunities for new onshore channels in targeted locations. As expected, these progress slowly due to dependencies on regulatory engagement and technical complexity, but remain an important part of our plans for the coming financial year.
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 in 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 contract wrapper, designed to appeal to affluent, international investors.
· The Group utilises a controlled cost distribution model by selling policies exclusively through a network of independent financial advisors, and the retail operations of certain financial institutions who provide access to their clients in more than 170 countries. The Group's distribution model is supported by Hansard OnLine, a multi-language internet platform, and is scaleable.
· The principal geographic markets in which the Group currently services contract holders and financial advisors 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 Designated Activity Company, the Group's two life assurance companies. Hansard Europe Designated Activity Company ceased accepting new business with effect from 30 June 2013.
· The Group's objective is to grow 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.
· Following the closure of Hansard Europe Designated Activity Company to new business with effect from 30 June 2013, the Group continues to report new business performance of Hansard International Limited alone within this document. Reporting of Assets under Administration incorporates cash flows relating to insurance contracts issued by both Hansard International Limited and Hansard Europe Designated Activity Company.
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.