Hansard Regulatory News (HSD)

29 Mar 2007 07:03

Hansard Global plc29 March 2007 Hansard Global PLC ("Hansard Global" or the "Company") Interim results for the six months ended 31 December 2006 Hansard Global plc, the specialist long-term savings provider, today announcesits results for the six months ended 31 December 2006. Financial highlights • Profit after tax was £10.6 million, an increase of 28% (H1 05/06: £8.3 million) • EEV of the Group has risen to £193.2 million, up 8% compared to the value at 30 June 2006 • New business premiums on an APE basis were £17.3 million, up 9% (H1 05/06: £15.9 million) • Assets under administration at 31 December, at £1,035 million, up 9% compared with 30 June 2006 • The Board is recommending an interim dividend of 4 pence per share • Successful IPO in December 2006 Operational highlights • Stable New Business Margins of 8.0% • Excellent ongoing operational platform • New business initiatives providing growth • Enhanced ability to attract and compete for new business from a wider range of Intermediaries • Four new non-executive directors added to the Board • Hansard Online continues to differentiate Dr Leonard Polonsky, Hansard Global's Chairman, commented: "I am pleased to report that the strong performance in profitability and newbusiness achieved over the last two years has continued in the first half of thefinancial year and that new business margins have been maintained. "Hansard Global's objective remains to grow by attracting new business andpositioning itself to adapt rapidly to market trends and conditions. Thescaleability and flexibility of the Group's operations allow Hansard Global toenter or develop new geographic markets and exploit growth opportunities withinour existing markets, without the need for significant further investment. "The Board is confident that the Group operates in a growing marketplace. Thelong-term trends in all our chosen markets will allow Intermediaries, with whomHansard works, to capitalise on these opportunities." < ends > For further information, please contact Hansard Global Plc Dr Leonard Polonsky, Executive ChairmanTel: 01624 688 000Bell Pottinger Corporate and FinancialDan de Belder/ Mike DaviesTel: 020 7861 3232 Hansard Global plc Half-yearly report For the six months ended 31 December 2006 HANSARD GLOBAL plc HALF-YEARLY REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2006 Contents 1. Summary of results and highlights 2. Chairman's statement 3. Financial commentary on the results for the six months ended 31 December 2006 4. Half-yearly financial statements 5. Independent review report on the half-yearly financial statements 6. European Embedded Value Information 7. Notes to European Embedded Value Information 8. Reviewing actuaries' report on the European Embedded Value Information 9. Contacts, advisors and Financial calendar HANSARD GLOBAL PLC SUMMARY OF RESULTS AND HIGHLIGHTS Half-year ended Half-year ended % 31 December 2006 31 December 2005 change UK GAAP highlights Profit after tax (£millions) 10.6 8.3 27.7%Earnings pershare (pence) 7.7 6.0 28.3%Dividend pershare (pence) 4.0 N/a N/a At 31 December At 31 December % 2006 (£m) 2005 (£m) change European Embedded Valuehighlights EEV 193.2 162.8 18.7% Half-year ended Half-year ended % 31 December 2006 31 December 2005 change (£m) (£m) New Business Contribution 10.3 9.8 5.1% Other highlights Annualised PremiumEquivalent 17.3 15.9 8.8% At 31 December At 31 December % 2006 (£m) 2005 (£m) change Assets under Administration 1,034.6 886.3 16.7% CHAIRMAN'S STATEMENT This is Hansard Global's first interim results announcement as a listed Company.It covers the six months to 31 December 2006 and incorporates five and a halfmonths as a privately held Company and half a month as a public Company. I ampleased to report that the strong performance in profits and new businessachieved over the last two years has continued in the first half of thefinancial year ending on 30 June 2007. We have started to see some early benefits of the IPO, primarily in terms ofproviding the Group with access to a wider range of intermediaries. The listing of the Company, coupled with continued growth in new business andprofits, could not have been achieved without the on-going commitment anddedication of our employees. The progress that we have made is a reflection oftheir skill and enthusiasm. On behalf of the Board and shareholders I thank themall. FINANCIAL PERFORMANCE The financial results have been presented in accordance with UK GAAP.Additionally certain information relating to embedded value is presented, usingthe European Embedded Value ("EEV") methodology. The Board believes that the EEVinformation, read in conjunction with the other financial information producedby the Group, provides a helpful insight into the financial performance of theGroup, year on year. The Group has delivered strong performance in all the measures discussed withinthis report, as can be seen on the summarised table of results. The profit after tax for the period was £10.6 million, an increase of 27.7% overthe profit of £8.3m earned in the corresponding period of the previous financialyear. Earnings per share are 7.7p, an increase of 28.3% over the earnings pershare of the corresponding period. All the costs of listing Hansard Global were met by the holding Company, PolarCap Limited ("Polar Cap"). The Company recovered £1.47m from Polar Cap forservices rendered in connection with the listing. This amount is included in theprofit for the current period referred to above. The EEV of the Group has risen to £193.2m, an increase of 8.2% from the value at30 June 2006. This represents an after-tax EEV operating profit of £14.6m. DIVIDEND The strong performance in the first six months of this financial year isencouraging and in line with management's expectations. The Board has thereforeresolved to pay an interim dividend of 4 pence per share. This is the firstdividend to be paid by the Company and will be paid on 4 May 2007 to thoseshareholders on the Register at the close of business on 10 April 2007. NEW BUSINESS I am pleased to report continued growth in new business during the six months to31 December 2006. New business premiums on an Annualised Premium Equivalent("APE") basis in sterling terms were £17.3 million during the period, comparedwith £15.9m in the corresponding period of the previous financial year, anincrease of 8.8%. This reflects continued strong new business flows,particularly in Scandinavia, Latin America and the Far East, that offset someweakness that was experienced in European markets during the latter part of theperiod. Throughout the period under review new business has been written by the Group onprofitable terms and at consistent new business margins. These factors havecontributed to significant growth in the Group's EEV. Variations in the timing of large single premium cases mean that contributionsfrom new business in any period can be impacted by the relative weight of singlepremium new business, compared with regular premium flows. ASSETS UNDER ADMINISTRATION Assets under administration at 31 December 2006, at £1,034.6 million, have risenby 9.2% since 30 June 2006 and by 16.7% compared with 31 December 2005. The maindrivers for these increases have been new business single premium flows andmovements in capital markets. BOARD CHANGES During the period under review, there were a number of changes in thecomposition of the Board. In preparation for the IPO, Joe Kanarek and VinceWatkins stepped down from the Board in November 2006 and four non-executivedirectors joined the Board prior to the IPO to allow the Company to comply withgood corporate governance practice. I would like to reiterate my welcome toBernard Asher, Maurice Dyson, Uwe Eymer and Harvey Krueger. There have been no changes to the composition of the Management Board. SIGNIFICANT SHAREHOLDINGS At the date of this report I have the largest beneficial shareholding in theCompany, as a result of my holdings in Polar Cap. Polar Cap is currently theregistered holder of 57.6% of the Company's issued share capital. Polar Capintends to complete the reorganisation referred to in our prospectus by 31December 2007. As a result of that reorganisation, I will hold a direct interestof 43% in the Company and there may be other shareholders with notifiableinterests in the Company at that date. The reorganisation will not affect thenumber of the Company's shares in issue. Lloyds TSB Group Plc have advised us that they have an interest in 4,191,580shares or 3.05% of the Company's share capital at the date of this report. OUTLOOK The Group's objective is to grow by attracting new business and positioningitself to adapt rapidly to market trends and conditions. The scalability andflexibility of the Group's operations allow us to enter or develop newgeographic markets and exploit growth opportunities within our existing markets,without the need for significant further investment. The Board is confident that the Group operates in a growing marketplace. Thelong-term trends in all our chosen markets will allow intermediaries with whomwe work to capitalise on these opportunities. Dr L S Polonsky Chairman 28 March 2007 FINANCIAL COMMENTARY Introduction The Group offers long-term savings products packaged as single and regularpremium unit-linked life assurance policies, providing exposure to theperformance of a wide range of underlying investments. Whilst the Group's products are packaged as life assurance products, they do nottransfer significant life assurance risk and therefore are characterised underUK GAAP in accordance with FRS 26 as investment contracts and are accounted forusing deposit accounting principles. Accordingly, premiums received on suchcontracts are treated as deposits rather than revenue and recognised in thebalance sheet and not in the income statement. Similarly, benefits paid aretreated as repayments of deposits and are not reflected in the income statement. The classification of the Group's products as investment contracts results inthe Group not disclosing premium income as income in the UK GAAP financialinformation; instead, the fees and costs deemed to be associated with theprovision of services to policyholders are recognised in the consolidated incomestatement. In addition to UK GAAP reporting, the Group prepares embedded value informationin accordance with the European Embedded Value (''EEV'') methodology. In theDirectors' opinion, the EEV information, read in conjunction with the otherfinancial information produced by the Group, provides a helpful insight into thefinancial performance of the Group year on year. Commentary on the Group'sbusiness during the periods under review, reported on the EEV basis, is set outlater in this section. I am pleased to report that the Group has delivered strong performance in allthe measures discussed within this report, as can be seen on the summarisedtable of results. 1. Results for the six month period ended 31 December 2006 The profit for the period under UK GAAP is £10.6 million, compared with a profitfor the corresponding period of the previous financial year of £8.3m. Thisrepresents an increase of 27.7%. Earnings per share are 7.7p, an increase of28.3% over the earnings per share of the corresponding period. All the costs of listing the Company were met by the holding Company, Polar CapLimited. This has had the impact of the Company recovering some £1.47m from itsholding Company for services rendered in connection with the listing. Thisamount is included in the profit for the current period referred to above. Netof the impact of all amounts received from Polar Cap in the periods underreview, the Group's underlying profit for the period reflects growth of 13.9%over the profit of the corresponding period. 1.1 Revenues Fees and commissions for the period are £24.2 million, compared with revenuesfor the corresponding period of the previous financial year of £21.2m. Thisrepresents an increase of 14.2%, caused principally by the timing of newbusiness flows in the current period and the impact of fees received frominvestment contracts that were being administered by the Group at the beginningof the period. The geographical analysis of fees and commissions reflects the growth in revenueattributable to new business issued in the Republic of Ireland over the period.This is principally single premium business that has contributed to a growth inassets under administration by Hansard Europe Limited of more than 50% since 31December 2005. 1.2 Expenses New business commissions, together with the directly attributable incrementalcosts incurred on the issue of a policy by the Group, are included withinOrigination costs in the consolidated income statement in the relevant periodand are deferred as an explicit deferred origination cost asset in theconsolidated balance sheet. All other costs are reflected within Administrationand other expenses. Investment management expenses and administration costs payable by the Group aremet from charges deducted from the relevant investment contracts administered. A summary of Administrative and other expenses in each of the reporting periodsis set out below: Half-year ended Half-year ended Year ended 31 December 2006 31 December 2005 30 June 2006 £m £m £mInvestmentmanagement andother fees 1.6 1.4 2.6New businessrelated costs 1.1 0.9 2.8Administrativeexpenses 6.0 5.7 10.9 £8.7m £8.0m £16.3m 1.3 Assets Under Administration Assets under administration at 31 December 2006, at £1,034.6 million, have risenby 9.2% since 30 June 2006 and by 16.7% compared with 31 December 2005. The maindrivers for these increases have been new business single premium flows andmovements in capital markets. A significant proportion of new business premiumsis denominated in currencies other than sterling (principally in US$ and •) and,as a result, the value of assets under administration is sensitive to movementsin exchange rates. Using the exchange rates in force at 31 December 2005, thevalue of assets would have been increased by a further £50m at 31 December 2006. 1.4 Cash Flows Cash flows in the period were strongly positive, allowing the Group to fund itsgrowth in new business from its own resources and providing sufficient funds tomeet the proposed interim dividend. Cash and cash equivalent balances at 31December 2006 stood at £64.4 million, an increase of almost £20m since 31December 2005. 2. EEV Information The methodology used to derive the European Embedded Values at 31 December 2006and 31 December 2005 is consistent with the methodology used in relation to theconsolidated audited financial statements in respect of the year ended 30 June2006, and in relation to the EEV information published in the Company'sprospectus document. 2.1 Analysis of Embedded Value The EEV as at 31 December 2006 was £193.2 million, representing an increase of8.2% or £14.6m over the value at 30 June 2006. Throughout the period underreview new business has been written by the Group on profitable terms and atconsistent New Business Margins. These factors have contributed to the growth inthe Group's EEV. A significant proportion of new business premiums isdenominated in currencies other than sterling (principally in US$ and •) and, asa result, the EEV is sensitive to movements in exchange rates. The fall inforeign exchange rates against sterling over the last six months has reduced EEVby £3.4m at 31 December 2006. Net worth is the market value of shareholders' funds, adjusted to excludecertain assets such as deferred origination costs and liabilities such asdeferred income reserve. At the balance sheet date the net worth of the Group isrepresented by liquid cash balances. The table below provides a summarised breakdown of the EEV at the reportingdates. 31 December 2006 31 December 2005 30 June 2006 £m £m £mNet worth 52.9 35.8 43.3Value of future profits 140.3 127.0 135.3European Embedded Value 193.2 162.8 178.6 2.2 EEV Return The EEV Return after tax provides a measure of the Group's performance over theperiod. It is defined as the change in EEV over a period, adjusted for anyamounts such as dividends or capital movements released from or invested in theGroup. The EEV Return in a particular period comprises the new businesscontribution and return from existing business. The EEV Return remains strongly positive, notwithstanding the impact ofsignificant items impacting on this period and the corresponding period. The EEVReturn for the period is £14.6 million, compared with £20.3m in the half yearended 31 December 2005. This represents a return of 8.2% on opening embeddedvalue generated principally by profitable new business. The New BusinessContribution ("NBC") for the period was £10.3m (£9.8m in the half year ended 31December 2005), and the expected return on existing business was £3.2m (£2.6m). During the period improvements were introduced to the modelling of singlepremium cases with a premium above £1m. This has led to a one-off negativeadjustment of £3.9m that is reflected within the return for the period. 3. New Business 3.1 New Business Volumes New business sales volumes are expressed on two bases: Annualised PremiumEquivalent ("APE") and the Present Value of Future New Business Premiums(''PVNBP''). The calculation of APE is in accordance with the life assuranceindustry convention of adding together new regular premiums and one tenth ofsingle premiums. New business premiums on an APE basis in sterling terms were up 8.8% to £17.3million during the first six months of the year (compared with £15.9m for thecorresponding period). This reflects continued strong new business flows,particularly in Scandinavia, Latin America and the Far East. A significant proportion of new business premiums is denominated in currenciesother than sterling (principally in US$ and •). The continued growth in APEdespite the adverse currency movements throughout the period shows the benefitsof having a well-diversified portfolio of new business. The tables below provide a summarised breakdown of New Business APE for each ofthe periods reported, analysed between single and regular premium cases, andalso by residence of policyholder. Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 £m £m £m--------------------------------------------------------------------------------Annualised regular premiums 8.7 8.3 16.7Single premiums 8.6 7.6 18.5--------------------------------------------------------------------------------Annualised premium equivalent 17.3 15.9 35.2-------------------------------------------------------------------------------- Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 £m £m £m--------------------------------------------------------------------------------EU and EEA 6.9 7.4 11.1Rest of world 10.4 8.5 24.1--------------------------------------------------------------------------------Annualised premium equivalent 17.3 15.9 35.2-------------------------------------------------------------------------------- 3.2 New business profitability and margin New Business Margin is defined as NBC divided by PVNBP. The calculation of PVNBPis equal to total single premium sales in the period plus the discounted valueof regular premiums expected to be received over the term of new regular premiumpolicies, and is calculated at the point of sale. New Business premiums on a PVNBP basis were £129.5m during the first six monthsof the year (compared with £121.8m for the corresponding period of the previousfinancial year), an increase of 6.3%. Throughout the period under review new business has been written by the Group onprofitable terms and has contributed to significant growth in the Group's EEV.The New Business Margin, in sterling terms, has been maintained at 8.0% for theperiod ended 31 December 2006 as compared to the period ended 31 December 2005and the year ended 30 June 2006. The change in the mix of new business comparedwith the corresponding period resulted in increased amounts of regular premiumbusiness which had the impact of increasing NBC by £0.3m. The combined impactsof changes in the level of the Risk Discount Rate and the impact of currencymovements has been to reduce the NBC by £0.2m. 4. Net Asset Value The net asset value per share at 31 December 2006, on a UK GAAP basis, is 34.6p.This represents an increase of 72.7% or 14.6p from the net asset value at 31December 2005. The net asset value per share is based upon the consolidatedshareholders' funds at the balance sheet date divided by the number of shares inissue at that date, being 137,281,202 ordinary shares. On the EEV basis, the net asset value per share at 31 December 2006 is 141p.This represents an increase of 18.1% or 22p from the net asset value at 31December 2005. 5. Financial Reporting It is our intention to deliver, whenever practicable, interim and finalreporting to shareholders through electronic media. This is in line with ourobjectives to maintain an appropriate level of operational expenditure, reducethe impact on the environment of our activities, and facilitate widerdistribution of information. In due course shareholders will be requested toprovide an indication of their preferences in this regard. V P WatkinsChief Financial Officer28 March 2007 Consolidated income statement Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 Notes £m £m £m----------------------------------------------------------------------------------------------- Fees and commissions 2 24.2 21.2 44.5 Investment income 51.1 85.1 102.6 Other income 3 1.8 0.7 0.8----------------------------------------------------------------------------------------------- 77.1 107.0 147.9----------------------------------------------------------------------------------------------- Investment contract benefits (49.9) (84.0) (99.3) Origination costs (7.9) (6.7) (14.6) Administrative and otherexpenses (8.7) (8.0) (16.3)----------------------------------------------------------------------------------------------- (66.5) (98.7) (130.2)----------------------------------------------------------------------------------------------- Profit on ordinary activitiesbefore taxation 10.6 8.3 17.7 Taxation on profit on ordinaryactivities 4 - - ------------------------------------------------------------------------------------------------Profit for theperiod after taxation 10.6 8.3 17.7----------------------------------------------------------------------------------------------- All of the activities of the Group are continuing. The Group has no recognised gains or losses other than those included in theprofits above and therefore no separate statement of total recognised gains andlosses has been prepared. Earnings per share expressed in pence per share Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006--------------------------------------------------------------------------------Basic 5 7.7 6.0 12.9 Diluted 5 7.7 6.0 12.9 Reconciliation of movement in consolidated shareholders' funds Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 Notes £m £m £m--------------------------------------------------------------------------------------- Profit for the period aftertaxation 10.6 8.3 17.7 Opening consolidatedshareholders' funds 36.9 19.2 19.2---------------------------------------------------------------------------------------Closing consolidatedshareholders' funds 47.5 27.5 36.9--------------------------------------------------------------------------------------- Consolidated balance sheet As at As at As at 31 December 31 December 30 June 2006 2005 2006 Notes £m £m £m-------------------------------------------------------------------------------- Assets Tangible assets 0.6 0.6 0.6 Financial investments 6 1,034.6 886.3 947.3 Deferred origination costs 90.1 81.6 86.6 Other receivables 12.0 11.9 11.7 Cash and cashequivalents 64.4 44.5 57.9-------------------------------------------------------------------------------- Total assets 1,201.7 1,024.9 1,104.1-------------------------------------------------------------------------------- Liabilities Financial liabilities underinvestment contracts 7 1,034.4 886.1 947.2 Amounts due to investmentcontract holders 8.7 9.0 10.2 Deferred income reserve 105.7 98.6 103.0 Other payables 5.4 3.7 6.8--------------------------------------------------------------------------------Total liabilities 1,154.2 997.4 1,067.2--------------------------------------------------------------------------------Net assets 47.5 27.5 36.9-------------------------------------------------------------------------------- Shareholders'equity Called up share capital 8 68.6 68.6 68.6 Other reserves 9 (48.5) (48.5) (48.5) Profit and loss account 27.4 7.4 16.8--------------------------------------------------------------------------------Total shareholders' equity 47.5 27.5 36.9-------------------------------------------------------------------------------- Consolidated cash flow statement Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 Notes £m £m £m -------------------------------------------------------------------------------- Net cash inflow from operatingactivities 10 4.7 2.4 14.4 Returns on investments andservicing of financeInterest on investments 1.8 1.1 2.6 Capital expenditurePurchase of tangible assets (0.1) - (0.2) TaxationTaxation paid - - ---------------------------------------------------------------------------------Net cash inflow 6.4 3.5 16.8-------------------------------------------------------------------------------- Cash flows were invested as follows: --------------------------------------------------------------------------------Increase in cash holdings 6.3 3.6 16.9Net portfolio investments 0.1 (0.1) (0.1)-------------------------------------------------------------------------------- 6.4 3.5 16.8-------------------------------------------------------------------------------- In accordance with Financial Reporting Standard No.1 the cash flow statementexcludes cash flows relating to the long-term assurance business of the Group. Notes to the consolidated half-yearly financial statements 1 Basis of preparation The consolidated half-yearly financial statements for the six months ended 31December 2006 comprise the half-yearly financial statements of Hansard Globalplc (the 'Company') and its subsidiaries (together referred to as the 'Group').The consolidated half-yearly financial statements have been prepared inaccordance with the Listing Rules of the UK Financial Services Authority. The accounting policies applied by the Group in the preparation of theseconsolidated half-yearly financial statements are consistent with those appliedby the Group in the preparation of the audited consolidated financial statementsfor the year ended 30 June 2006. The audited consolidated financial statementsfor the year ended 30 June 2006 are available at www.hansard.com. 2 Segmental information In the opinion of the directors, the Group operates in a single businesssegment, that of the distribution and servicing of long-term investment productsthrough the Company's life assurance subsidiaries. i) Fees and commissions analysed by type Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 £m £m £m--------------------------------------------------------------------------------Contract fee income 17.2 15.2 31.5Fund management charges 5.2 4.1 9.1Commission receivable 1.8 1.9 3.9-------------------------------------------------------------------------------- 24.2 21.2 44.5-------------------------------------------------------------------------------- ii) Geographical analysis of fees and commissions by origin Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 £m £m £m--------------------------------------------------------------------------------Isle of Man 20.0 18.3 37.6Republic of Ireland 4.2 2.9 6.9-------------------------------------------------------------------------------- 24.2 21.2 44.5-------------------------------------------------------------------------------- iii) Geographical analysis of profit before taxation Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 £m £m £m--------------------------------------------------------------------------------Isle of Man 10.3 8.6 16.8Republic of Ireland 0.3 (0.3) 0.9-------------------------------------------------------------------------------- 10.6 8.3 17.7-------------------------------------------------------------------------------- Notes to the consolidated half-yearly financial statements (continued) 2 Segmental information (continued) iv) Geographical analysis of financial investments 31 December 31 December 30 June 2006 2005 2006 £m £m £m--------------------------------------------------------------------------------Isle of Man 726.7 682.3 698.8Republic of Ireland 307.9 204.0 248.5-------------------------------------------------------------------------------- 1,034.6 886.3 947.3-------------------------------------------------------------------------------- The geographical analysis of financial liabilities under investment contracts isconsistent with the analysis of financial investments 3 Other operating income Included within other operating income are amounts totalling £1.57 millionreceived from Polar Cap Limited for services rendered by the Group in relationto the listing of the Company on the London Stock Exchange on 18 December 2006and other services. Amounts totalling £0.38m received from Polar Cap Limited forsoftware development services are reflected within other operating income inrespect of both the period ended 31 December 2005 and the year ended 30 June2006. 4 Taxation The Group's profits arising from its Isle of Man-based operations are taxable atzero percent. No corporation tax liabilities have attached to the Ireland-basedoperations due to tax losses incurred in prior periods. Charges for taxationreflected in the income statements of a number of minor subsidiary companies areimmaterial to an understanding of the Group's taxation position for the periodsunder review. 5 Earnings per shareEarnings per share expressed in pence per share Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006--------------------------------------------------------------------------------Basic 7.7 6.0 12.9 Diluted 7.7 6.0 12.9 The earnings per share for each period is based upon the profit for the periodafter taxation divided by the average number of shares in issue throughout thatperiod. The average number of shares in issue throughout each period is137,281,202 ordinary shares. The earnings per share for the year ended 30 June 2006 reflected within theprospectus issued by the Company on 13 December 2006 in relation to the listingof the Company on the London Stock Exchange was 13.3p. The difference betweenthat amount and the amount reflected above relates to different timing ofrecognition of certain expenses in the audited consolidated financialstatements, compared with the treatment in the figures published in theprospectus. Notes to the consolidated half-yearly financial statements (continued) 6 Financial investments 31 December 31 December 30 June 2006 2005 2006 £m £m £m--------------------------------------------------------------------------------Equity securities 106.8 96.3 106.8Investment in collective investmentschemes 820.5 713.6 737.0Fixed income securities 43.0 9.7 28.6Outstanding trades 8.2 12.0 12.8Accrued investment income 0.4 0.4 0.2Cash and cash equivalents 55.7 54.3 61.9-------------------------------------------------------------------------------- 1,034.6 886.3 947.3--------------------------------------------------------------------------------Included above are shareholders' assetsof: .02 .02 0.1-------------------------------------------------------------------------------- 7 Financial liabilities under investment contracts 31 December 31 December 30 June 2006 2005 2006 £m £m £m--------------------------------------------------------------------------------At 1 July 947.2 771.2 771.2Deposits to investment contracts 96.0 87.6 196.1Benefits paid (58.7) (56.7) (119.4)Investment contract benefits 49.9 84.0 99.3--------------------------------------------------------------------------------At the balance sheet date 1,034.4 886.1 947.2-------------------------------------------------------------------------------- The value of these financial liabilities is determined by the fair value of thelinked assets at the balance sheet date. 8 Share capital 31 December 31 December 30 June 2006 2005 2006 £m £m £m--------------------------------------------------------------------------------Authorised:200,000,000 ordinary shares of 50p 100 100 100-------------------------------------------------------------------------------- Issued and fully paid:137,281,202 ordinary shares of 50p 68.6 68.6 68.6-------------------------------------------------------------------------------- On 1 July 2005 the Company issued 68,640,600 shares of £1 each at par inconsideration for the acquisition of the subsidiary companies referred to innote 9 below. The authorised and issued share capital was sub-divided intoordinary shares of 50p each by resolution passed on 13 September 2006. Notes to the consolidated half-yearly financial statements (continued) 9 Other reserves Other reserves comprise the merger reserve arising on the acquisition by theCompany of its subsidiary companies on 1 July 2005. The merger reserverepresents the difference between the par value of shares issued by the Companyfor the acquisition of the former subsidiaries of Polar Cap Limited, compared tothe par value of the share capital and the share premium of those companies atthe date of acquisition. 10 Notes to the consolidated cash-flow statement (i) Reconciliation of profit before tax to net cash inflow from operatingactivities Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 £m £m £m--------------------------------------------------------------------------------Profit before taxation 10.6 8.3 17.7Depreciation 0.2 0.2 0.4Interest received (1.8) (1.1) (2.6)Foreign exchange differences (0.3) (0.1) (0.2)Increase in debtors (0.3) (4.7) (4.5)Increase in deferred originationcosts (3.5) (4.8) (9.8)Increase in deferred incomereserve 2.7 4.0 8.5(Decrease) /increase in creditors (2.9) 0.6 4.9--------------------------------------------------------------------------------Net cash inflow from operatingactivities 4.7 2.4 14.4-------------------------------------------------------------------------------- (ii) Movement in opening and closing portfolio investments Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 £m £m £m--------------------------------------------------------------------------------Cash at bankAt 1 July 57.9 40.8 40.8Foreign exchange differences 0.3 0.1 0.2Cash flow 6.2 3.6 16.9--------------------------------------------------------------------------------At the balance sheet date 64.4 44.5 57.9-------------------------------------------------------------------------------- Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 £m £m £m---------------------------------------------------------------------------------Shareholder investmentsAt 1 July 0.1 0.2 0.2Purchases 0.1 - 0.1Sales (0.1) (0.1) (0.2)Changes to market values andcurrencies 0.1 - ---------------------------------------------------------------------------------- At the balance sheet date 0.2 0.1 0.1--------------------------------------------------------------------------------- Notes to the consolidated half-yearly financial statements (continued) 11 Ultimate controlling party The ultimate controlling party of the Company is Dr L S Polonsky, a director ofthe Company. 12 Statutory financial statements The financial information contained within this report is unaudited and does notconstitute statutory financial statements. The comparative figures for the yearended 30 June 2006 have been extracted from the Company's audited consolidatedfinancial statements for the financial year then ended. Certain items have beenrestated to provide comparability with current period figures. The consolidated financial statements for the financial year ended 30 June 2006were reported on by the Company's auditors without qualification of opinion. 13 Approval of half-yearly report The half-yearly report was approved by the Board of Directors on 28 March 2007. Independent review report to Hansard Global plc Introduction We have been instructed by the Company to review the financial information forthe six months ended 31 December 2006 which comprises the consolidated balancesheet as at 31 December 2006 and the related consolidated half-yearly incomestatement, cash flow statement and reconciliation of movement in shareholders'funds for the six months then ended and related notes. We have read the otherinformation contained in the half-yearly report and considered whether itcontains any apparent misstatements or material inconsistencies with thefinancial information. This other information comprises the summary results andhighlights, the Chairman's statement, the financial commentary, the EuropeanEmbedded Value information and the notes to the European Embedded Valueinformation. Directors' responsibilities The half-yearly report, including the financial information contained therein,is the responsibility of, and has been approved by, the directors. The ListingRules of the Financial Services Authority require that the accounting policiesand presentation applied to the half-yearly figures should be consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. This half-yearly report has been prepared in accordance with the basis set outin Note 1. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board. A review consists principally of makingenquiries of group management and applying analytical procedures to thefinancial information and underlying financial data and, based thereon,assessing whether the disclosed accounting policies have been applied. A reviewexcludes audit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditand therefore provides a lower level of assurance. Accordingly we do not expressan audit opinion on the financial information. This report, including theconclusion, has been prepared for and only for the Company for the purpose ofthe Listing Rules of the Financial Services Authority and for no other purpose.We do not, in producing this report, accept or assume responsibility for anyother purpose or to any other person to whom this report is shown or into whosehands it may come save where expressly agreed by our prior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 December 2006. PricewaterhouseCoopersDouglasIsle of Man28 March 2007 Notes: (a) The maintenance and integrity of the Hansard Global plc web site is theresponsibility of the directors; the work carried out by the auditors does notinvolve consideration of these matters and, accordingly, the auditors accept noresponsibility for any changes that may have occurred to the half-yearly reportsince it was initially presented on the web site. (b) Legislation in the Isle of Man governing the preparation and disseminationof financial information may differ from legislation in other jurisdictions. EUROPEAN EMBEDDED VALUE ("EEV") Information 1. Group EEV Balance Sheet 31 December 2006 31 December 2005 30 June 2006 £m £m £mFree Surplus 47.8 30.9 38.3Required capital 5.1 4.9 5.0Net worth 52.9 35.8 43.3Value of in-forcebusiness 145.6 132.3 140.6Cost of required capital (0.3) (0.3) (0.3)Reduction for operationalrisk (5.0) (5.0) (5.0)Value of future profits 140.3 127.0 135.3 Embedded Value 193.2 162.8 178.6 The EEV as at 31 December 2006 was £193.2 million, representing an increase of£14.6m or 8.2% over the value at 30 June 2006. Throughout the period underreview new business has been written by the Group on profitable terms and hascontributed to the growth in the Group's EEV. A significant proportion of newbusiness premiums is denominated in currencies other than sterling (principallyUS dollars ("US$") and euros ("•")) and, as a result, the EEV is sensitive tomovements in exchange rates. The aggregate fall in the foreign currency exchangerates against sterling over the last six months has reduced EEV by £3.4m at 31December 2006. 2. New business profitability and margin Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 £m £m £m-------------------------------------------------------------------------------- PVNBP 129.5 121.8 270.2New Business Contribution 10.3 9.8 21.6--------------------------------------------------------------------------------New Business Margin 8.0% 8.0% 8.0%-------------------------------------------------------------------------------- New Business Margin is defined as NBC divided by PVNBP. The calculation of PVNBPis equal to total single premium sales in the period plus the discounted valueof regular premiums expected to be received over the term of new regular premiumpolicies, and is calculated at the point of sale. The NBC during the period is the present value of the expected stream ofshareholder cash flows after tax from new business written in that period. TheGroup's NBC has been calculated using the same economic assumptions as thoseused to determine the EEV as at the start of the financial year and the sameoperating assumptions used to determine the EEV as at the end of the periodunder review (as described in the Notes to the EEV information), and is rolledforward to the end of the financial period. NBC is shown after allowing for thecost of required capital, calculated on the same basis as for in-force business. Throughout the period under review new business has been written by the Group onprofitable terms and at new business margins consistent with prior periods.These factors have contributed to significant growth in the Group's EEV. Theincreased amounts of regular premium business sold during the period had theimpact of increasing NBC by £0.3m but the combined impacts of changes in thelevel of the Risk Discount Rate and the impact of currency movements has been toreduce the NBC by £0.2m. The New Business Margin, in sterling terms, was 8.0%and maintains the level of margins earned for the periods ended 31 December 2005and 30 June 2006. 3. EEV Return The EEV Return after tax provides a measure of the Group's performance over theperiod. It is defined as the change in EEV over a period, adjusted for anyamounts such as dividends or capital movements released from or invested in theGroup. The EEV Return in a particular period comprises the new businesscontribution and Return from existing business. The components of the return forthe period under review are: Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 £m £m £m--------------------------------------------------------------------------------New business contribution 10.3 9.8 21.6Expected return on existing business 3.2 2.6 5.2Experience variances 1.2 1.9 4.0Operating assumption / modelling changes (3.9) 0.0 (0.4)Expected return on net worth 1.0 0.6 1.2Investment return variances 2.3 5.4 5.2Economic assumption changes 0.5 0.0 (0.7)Movement in capital invested 0.0 0.0 0.0EEV Return 14.6 20.3 36.1 The EEV Return for the period is £14.6 million, compared with £20.3m in the halfyear ended 31 December 2005. This represents a return of 8.2% on openingembedded value largely as a result of profitable new business. The expectedreturn on existing business was £3.2m (£2.6m) and represents the time value ofmoney. Experience variances include the amounts received from Polar Cap during theperiod and a number of smaller negative items relating to lapse and persistencyexperience that offset higher than expected fees and commissions. The stronglypositive experience in the corresponding period relates primarily to lighterthan anticipated mortality experience and margins earned from policyholderactivity that were greater than expected in that period. Investment return variances totalled £2.3m (£5.4m) driven largely by better thanexpected returns on policyholders' funds of £4.9m and increases in marketingallowances totalling £1.2m. These gains were offset by a reduction of £3.4mrelating to currency movements on funds denominated in US$ and • as discussedabove. During the period improvements were introduced to the modelling of singlepremium cases with a premium above £1m. This has led to a one-off negativeadjustment to EEV of £3.9m that is reflected under operating assumptions. Shareholders are aware that no dividend has been paid during the period ended on31 December 2006. The rate of growth of embedded value in the remainder of thefinancial year will be impacted by the interim dividend which will be paid on 4May 2007. NOTES TO THE EUROPEAN EMBEDDED VALUE INFORMATION 1. BASIS OF PREPARATION The half-yearly supplementary information shows certain of the Group's resultsfor the six months ended 31 December 2006 as measured on the European EmbeddedValue (EEV) basis. In preparing this EEV information, the Directors considered the EEV Principlespublished by the CFO Forum, a group comprising the Chief Financial Officers ofcertain major listed and unlisted European assurance companies, in May 2004 andextended by additional guidance published in October 2005. The EEV informationhas been prepared using a ''market consistent'' basis in respect of the economicassumptions, in line with the EEV Principles. Under the EEV methodology, profit is recognised as margins are released frompolicy related balances over the lifetime of each policy within the Group'sin-force business. The total profit recognised over the lifetime of a policyunder EEV methodology is the same as under the UK GAAP basis of reporting, butthe timing of recognition is different. The Group's EEV calculations onlyconsider claims by policyholders in the normal course of business under theterms of the policies issued. They also assume the continuation of currentpolicy terms and conditions, and the Group's interpretation thereof. 2. METHODOLOGY AND ASSUMPTIONS The methodology used to derive the European Embedded Values at 31 December 2006and 31 December 2005 is consistent with the methodology used in relation to theconsolidated audited financial statements in respect of the year ended 30 June2006, and in relation to the EEV information published in the Company'sprospectus document. Apart from the assumptions set out below, there have been no changes toassumptions from those used in the documents referred to above. The principal economic assumptions used in the EEV calculations are based onrisk free rates, being the market yields of government backed fixed interestsecurities of comparable term to the policy cash flows at the end of eachreporting period. A proportion of the Group's income and expenditure iscontracted in currencies other than sterling, in particular US$ and •. Inpractice the risk free rate used in the valuation is based on a weighted averageof the yields on fixed interest securities issued within the UK, US and Europe.Any components of the EEV and other balance sheet items denominated in foreigncurrencies have been translated to sterling using the appropriate closingexchange rate. The closing exchange rates used by the Group for the conversion of EEVcomponents and other balance sheet items from US$ and • to sterling were US$1.72and €1.46, respectively at 31 December 2005 and US$1.96 and €1.48, respectively,at 31 December 2006. The risk discount rate used to value future expected shareholder cash flows isassumed to be the risk free rate plus a margin for any risks that are notallowed for elsewhere in the valuation. Since non-market risk is allowed forseparately, the risk margin is nil. All investments are assumed to provide areturn equal to the same risk free rate. Principal economic and tax assumptions The principal economic assumptions used are set out below: Half year ended Year ended 31 December 31 December 30 June 2006 2005 2006 % p.a % p.a % p.a--------------------------------------------------------------------------------Weighted average pre-tax investmentreturn on fixed interest securities 4.4% 4.2% 4.8%Risk discount rate 4.4% 4.2% 4.8%Future expense inflation 5% 5% 5% Current tax legislation and rates have been assumed to continue unaltered,except where changes in future tax rates have been announced. A zero rate ofcorporation tax in the Isle of Man and a 12.5 per cent. rate in Ireland havebeen assumed. 3. SENSITIVITIES Sensitivities provide an indication of the impact of changes in particularassumptions on the EEV at 31 December 2006 and the New Business Contribution forthe period then ended. The impact on both measures of various sensitivities isshown below. The sensitivities shown should not be considered as exhaustive, norshould they be regarded as representing the boundaries of possible outcomes orvariations. The combined effect of two sensitivities may not equal the sum ofthe separate parts. In each sensitivity calculation, all other assumptions remain unchanged exceptwhere they are directly affected by the revised economic conditions. Nomanagement actions or changes in policyholder behaviour are modelled in responseto the changed assumption. Impact on EEV (£m) New business Contribution (£m) As reported at 31 December 2006 193.2 10.31 per cent. increase in risk discount rate (6.7) (0.7)1 per cent. decrease in risk discount rate 7.3 0.81 per cent. increase in interest rates Not material Not material1 per cent. increase in investment return 5.3 0.41 per cent. decrease in investment return (5.0) (0.4)10 per cent. increase in the value of equitiesand property 8.5 Nil10 per cent. decrease in the value of equitiesand property (8.6) Nil10 per cent. increase in sterling exchange rates (11.3) (0.8)10 per cent. decrease in sterling exchange rates 11.2 0.810 per cent. increase in expenses (3.3) (0.3)10 per cent. decrease in expenses 3.2 0.310 per cent. increase in maintenance expenses (2.8) (0.2)10 per cent. decrease in maintenance expenses 2.7 0.210 per cent. increase in lapse rates (3.6) (0.4)10 per cent. decrease in lapse rates 4.0 0.410 per cent. increase in mortality rates (0.8) (0.1)10 per cent. decrease in mortality rates 0.7 0.110 per cent. increase in marketing allowances 2.5 0.110 per cent. decrease in marketing allowances (2.6) (0.1) The sensitivity analysis indicates that the Group's EEV and NBC are relativelyinsensitive to a number of external factors. However, the Group is exposed,through the impact on the level of future fund-based management income, tomovements in equity, property and currency values. Further, it indicates theexposure to movements in the expense base and lapse rates, with the latterhaving a particular effect on the ability of the Group to sustain levels ofpolicy- and fund-based income. The DirectorsHansard Global plcHarbour CourtLord StreetBox 192DOUGLASIsle of Man,IM99 1QL 28 March 2007 Dear Sirs Review of the European Embedded Value ("EEV") of Hansard Global plc for the sixmonths ended 31 December 2006. Our role Deloitte & Touche LLP has been engaged by Hansard Global plc to act as ReviewingActuaries in connection with results on an EEV basis published in Hansard Globalplc's half-yearly results for the six months ended 31 December 2006. Responsibilities The EEV Information (and the methodology and assumptions underlying it) is thesole responsibility of the Directors of Hansard Global plc. It has been preparedby the Directors of Hansard Global plc, and the calculations underlying the EEVStatements have been performed by Hansard Global plc. Our review was conducted in accordance with generally accepted actuarialpractices and processes. It comprised a combination of such reasonablenesschecks, analytical reviews and checks of clerical accuracy as we considerednecessary to provide reasonable assurance that the EEV Information has beencompiled free of material error. The EEV Information necessarily makes numerous assumptions with respect toeconomic conditions, operating conditions, taxes, and other matters, many ofwhich are beyond the Group's control. Although the assumptions used representestimates which the Directors believe are together reasonable, actual experiencein future may vary from that assumed in the preparation of the EEV Information,and any such variations may be material. Deviations from assumed experience arenormal, and are to be expected. The EEV does not purport to be a market valuation of the Group and should not beinterpreted in that manner since it does not encompass all of the many factorsthat may bear upon a market value. For example, it makes no allowance for thevalue of future new business. Opinion In our opinion, on the basis of our review: • the methodology and assumptions used to prepare the EEV Information comply in all material respects with the European Embedded Values Principles set out by the CFO Forum in May 2004, and additional guidance released in October 2005 (the "CFO Forum Principles"); • the EEV Information has been compiled on the basis of the methodology and assumptions chosen by the Directors of Hansard Global plc, and complies in all material respects with the CFO Forum Principles. Reliances and Limitations A half-yearly review excludes procedures such as tests of controls andverification of models and historical information relevant to assumptions aboutfuture cash flows. It is substantially less in scope than a full review andtherefore provides a lower level of assurance. We have relied on data and information, including the value of net assets,management accounting data and solvency information, supplied to us by theGroup. We have relied on the reported mathematical reserves, the adequacy of thosereserves, and the methods and assumptions used to determine them. We haveassumed that all provisions made in the UK GAAP statements for any otherliabilities (whether actual, contingent or potential) of whatever nature, areappropriate. We have relied on information relating to the current and historical operatingexperience of the Group's life insurance business, including the results ofexperience investigations relating to policy persistency, and expense analysis.In forming our opinion, we have considered the assumptions used in the EEVInformation in the context of the reported results of those investigations. We have relied on the terms of the contracts, as they have been reported to us,being enforceable. We have not attempted to predict the impact of potentialfuture changes in the competitive forces in markets on the assumptions. Yours faithfully Deloitte & Touche LLP Deloitte & Touche LLP is a limited liability partnership registered in Englandand Wales with registered number OC303675 and its registered office atStonecutter Court, 1 Stonecutter street, London EC4A 4TR. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte ToucheTohmatsu ("DTT"), a Swiss Verein whose member firms are separate and independentlegal entities. Neither DTT nor any of its member firms has any liability foreach other's acts or omissions. Services are provided by member firms or theirsubsidiaries and not by DTT. Contacts and Advisors Registered Office Media EnquiriesHarbour Court Bell Pottinger Corporate & FinancialLord Street 6th Floor, Holborn GateBox 192 330 High HolbornDouglas LondonIsle of Man WC1V 7QDIM99 1QLTel: +44 (0)1624 688000 Tel: +44 (0)20 7861 3881Fax: +44 (0)1624 688008 Fax: +44 (0)20 7861 3233www.hansard.comChairman & Chief Executive BrokerDr L S Polonsky Panmure Gordon (UK) LimitedDr.polonsky@hansard.com Moorgate Hall 155 Moorgate London EC2M 6XB Tel. +44 (0)20 7459 3600 Fax. +44 (0)20 7459 3609Financial AdvisorLazard & Co. Limited50 Stratton StreetLondonW1J 8LLTel. +44 (0)20 7187 2000Auditor RegistrarPricewaterhouseCoopers Chamberlain Fund Services LimitedSixty Circular Road 3rd Floor Exchange HouseDouglas 54-62 Athol StreetIsle of Man DouglasIM1 1SA Isle of ManTel: +44 (0)1624 689689 IM1 1JDFax: +44 (0)1624 689690 Tel: + 44 (0)1624 641560 Fax: +44 (0)1624 641561Reviewing Actuaries UK Transfer AgentDeloitte & Touche LLP Capita IRG LimitedStonecutter Court The Registry1 Stonecutter Street 34 Beckenham RoadLondon BeckenhamEC4A 4TR KentTel: +44 (0)20 7936 3000 BR3 4TUFax: +44 (0)20 7583 1198 Tel: +44 (0)20 8639 2236 Fax: +44 (0)20 8639 2279 Financial CalendarEx-dividend date for interim dividend 4 April 2007Record date for interim dividend 10 April 2007Payment date for interim dividend 4 May 2007Announcement of 3rd quarter new business 30 April 2007figuresAnnouncement of 4th quarter new business 30 July 2007figuresPreliminary announcement of results 27 September 2007 This information is provided by RNS The company news service from the London Stock Exchange