Last checked at 28 Jan 2010 07:00
28 January 2010
Hansard Global plc
New business results for the six months ended 31 December 2009
Q2 New Business Flows 25% up on Q1
Hansard Global plc ("Hansard" or "the Group"), the specialist long-term savings provider, issues its new business results for the six months ended 31 December 2009.
Summary
| • | Improved new business margins in the six-month period of approximately 6.5% on Present Value of New Business Premiums ("PVNBP") basis; |
| • | New Business of £40.9m PVNBP in Q2 2009/10 is 25% ahead of Q1; |
| • | £1.16 billion of Assets under Administration at 31 December 2009, up 15.6% since 30 June 2009. Policyholder cash flows have been strong through the period; |
| • | Financial position of the Group remains strong, with no borrowings. |
Leonard Polonsky, Chief Executive of Hansard Global plc, commented:
"The performance of the Group in the second quarter of the 2009/10 financial year reflects improving investor appetite and the continued confidence of intermediaries and their clients in Hansard's products. The financial position of the Group remains strong. We have continued to generate strong cash flows from policyholders, underpinning growth of 15.6% in Assets under Administration since 30 June 2009.
We are confident that the outlook for growth in new business and profitability remains positive for the Group. The Board believes its strategy of controlling costs whilst at the same time investing in distribution and systems is beginning to reap rewards."
For further information:
| Hansard Global | +44 (0) 1624 688000 |
| Leonard Polonsky, Chief Executive | |
| Gordon Marr, Managing Director | |
| Vince Watkins, Chief Financial Officer | |
| Pelham Bell Pottinger | 44 (0) 20 7337 1500 |
| Daniel de Belder |
Hansard Global plc
New business results
For the six months ended 31 December 2009
Overview
The improvement in market conditions and 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 three months. New business flows in Q2 2009/10 of £40.9m on the basis of Present Value of New Business Premiums ("PVNBP") are 25% above the flows of Q1 2009/10.
New business for the six-month period ended 31 December 2009 (H1 2009/10) of £73.5m PVNBP is approximately 21% below the level of the corresponding period of the previous financial year, reflecting primarily the stronger overall economic conditions in Q1 2008/09. By comparison, at the end of Q1 2009/10 the shortfall versus the comparable period was approximately 36%. This comparison continues to improve with current levels of new business.
New business margins for H1 2009/10 are approximately 6.5% on the PVNBP basis (up from 5.8% at Q1 2009/10), due to increased levels of regular premium business and continued expense management.
New Business Flows - Three months ended 31 December 2009
The Group has achieved continuing new business flows while retaining its margins. New business flows post 1 October 2009 continue to be strong and above the levels of flows experienced after 1 October 2008, illustrating an improvement in market conditions and the continuing level of interest in Hansard's products among intermediaries and their clients.
New business flows are summarised as follows (comparisons on an actual currency basis):
| Three months ended | Six months ended | |||||
| 31 December | 31 December | |||||
| 2009 | 2008 | % | 2009 | 2008 | % | |
| Basis | £m | £m | change | £m | £m | change |
| Compensation Credit | 3.0 | 3.0 | (0.0)% | 5.3 | 6.7 | (20.9)% |
| Present Value of New Business Premiums | 40.9 | 41.5 | (1.4)% | 73.5 | 93.0 | (21.0)% |
| Annualised Premium Equivalent | 5.6 | 5.5 | 1.8% | 9.8 | 12.2 | (19.7)% |
Present Value of New Business Premiums
New business premiums on the PVNBP basis during Q2 2009/10 totalled £40.9m, an increase of 25% over the new business levels of £32.6m in Q1, driven largely by a growth of 50% in regular premium business over the first quarter.
Regular premium flows in the quarter, particularly from Latin America and the Far East, indicate recovery in investor confidence. The flow of single premium business in Q2 2009/10 of £21.6m is up 10% on Q1, albeit still below comparative levels (Q2 2008/09: £24.0m). One large case received in Q2 2008/09 had a premium of £4.1m, demonstrating that the flow of larger single premium cases can distort the comparisons with the previous financial year.
New business flows are summarised as follows (comparisons on an actual currency basis):
| Three months ended | Six months ended | |||||
| 31 December | 31 December | |||||
| 2009 | 2008 | % | 2009 | 2008 | % | |
| PVNBP | £m | £m | change | £m | £m | change |
| Regular premium | 19.3 | 17.4 | 10.9 % | 32.2 | 40.7 | (20.9)% |
| Single premium | 21.6 | 24.1 | (10.4)% | 41.3 | 52.3 | (21.0)% |
| Total | 40.9 | 41.5 | (1.5)% | 73.5 | 93.0 | (21.0)% |
The principal currency receipts (as a percentage of PVNBP) in the quarter to 31 December are set out below.
| 31 December | ||
| 2009 | 2008 | |
| Currency | % | % |
| US Dollars | 40.5 | 43.6 |
| Euro | 29.6 | 32.1 |
| Sterling | 21.5 | 12.9 |
We have seen a significant increase in the number of policies set up in sterling, particularly from Europe. Any further strengthening of sterling against those other currencies during the remainder of the financial year will reduce reported new business.
We are beginning to see evidence of renewed single premium investments after 31 December 2009 and we anticipate that these will be reflected in the results of Q3 2009/10.
New Business Margins
New business margins on the PVNBP basis for H1 2009/10 were approximately 6.5%. These margins are well above 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 are higher margin than single premium business, have contributed to the growth in the margin since Q1 2009/10.
Assets under Administration
Despite the residual uncertainty in capital markets, strong policyholder cash flows have been experienced in the six-month period. The value of Assets under Administration as at 31 December 2009, at £1.16bn, has risen by 15.6% since 30 June 2009 (£1.002bn).
Results for the half-year ended 31 December 2009
Trading results for the half-year are expected to be announced on 25 February 2010.
Outlook
Q2 2009/10 has shown encouraging signs that new business levels are recovering without any reduction in margins. We believe that sustained investment in our distribution proposition, coupled with increased spend on systems efficiencies, will ensure continued profitability.
Furthermore, we are confident that the financial strength of the Group means that we are well placed to continue making the necessary investment in sales and systems to further enhance the performance of the Group in the remainder of the 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 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.