Personal Group Regulatory News (PGH)

PERSONAL GROUP HOLDINGS PLC

("Personal Group" or "the Group")

Interim Results

Personal Group Holdings Plc (AIM: PGH), a leading provider of employee benefits, employee related insurance products and financial services in the UK, is pleased to report its interim results for the six months ended 30 June 2014:

Highlights

Mark Scanlon, Chief Executive of Personal Group, commented:

"2014 is a year in which we expect to see the positive results of our extensive investment and change programs over the past two years. The strong performance during the period gives us confidence that we will indeed fulfil this aspiration set out two years ago. Return on the investment is coming through in top line as well as bottom line growth. Our new business sales continue to accelerate whilst at the same time the Group is achieving cost efficiencies.

"We continue to execute against our stated strategy and our recent acquisition of Lets Connect is now integrated and operating ahead of our expectations. Our core business is in a strong position and we have a firm platform upon which to continue to grow and expand the Group."

-Ends-

Enquiries:

Notes to editors:

With a 30 year track record 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. Personal Group's benefits offer employees an effective way of making their pay-packet stretch further. 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.

In March 2014, the Group acquired Lets Connect, a leader in the home technology salary sacrifice market which focuses on large enterprises in the private and public sector.

Personal Group has a strong client base across a range of sectors including transport, where it works with the likes of Network Rail and Stagecoach, healthcare, where clients include Priory Group and Spire Healthcare and logistics, with companies such as TNT Express. 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 550 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

Summary

The Group continued to perform strongly in the first half of 2014, with core revenue up 9.9% on the equivalent period in 2013 and record new business generation. Underlying EBITDA increased by 10.6%. We are encouraged by the performance and prospects of Lets Connect, the business which we acquired in March 2014.

Financial Performance

Total Group revenue for the six months ended 30 June 2014 increased by 24.8% to £17.4m (2013: £13.9m). This reflects a 9.9% increase in earned premiums net of reinsurance and the revenue contribution from Lets Connect.

Annualised new business premiums written during the period from the Group's core employee benefits and insurance activities were once again a half-year record, at £5.1m, 4.5% ahead of 2013 (£4.9m).

Underlying EBITDA (earnings before interest, tax, depreciation, amortisation of intangibles, share based expenses and acquisition costs) was £4.4m (2013: £4.0m). Although this represents a 10.6% improvement on the equivalent period in 2013 the Group's performance would have been strongerin the period but for legal costs incurred whilst seeking to restrain what the Group is advised are unlawful activities of a company which employs three former Personal Group employees.  A High Court hearing took place in July and the outcome should be known in October 2014, following the end of the legal summer vacation.  

Group Profit before tax is £3.5m (2013: £3.3m). This reflects £0.3m of costs incurred in the acquisition of Lets Connect.

Total equity at 30 June 2014 was £24.7m (31 December 2013 £25.2m). The structure of the balance sheet at 30 June 2014 reflects the acquisition of Lets Connect.

Business Review

The Group's investment and growth strategy continues its positive impact on financial performance. Organic growth is strong in our core product areas: the first half of 2014 included a record week, month and quarter for new business generation and again resulted in a record half year. Our pipeline of new and existing host company launches remains strong.

Our investment in technology has continued, with further refinements to our iPad "front-end" sales process and work on an enhanced digital offering for our customers with the intention both of increasing customer loyalty and of opening up the possibility of additional income streams.

The integration of Lets Connect into Personal Group has proceeded well. Lets Connect is an employee benefits specialist providing technology products through salary sacrifice. Historically a very significant proportion of Lets Connect business is transacted in November and December each year. In the period to 30 June 2014 Lets Connect has performed ahead of expectations and the developing pipeline for delivery towards the end of the year looks promising. Lets Connect provides the Group with an enhancement to our existing salary sacrifice offering as well as an opportunity to sell the Personal Group core products into Lets Connect's blue chip customer base of more than 100 companies.

Dividends

The first two dividends of 2014, each of 4.9p per share, were paid in March and June, with the third dividend of the same amount being paid on 25th September 2014. The Directors expect that the fourth and final dividend for 2014 of the same amount will be paid in December. This would give a total for the year of 19.6p per share (2013: 18.6p per share), an increase of 5.4%.

The Board

As announced earlier in the year John Barber retired in June. As Finance Director for over 20 years he had overall responsibility for the Group's financial and company secretarial areas until the appointment of Mike Dugdale as Chief Financial Officer in January 2013. We thank him for his very considerable contribution to the success of the Group.

It was recently announced that Ken Rooney would be retiring from his executive position as Chief Operating Officer in June 2015. We are delighted that he will remain on the Board as a Non-executive Director thereafter.

Outlook

In my Statement in the Annual Report for 2013 I referred to 2014 as a year in which we would start to see the benefits of our investment programme. This is now being reflected in the increasing levels of new business written, a strong pipeline for our core business, and increased profits. We are delighted to report that Lets Connect has made a strong start as part of Personal Group. Overall trading remains in line with expectations.

C J Curling

Non-Executive Chairman

24 September 2014

Personal Group Holdings Plc

For the 6 months ended 30 June 2014

Consolidated income statement

All operations are considered to be continuing.

Personal Group Holdings Plc

For the 6 months ended 30 June 2014

Consolidated statement of comprehensive income

Personal Group Holdings Plc

For the 6 months ended 30 June 2014

Consolidated balance sheet at 30 June 2014

Personal Group Holdings Plc

For the 6 months ended 30 June 2014

Consolidated balance sheet at 30 June 2014

Personal Group Holdings Plc

For the 6 months ended 30 June 2014

Consolidated statement of changes in equity for the six months ended 30 June 2014

Personal Group Holdings Plc

For the 6 months ended 30 June 2014

Consolidated statement of changes in equity for the year ended 31 December 2013

Personal Group Holdings Plc

For the 6 months ended 30 June 2014

Consolidated statement of changes in equity for the six months ended 30 June 2013

Personal Group Holdings Plc

For the 6 months ended 30 June 2014

Consolidated cash flow statement

 Notes to the consolidated financial statements

1 General information

The principal activities of Personal Group Holdings Plc ('the company') and subsidiaries ('the group') include transacting short-term accident and health insurance and providing employee benefits related business and financial services in the UK.

The company is a public limited company incorporated and domiciled in England. The address of its registered office is John Ormond House, 899 Silbury Boulevard, Milton Keynes MK9 3XL.

The company's shares trade on the AIM of the London Stock Exchange.

The condensed consolidated financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the group as at and for the year ended 31 December 2013.

The financial information for the year ended 31 December 2013 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The statutory financial statements for the year ended 31 December 2013 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

These interim financial statements are unaudited and have not been reviewed by the auditors under International Standard on Review Engagements (UK and Ireland) 2410.

These consolidated interim financial statements have been approved for issue by the board of directors on 24 September 2014.

2 Accounting policies

These June 2014 interim consolidated financial statements of Personal Group Holdings Plc are for the six months ended 30 June 2014. These interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2013.

These financial statements have been prepared on the basis of the recognition and measurement requirements of those IFRS standards and IFRIC interpretations as adopted by the EU, issued and effective or issued and early adopted in respect of periods beginning on or after 1 January 2013.

The principal accounting policies have remained unchanged from the year ended 31 December 2013.

3 Segment analysis

The group operates two trading operating segments, namely employee benefits insurance and consultancy; and financial services offered by Berkeley Morgan Group Limited (BMG) and its subsidiary undertakings.

1) Employee benefits insurance and consultancy

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.

Insurance related income includes insurance and reinsurance brokerage commission. Insurance brokerage commission includes that derived from voluntary group income protection plan sales.

Non-insurance related income includes income derived from the sale of benefit books, consultancy services and property rental income.

Notes to the consolidated financial statements

2) Financial services

The financial services operating segment consists exclusively of revenue generated by BMG and its subsidiary undertakings. BMG was acquired by PGH in January 2005.Financial services revenue consists mainly of commission generated by financial advisers and commission generated from insurance underwriting agencies.

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

Notes to the consolidated financial statement

All income is derived from the UK.

The figures shown above for employee benefits and financial services are from the management accounts that are not prepared under IFRS. Unallocated amounts relate to the investment properties.

4 Taxation

Tax expense is recognised based on management's best estimate of the weighted-average annual income tax rate expected for the full financial year multiplied by the pre-tax income of the interim reporting period.

The Group's consolidated effective tax rate in respect of continuing operations for the six months ended 30 June 2014 was 25.9% (six months ended 30 June 2013: 25.3%).

The weighted average numbers of outstanding shares used for basic and diluted earnings per share are as follows:

During the first six months of 2014, Personal Group Holdings Plc paid dividends of £2,954,000 to its equity shareholders (six months to 30 June 2013: £2,796,000, twelve months to 31 December 2013: £5,592,000). This represents a payment of 9.8p per share (six months to 30 June 2013: 9.3p, twelve months to 31 December 2013: 18.6p).

In the statement of changes in equity and the cash flow statement dividends are stated net of amounts paid on treasury shares and unallocated shares held by Personal Group Trustees Limited as follows:

For the six months ended 30 June 2014

For the year ended 31 December 2013