Personal Group Regulatory News (PGH)

PERSONAL GROUP HOLDINGS PLC

("Personal Group" or the "Group")

ANNOUNCEMENT OF RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2015

Personal Group Holdings Plc (AIM; PGH) a leading provider of employee benefits, employee related insurance products and financial services in the UK, reports its results for the year ended 31 December 2015

* EBITDA is defined as earnings before interest, tax, depreciation, amortisation of intangible assets, goodwill impairment, share based payment expenses, acquisition costs, reorganisation costs, write back of contingent consideration and release of tax provision.

Mark Scanlon, Chief Executive of Personal Group, commented:

"2015 has been another strong year of progression for the Group. Our core business continued to perform well, with the addition of the new software platform Hapi giving us access to completely new markets for Personal Group. Lets Connect has bedded in, following its acquisition in 2014 with revenue increasing 49% during the year and now forms part of the foundations of our business. 2015 saw the creation of PG Mobile, which again opens fresh avenues for the Group, and as it continues to integrate with the wider business I believe it will add value to Personal Group as a whole. Technology remains a key focus for the Group and we will continue to invest in our proprietary Hapi platform during 2016. Overall, I look forward to 2016 with confidence as the development of Personal Group continues."

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Notes to editors:

With over 30 years' experience of looking after its customers' employees, Personal Group Holdings Plc (AIM: PGH) is a leading provider of employee benefits and employee related insurance products, offering benefits programmes to over 2 million employees across the UK.

Personal Group's innovative approach to using technology to deliver its programmes, combined with its face-to-face method of communicating with employees, makes its offering compelling to blue chip clients across the UK as a way of attracting, retaining and motivating employees. The Group tailors its packages to include insurance products such as hospital and convalescence plans, death benefit and income protection plans, as well as lifestyle benefits such as holiday and retail discounts, health and wellbeing benefits and a range of tax efficient benefits.

Personal Group can also supply home technology via salary sacrifice through its subsidiary Lets Connect. Offering the latest iPads and other tablets, home computers and laptops, smart phones and smart TVs is a highly engaging benefit from which both the employer and employee can profit. In April 2015 the Group established its own Mobile Virtual Network Operator (MVNO) called Personal Group Mobile Ltd. which was achieved through the acquisition of the assets of shebang Technologies Ltd. This means that home technology, including handsets and airtime, can be provided via salary sacrifice with a reduction of c10-47% on costs to its client's employees.

Personal Group has a strong client base across a range of sectors including transport, where it works with the likes of Network Rail, Stagecoach and EYMS Group Ltd, and healthcare, where clients include Four Seasons Health Care, Priory Group and Spire Healthcare. The Group also covers logistics, with companies such as TNT Express and Bibby, and motoring with Manheim and JCT600 as clients. In addition the Group also has a strong presence in food manufacturing and service and clients include 2 Sisters Food Group and Young's Seafood.

With over 520 clients the Group has grown considerably and provides engaging and effective benefits packages across a breadth of sectors.

For further information, go to www.personal-group.com.

Chairman's Statement

The Group's performance in 2015 reflects sound organic growth in our main employee benefits and insurance business, major growth in our Lets Connect business, and material investment both in our technology platform and in the broadening of our product offering.

Total Group revenue increased by 27% to £59.6m (2014: £47.0m), with significant growth in the Lets Connect salary sacrifice business we acquired in 2014, and also included £1.5m revenue from PG Mobile, the mobile virtual network operator (MVNO) business we acquired in April 2015. As mentioned in our statement at the time of acquisition, we invested materially in this business in 2015. Even with this expenditure, and our continuing investment in our technology platform, overall EBITDA has increased by 5%, to £11.6m (2014: £11.0m), and profit before tax has increased by 14%, to £10.4m (2014: £9.2m). Earnings per share were up 23%, at 30.8p (2014: 25.1p).

Dividend

The Group has adopted a progressive dividend policy in recent years, and the Board has proposed we maintain this, along with the payment of dividends quarterly. The Board therefore recommends a 5% increase in the dividend payable in 2016, to 22.0p (2015: 20.9p) per share. We made the first of these quarterly dividend payments, of 5.5p per share, on 24 March 2016.

Business review

Our main insurance business has again performed strongly in 2015. It was another record year for generating new business, and EBITDA from these activities was up 11% at £9.5m (2014: £8.6m).

We introduced our new technology platform, 'Hapi', the product of our Zeus programme, to 26 of our clients during 2015. It has been extremely well received, and is proving to be an exceptionally valuable component in our sales presentations to prospective new clients. Hapi is a state-of-the-art platform which is very customer-friendly, being easy to navigate and use. Through its wide functionality, it provides a strong digital connection with our individual employee customers. Hapi's versatility makes it attractive to businesses of all sizes, which opens up the SME market to us in a way which was not feasible before.

We have been very pleased with the performance of Lets Connect. In 2015, its first full year under our ownership, its revenue and EBITDA increased by 49% and 62% respectively, to £25.5m (2014: £17.0m) and £2.3m (2014: £1.4m).

In April 2015, we announced the acquisition of the trade and certain assets of an MVNO business which we have rebranded as PG Mobile. The announcement referred to the impact the investment would have on our 2015 outcome due to restructuring, relaunch and other costs. PG Mobile enables us to offer airtime tax efficiently, both as part of our smartphone Lets Connect package and as a stand-alone part of our employee benefits offering.

Governance

Although as an AIM-traded Group we are not required to comply with all the provisions of the Combined Code, we do try to comply with it in most areas, particularly in our Board structure, in the operation of our Board and wider governance areas, and in our disclosures.

Our business would be nothing without its employees. Personal Group has always had an employee-oriented ethos, and our success over the years is significantly attributable to the genuinely distinctive commitment and enthusiasm of our employees - for which I thank them most sincerely on behalf of the Board.

Over the past two years, we have involved our employees in a long-term charitable project, supported financially from the Personal Assurance Charitable Trust (PACT), to build a school in Kenya. In 2015, 19 of our employees visited the project in Kenya, some to help with building work and others to work with the children. Employees have universally found this a richly rewarding, and in many cases, a life-changing experience.

Prospects

Opportunities to increase our shareholder value continue to develop as the Group broadens the range of its products and services to clients, and to the employees of these companies. We have recently invested, and will in 2016 continue to invest, in PG Mobile and the Hapi platform. The Board considers the potential of both areas of our business to be considerable, in their own right and in the way they complement and strengthen our Lets Connect and our employee benefits and insurance areas. The Group is therefore very well placed to continue its excellent progress in its mission to be an innovative, technologically enabled employee engagement business of scale, providing consistently good returns to its shareholders.

I have informed the Board that I will be standing down as Group Chairman at the AGM on 5 May 2016, after more than six years in the role and a further seven years before then as a Non-Executive Director. It has been an immense privilege to have played a role in this fine business, which has developed so significantly over the years whilst retaining a compelling culture both in its employee ethos and in its customer focus. I am delighted that Mark Winlow, who has exceptionally wide experience across the insurance industry and has been a Non-Executive Director of Personal Group for the past two and a half years, will succeed me as Chairman. I wish him, the Board, and all those others who contribute to the success of the Group, well for the future.

Chris Curling

Non-Executive Chairman

29 March 2016

Chief Executive's Business Overview

2015 was a very progressive year for the Company in many ways. Our revenue grew again, by 27% to £59.6m (2014: £47.0m). Our insurance business continued to grow, as did Lets Connect. We have now fully integrated the Lets Connect business, while taking the opportunity to make another bolt-on acquisition, with the establishment of PG Mobile. Our new digital platform, Hapi, is increasing client engagement with our business and we continue to attract and retain new clients. We introduced over 50 new clients across the Group in 2015.

The main insurance business grew its revenue 9% to £30.5m (2014: £28.0m), and grew EBITDA 11% to £9.5m (2014: £8.6m). Our quality remains high, creating a high level of customer satisfaction.

Our existing clients are reacting very positively to our new digital capability, which is also attracting new clients.

Our technology salary sacrifice business, Lets Connect, grew revenue by 49% to £25.5m (2014: £17.0m), and EBITDA by 62%, to £2.3m (2014: £1.4m). We have begun to cross-sell to our existing client base, as well as opening up new third-party channels such as AON and Sodexo. We have broadened our product range to improve the attractiveness of our offering. Most importantly, this business now operates as an integral part of the Group. Its founders withdrew from daily operation in December 2015, though they will remain in an advisory capacity throughout 2016.

Overall profit before tax grew by 14% to £10.4m (2014: £9.2m).

Acquisition remains a key part of our growth strategy, and we took the opportunity to add airtime to our salary sacrifice offerings. Smartphones and airtime are an attractive product for employers, as they don't attract any benefit-in-kind tax. As such, people can save up to 47% of the cost of their phone and airtime. We would not consider operating airtime schemes unless we can control the customer experience, and this is best achieved by operating as a Mobile Virtual Network Operator (MVNO). In April we acquired the trade and certain assets of Shebang Technologies Group Ltd to establish our MVNO, PG Mobile. We relocated the business from Daventry to our main office in Milton Keynes, and we are now investing in the business so it is capable of performing to its full potential. The software that underpins the business, together with the strategic relationship with Hutchinson 3G, the infrastructure provider, gives us a very solid basis from which to progress. In 2015 we saw a revenue level of £1.5m, with an EBITDA loss of £1.1m, in the nine months of ownership. We will continue to invest in this business as planned, to realise the potential we see in it. There have been a number of challenges to overcome, none of which in isolation are an impediment, but collectively have delayed us, resulting in the business taking longer than anticipated to get a full trading position.

Our most significant achievement of 2015 was the completion of our Zeus programme, which saw the release, for the first time, of our own digital platform. This platform is named Hapi and is a comprehensive system through which we can provide all manner of services. This capability will revolutionise our position in the marketplace and thereby our business. Though only launched in the third quarter, we already have more than 50,000 users across 26 clients, and the system is proving of interest to potential new clients. We are now able to offer functionality previously not available in a single system: digital payslips, push notifications, salary sacrifice products and retail discounts, to name but a few services. All of this is available anywhere, on any device and, if required, through a bespoke smartphone app, which is in increasing demand from our clients. Providing this functionality through an app allows our clients to deliver right into the 'pocket' of their employees, avoiding potentially huge infrastructure costs while at the same time offering convenience. We can even provide the telephone handset with or without airtime, if a client wishes. All of this puts us in a strong position to take advantage of what looks like a fast emerging market opportunity and we will continue to invest in our technology accordingly.

Our Hapi system was designed to work with an employee count of just one. Therefore it allows us to target the SME market.

Strategy

We set our strategy in 2012 and it continues to serve us well. Over the past four years we have continually innovated in regard to the service products we have taken to our customers, including retail discounts, employee assistance programmes and more recently payslip delivery. We have also significantly improved the digital delivery of our service on tablet computer when presenting to customers as well as easier fulfilment of services through our digital connection with them. Technology has been a major enabler of improved customer service with up-to-the-minute information available to our own employees and most importantly to our clients.

People

We continue to be able to attract, motivate and develop talent in our business. Remarkably through a period of great change in 2015 we saw our employee engagement rating increase. The willingness of our staff to work hard is a credit to the team, and for that I thank each and every one of our employees.

Mark Scanlon

Chief Executive

29 March 2016

Chief Financial Officer's Statement

Revenue

Revenue for the Group of £59.6m in the year ended 31 December 2015, was 26.7% ahead of 2014 (£47.0m) largely due to good organic growth in our insurance business, an increase of £8.5m (49.4%) from the revenue from Lets Connect, acquired in 2014, and £1.5m from PG Mobile, set up in 2015 following the acquisition of the trade and certain assets of shebang Technologies Group Limited out of administration.

EBITDA

EBITDA increased by £0.6m (5.3%) to £11.6m (2014: £11.0m), reflecting our strategy of focusing on increasing our sales capacity, improving our technology offering to clients and policyholders, and the impact of the acquisition of Lets Connect. Setting up our own Mobile Virtual Network Operator (MVNO), PG Mobile, had a negative impact of £1.1m on EBITDA, without which the underlying business grew 15.5%.

Profit before tax

Profit before tax for the year was a record £10.4m (2014: £9.2m), an increase of 13.6%. This is a result of the improved performance of the existing insurance business, coupled with that of Lets Connect.

The period for determining the final price we paid for Lets Connect finished on 31 December 2015. This resulted in a further payment of £0.3m, bringing the total cost to £6.3m. Given the post-acquisition EBITDA of £3.7m, this is a pleasing return to date, with much more to come. As a consequence of this, we have released £2.7m of the £3.0m previously held as deferred consideration. In addition, we have reduced the provision to cover potential tax liabilities arising from compensation schemes for the Directors prior to acquisition by £0.8m to £2.2m.

During the year, we invested in PG Mobile following the acquisition of certain assets of shebang Technologies Group Ltd, out of administration. We are currently investing in this business so it is capable of performing to its full potential. It made a loss of £3.7m in the year, having incurred restructuring and acquisition costs of £1.2m and goodwill and intangible impairment totaling £1m. The business has so far not managed to meet the revenue stream targets originally envisaged.

Given the future uncertainty and relative immaturity of this business, we did not feel it was appropriate to hold any goodwill or intangible asset on the balance sheet.

The movement in the PBT, year-on-year, was also affected by the share-based payments of £1.3m (2014: £0.8m), which is mainly the LTIP charge for the two schemes in operation. The charge is predominantly caused by the rise in the share price during 2015 (up 32%) together with management's expectation for the future, and market capitalisation over the duration of the five year schemes.

Profit after tax

The tax charge for the year was £1.1m (2014: £1.6m). The resulting profit after tax for the year was £9.3m (2014: £7.6m), an increase of £1.7m on 2014.

Dividend

The final dividend paid in 2015, of 5.225p, brings the full year dividend to 20.9p per share (2014: 19.6p) paid in the year, an increase of 6.6%. Our first quarterly dividend for 2016, of 5.5p, has already been announced and was paid on 24 March. If business continues as anticipated we expect to pay further dividends of the same amount in June, September and December 2016.

Balance sheet

At 31 December 2015, the Group had a surplus of £5.5m over its Group Capital Resources requirement of £5.0m. The Group balance sheet remains strong, with no debt. 25% of the Group's total assets are held in cash or cash equivalents. The balance sheet of our underwriting subsidiary, Personal Assurance Plc (PA), had a surplus over capital resource requirements of £6.6m at 31 December 2015. This provides a margin of solvency which allows PA to write further significant increases in premium income without the requirement for new capital. We made significant progress in our Solvency II preparation during 2015, and remain confident of meeting the regulatory requirements, having submitted a further ORSA to the regulator in December 2015.

EPS

Basic EPS was 30.8p (2014: 25.1p).

Mike Dugdale

Chief Financial Officer

29 March 2016

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 15

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2015

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 15

The financial statements were approved by the Board on 29 March 2016.

M I Dugdale M W Scanlon

Company number: 3194991

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015

Equity attributable to equity holders of Personal Group Holdings Plc

* All Employee Share Option Plan (AESOP)

** Long-Term Incentive Plan (LTIP)

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2014

Equity attributable to equity holders of Personal Group Holdings Plc

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

Notes to the financial statements

1. The four operating segments of the Group are:

- Core Insurance

Personal Assurance Plc (PA), a subsidiary within the Group, is a PRA regulated general insurance company and is authorised to transact accident and sickness insurance. It was established in 1984 and has been underwriting business since 1985. In 1997 Personal Group Holdings Plc (PGH) was created and became the ultimate parent undertaking of the Group.

This operating segment derives the majority of its revenue from the underwriting by PA of insurance policies that have been bought by employees of host companies via bespoke benefit programmes.

Up until March 2015 insurance related income represented commission receivable for death benefit policies underwritten by 3rd parties. From March 2015 these policies have been underwritten by the Group's subsidiary Personal Assurance Guernsey limited (PAGL) and, as such, their income now falls within earned premium.

- IT Salary Sacrifice

IT salary sacrifice refers to the trade of Lets Connect a salary sacrifice technology company purchased in 2014.

- Mobile

Mobile refers to the trade of PG mobile a mobile phone salary sacrifice company set up from the trade and assets of Shebang Technologies purchased in 2015.

- Other

The other operating segment consists exclusively of revenue generated by Berkeley Morgan Group (BMG) and its subsidiary undertakings and Personal Management Solutions (PMS).

BMG was acquired by PGH in January 2005 and generates income via financial services and private medical insurance.

PMS is an employee benefit company that offers a variety of employee incentive schemes.

The revenue and net result generated by each of the Group's operating segments are summarised as follows:

All income is derived from the UK.

2. Taxation comprises United Kingdom corporation United Kingdom corporation tax of £1,446,000 (2014: £1,855,000) and deferred taxation credit of £298,000 (2014: 227,000)

3. The basic and diluted earnings per share are based on profit for the financial year of £9,301,000 (2014: £7,569,000) and on 30,200,755 basic (2014: 30,066,390) and 32,598,684 diluted (2014: 30,901,027) ordinary shares, the weighted average number of shares in issue during the year.

4. The total dividend paid in the year was £6,325,000 (2014: £5,899,000)

This preliminary statement has been extracted from the 2015 audited financial statements that will be posted to shareholders in due course. The statutory accounts for each of the two years to 31 December 2014 and 31 December 2013 received audit reports, which were unqualified and did not contain statements under section 498 (2) or (3) of the Companies Act 2006. The 2014 accounts have been filed with the Registrar of Companies but the 2015 accounts are not yet filed.