Hansard Regulatory News (HSD)

10 May 2011

Hansard Global plc

("Hansard" or the "Group")

Interim Management Statement

Hansard Global plc, the specialist long-term savings provider, issues its second interim management statement in the financial year ending 30 June 2011, covering the nine month period ended 31 March 2011, except where indicated.

Summary

·; New business momentum continues at industry leading margins:

- Present Value of New Business Premiums ("PVNBP") up 37.4% to £162.1m for the nine months (2010: £118.0m);

- New business margins of 8.0% on PVNBP basis for the nine months (2010: 6.9%);

- Benefits of globally diversified business with strong performance in growth markets of Far East and Latin America;

·; Regular premium PVNBP of £33.2m for the three months ended 31 March 2011 is almost double the level of the corresponding quarter;

·; IFRS profit after tax for the nine months to 31 March 2011 of £12.9m (2010: £13.5m);

- Some impact from increased expenditure on new business initiatives and ongoing regulatory compliance, as previously stated;

·; EEV operating profit after tax for the nine months of £13.9m (2010: £10.0m);

·; Assets under Administration of £1.3 billion at 31 March 2011, up 11.7% since 30 June 2010 and stable since 31 December 2010;

·; Increased interim dividend of 5.75p per share paid on 31 March 2011 (2010: 5.5p).

Leonard Polonsky, Chairman of Hansard Global plc, commented:

"The performance of the Group in the first nine months of the financial year was good despite recent extraordinary events and the uncertain macro-economic outlook. New business momentum has continued and we have achieved increasing regular premium new business flows from the growth markets of Latin America and the Far East.

While we are cautious as to the short term effects arising from the problems in Japan and the Middle East, the outlook for sustained growth in new business and profitability in the longer term remains positive for the Group. "

For further information:

Hansard Global plc +44 (0) 1624 688000

Leonard Polonsky, Chairman

Gordon Marr, Managing Director

Vince Watkins, Chief Financial Officer

Pelham Bell Pottinger +44 (0) 20 7861 3232

Daniel de Belder

Duncan Mayall

HANSARD GLOBAL plc

INTERIM MANAGEMENT STATEMENT

OVERVIEW

Despite challenging economic conditions and the natural disasters in Japan that have occurred in the last few months, the Group has continued to source strong levels of new business flows. On the basis of Present Value of New Business Premiums ("PVNBP"), new business flows of £162.1m in the nine months to 31 March 2011 are 37% above the corresponding period, reflecting continuing levels of interest in Hansard's products among independent financial advisors and their clients.

The Group's focus on growth markets has been rewarded by increasing levels of Regular premium business. Regular premium flows in the quarter ended 31 March 2011 (Q3 2011), at £33.2m PVNBP, are almost double the flows of Q3 2010.

New business margins for the nine month period are approximately 8.0% on the PVNBP basis and have increased from 7.4% reported at H1 2011, largely as a result of increased volumes of regular premium new business. The current new business margin is industry-leading and is now at a similar level to the margin at the time of the IPO.

IFRS profit after tax for the nine month period, underpinned by positive cash flows from existing policies, was £12.9m (2010: £13.5m) including approximately £2.8m (2010: £2.1m) of investment income and foreign exchange gains.

EEV operating profit after tax in the period, underpinned by strong new business margins from the increased levels of regular premium flows, was £13.9m (2010: £10.0m). EEV profit for the nine month period ended 31 March 2011 is £26.4m, slightly lower than for the period ended 31 December 2010 and was constrained by increased expenses and investment variances.

As reported previously, the Group has been subject to a number of policyholder complaints in relation to the selection and performance of assets linked to policies. A Group company has recently been served with a number of writs arising from these complaints. Based on the pleadings and advice received to date, the Group has not made any provision in respect of these actions, which it intends to defend strenuously.

New Business Flows

The continuing level of interest in Hansard's products among independent financial advisors and their clients has resulted in significant levels of new business in the last quarter. Regular premium new business flows of £33.2m PVNBP in Q3 2011 are 7.4% above the flows of Q2 2011, despite the increased volatility in financial markets caused by, inter alia, natural disasters in Japan and despite the expected effects of national festivities in other target markets, such as China and Brazil. Regular premium flows in Q3 2011 are almost double the flows of Q3 2010.

Regular premium new business of £81.1m in the nine months to 31 March 2011 is 65.8% above the flows of the corresponding period (2010: £48.9m).

Single premium flows of £81.0m for the nine months are 17.2% above the corresponding period. As a result of an unusually strong comparative driven by a small number of high value single premium cases, single premiums in Q3 2011 of £14.4m are approximately half of those in Q3 2010.

Increasing levels of new business from growth markets is reflected in the increased proportion of regular premium flows and, therefore, in the increased new business margin. New business margins on the PVNBP basis for the nine month period were approximately 8.0% (H1 2011: 7.4%, Q3 2010: 6.9%). These margins are well above the industry average, principally due to the Group's continued focus on the value of new business.

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 who have continued to use the facilities offered by Hansard OnLine. In particular, significant levels of new business applications are received using OnLine New Business functionality.

The geographical spread of the financial advisors results in new business being received in a number of currencies. The principal currency denominations (as a percentage of PVNBP) in the nine months to 31 March are set out below. The growth in regular premium new business flows from target markets outside of the EU is reflected in the increasing proportions of new policies denominated in US Dollars and Japanese Yen, and reflects increasing diversification of Hansard's business and Assets under Administration.

FINANCIAL PERFORMANCE AND POSITION - NINE MONTHS TO 31 MARCH 2011

·; International Financial Reporting Standards ("IFRS")

IFRS profit after tax for the period was £12.9m (2010: £13.5m) including approximately £2.8m (2010: £2.1m) of investment income and foreign exchange gains. This reflects an increase of £4.5m over the profit after tax for the six months ended 31 December 2010.

IFRS profit for the period was underpinned by positive cash flows from existing policies. Fees and Commission income continues to increase over the level of the corresponding period, aided by growth in Assets under Administration. Volatility in foreign exchange markets has contributed to unrealised gains on translation of net operating assets held in foreign currencies, particularly Euro. Any significant strengthening of Sterling against Euro over the remainder of this financial year will cause a reversal of these gains.

Included in IFRS profit are expenses totalling £0.8m (2010: £0.4m) relating to the projects previously reported to improve the functionality of Hansard Online, implement new business initiatives and streamline administrative processes. We anticipate that expenditure totalling approximately £1.0m will be incurred in the current financial year on these projects (2010: £0.7m) and approximately £0.5m in the following financial year. While this increasedinvestment in distribution and other infrastructure has underpinned the Group's focus on increasing regular premium flows from the growth markets of Latin America and the Far East, together with additional administrative, governance and risk management costs over the corresponding period, it has contributed to a reduction in IFRS profit, when compared with the corresponding period.

·; 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. EEV operating profit after tax in the three month period to 31 March 2011, underpinned by strong new business margins from the increased levels of regular premium flows, continued to increase, although at a rate marginally lower than that experienced in the first half of the financial year. In an environment of increasing expenses, as referred to above, the EEV operating profit is expected to be further constrained. EEV operating profit after tax in the nine months ended 31 March 2011 was £13.9m, an increase of 39% over the corresponding period (2010: £10.0m).

The effect of falls in capital market levels towards the end of the quarter to 31 March 2011, coupled with increases in the risk-free rate to 3.1% (from 2.7% at 31 December 2010) have caused EEV profit to be £26.4m. This is marginally lower than the EEV profit for the six months ended 31 December 2010.

Following the increased dividend of 5.75p per share paid on 31 March 2011, EEV at that date was £255m or 186p per share (Q3 2010: £257m).

·; Capitalisation and Solvency

The Group continues to be strongly capitalised enabling it to satisfy operational, regulatory and shareholder expectations. At 31 March 2011 the aggregate minimum regulatory margin remains covered approximately 12.7 times by the Group's capital resources.

The Group's solvency position is well insulated against uncertain 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.

Assets under Administration

The value of Assets under Administration ("AUA") at 31 March 2011 is £1.3bn, an increase of 11.7% since 30 June 2010. Volatility in capital markets and exchange rates, together with withdrawals from single premium contracts, have led to a slight decline in the value of AUA in Q3.

There have been no significant changes since 31 December 2010 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 results for the year ending 30 June 2011 are expected to be announced on 27 July 2011. Trading results for the year are expected to be announced on 22 September 2011.

Outlook

While global economic conditions remain challenging and uncertain, investor confidence in the Group's target markets of Latin America and the Far East is strong and Hansard remains optimistic for continued growth in regular premium new business. With continuing investment in its distribution infrastructure, systems and online platform, Hansard is confident that its prospects remain positive.

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 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 financial advisors and policyholders are the Far East, Latin America and the Middle East, in the case of Hansard International Limited, and Western Europe in the case of Hansard Europe Limited.

·; 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.