Last checked at 11 May 2017 07:00
11 May 2017
Hansard Global plc
Trading update for the period ended 31 March 2017
Hansard Global plc ("Hansard" or "the Group"), the specialist long-term savings provider, issues its new business results for the quarter ended 31 March 2017. All figures refer to this period ("Q3 2017"), except where indicated.
Summary
· We have maintained our trend of increasing levels of new business during the quarter, with the Far East and Latin America now following the success achieved in the Middle East and Rest of World regions;
· New business for Hansard International Limited ("Hansard International") for Q3 2017 was £38.9m in PVNBP ("Present Value of New Business Premiums") terms, approximately 28% higher than Q3 2016;
· As previously announced, our strategic alliance with Union Insurance Company PSC in the UAE was launched during Q3 2017;
· Assets under administration have increased since the last quarter by £41m or 4% to £1.04 billion;
· The Group traded profitably during the period and remains strongly capitalised.
Gordon Marr, Group Chief Executive Officer, commented:
"It is pleasing to see such strong rates of new business growth and for it to extend across all the regions in which we operate. We are delighted with the positive reception from our distribution partners in the UAE around our alliance with Union Insurance and look forward to achieving growth in that area in the coming year."
For further information:
Hansard Global plc | +44 (0) 1624 688000 |
Gordon Marr, Group Chief Executive Officer |
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Tim Davies, Chief Financial Officer |
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Bell Pottinger | +44 (0) 20 3772 2500 |
Daniel de Belder |
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Duncan Mayall |
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Hansard Global plc
New business results for the PERIOD ended 31 March 2017
OVERVIEW
The Group continues to focus on the distribution of regular and single premium products in a range of jurisdictions around the world, achieving well diversified new business growth. Our main sources of new business were well spread in Q3 2017 across the Middle East & Africa, Far East and Rest of World regions.
In Present Value of New Business Premiums ("PVNBP") terms, levels of new business in Q3 2017 were 28% ahead of the equivalent prior year quarter (Q3 2016). They were 5% lower than Q2 2017 which is in line with our seasonal expectations for the early part of the calendar year.
The Group has traded profitably during the period and remains strongly capitalised.
New Business Flows
New business flows for Hansard International for the quarter and the nine months ended 31 March are summarised as follows:
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| 2017 | 2016 | % |
| 2017 | 2016 | % | |
Basis | £m | £m | change |
| £m | £m | change | |
Present Value of New Business Premiums | 38.9 | 30.4 | 28.0 % |
| 113.8 | 86.8 | 31.1 % | |
Annualised Premium Equivalent | 5.8 | 4.5 | 28.9 % |
| 17.5 | 12.9 | 35.7 % | |
Present Value of New Business Premiums ("PVNBP")
New business flows for Hansard International on the basis of PVNBP are broken down as follows:
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| 2017 | 2016 | % |
| 2017 | 2016 | % |
PVNBP by product type | £m | £m | change |
| £m | £m | change |
Regular premium | 20.3 | 15.2 | 33.6 % |
| 62.9 | 45.2 | 39.2 % |
Single premium | 18.6 | 15.2 | 22.4 % |
| 50.9 | 41.6 | 22.4 % |
Total | 38.9 | 30.4 | 28.0 % |
| 113.8 | 86.8 | 31.1 % |
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| 2017 | 2016 | % |
| 2017 | 2016 | % |
PVNBP by geographical area | £m | £m | change |
| £m | £m | change |
Rest of World | 11.9 | 12.3 | (3.3)% |
| 38.1 | 34.5 | 10.4 % |
Middle East and Africa | 10.9 | 9.7 | 12.4 % |
| 34.9 | 24.6 | 41.9 % |
Far East | 10.4 | 5.3 | 96.2 % |
| 26.2 | 18.1 | 44.8 % |
Latin America | 5.7 | 3.1 | 83.9 % |
| 14.6 | 9.6 | 52.1 % |
Total | 38.9 | 30.4 | 28.0 % |
| 113.8 | 86.8 | 31.1 % |
Note: Prior year geographical analysis has been reanalysed to be consistent with 2017 classifications of policies written in trust. This resulted in £3.4m being reanalysed from Rest of World to Middle East & Africa (£3.2m) and Far East (£0.2m).
In Q3 2017, we continued to see strong growth of both regular and single premium business. This business was well diversified across the regions in which we operate with encouraging growth levels also now seen in the Far East and Latin America.
Expatriate broker distribution has performed particularly strongly and we have benefitted from the groundwork we have done, revitalising old relationships and developing new ones.
Our strategic alliance with Union Insurance Company PSC in the UAE was launched in Q3 2017. New terms of business have been signed with a number of locally licensed insurance brokers and in line with our expectations, we expect business will start being issued onto our books in Q4 2017.
Assets under Administration ("AUA")
The composition and value of AuA is based upon the assets selected by or on behalf of contract holders to meet their savings and investment needs. Reflecting the wide geographical spread of the Group's customer base, the majority of premium contributions and of AuA are designated in currencies other than sterling.
The total of such assets is affected by the level of new premium contributions received from new and existing policy contracts, the amount of assets withdrawn by contract holders (including those withdrawn from Hansard Europe Designated Activity Company ("Hansard Europe"), which closed to new business in 2013), charges and the effect of investment market and currency movements. These factors ultimately affect the level of fund-based income earned by the Group.
During Q3 2017, AuA grew by £41m, consolidating the position at over £1 billion. The growth in AuA was driven primarily by continued stock market gains, offset somewhat by foreign exchange losses as the US dollar weakened against sterling in the quarter.
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| 31 March |
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| 2017 | 2016 |
| 2017 | 2016 |
| £m | £m |
| £m | £m |
Deposits to investment contracts | 37.2 | 32.6 |
| 110.3 | 93.5 |
Withdrawals from contracts and charges | (37.3) | (34.2) |
| (120.4) | (130.4) |
Effect of market and currency movements | 41.0 | 22.0 |
| 128.5 | 6.4 |
| 40.9 | 20.4 |
| 118.4 | (30.5) |
Opening balance | 1,001.0 | 856.2 |
| 923.5 | 907.1 |
Assets under Administration at 31 March | 1,041.9 | 876.6 |
| 1,041.9 | 876.6 |
The movement in AuA is split as follows between Hansard International and Hansard Europe:
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| 2017 | 2016 |
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| £m | £m |
Hansard International |
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| 121.4 | 0.2 |
Hansard Europe |
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| (3.0) | (30.7) |
Increase / (decrease) in period |
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| 118.4 | (30.5) |
FINANCIAL PERFORMANCE AND POSITION - NINE MONTHS TO 31 MARCH 2017
· 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 2017 was marginally lower than the value at 31 December 2016, after paying out £4.9m in dividends. New business margins have not altered significantly since 31 December 2016.
· Capitalisation and Solvency
The Group continues to be strongly capitalised, enabling it to satisfy operational, regulatory, contract holder and intermediary expectations. There has been no material change in the level of assets in excess of aggregate minimum regulatory capital requirements. As at 31 December 2016 the Group had excess assets of £38m.
· Interim Dividend
An interim dividend of 3.6p per share (2016: 3.6p) was paid on 30 March 2017.
Litigation and policyholder complaints
The Group continues to carefully manage its litigation relating to the legacy operations of Hansard Europe. Hansard Europe was notified of 7 new writs in the period originating from Italy, Belgium and Germany, totalling £0.6m. Total writs outstanding at the end of the period were £13.8m.
Results for the year ENDing 30 JUNE 2017
New business results for the full-year are scheduled to be announced on 27 July 2017. Trading results for the full-year are expected to be announced on 28 September 2017.
Outlook
We look forward to a continuing upward trend in each of the regions in which we operate and to seeing growth arising from our alliance with our strategic partner in the UAE, Union Insurance.
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 policy 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 Middle East, the Far 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 closed to new business with effect from 30 June 2013.
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· | 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 policies 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.
This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation No 596/2014.