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 results for the six months to 30 June 2013:

Highlights

Mark Scanlon, Chief Executive of Personal Group, commented:

"Profit in the six months to 30 June 2013 has, as expected, been impacted by the Group's continuing investment programme, which is now centred on increasing sales capacity, improving our technology offering to policyholders and driving further operational efficiencies. In consequence we have again generated record levels of new business, which should flow through into profit in later periods.

"The Group's pipeline of new business remains very strong, demonstrating the continuing attraction of our products and services both to employer companies, their employees and policyholders alike."

Enquiries:

Notes to editors:

Personal Group Holdings Plc (AIM: PGH) is a leading provider of employee benefits and financial services, working with blue chip corporates across the UK since the Group was established in 1984.

The Group's integrated benefits and insurance programmes offer employers a cost effective means of attracting, retaining and motivating employees. Personal Group's tailored employee benefits packages include insurance products such as hospital and convalescence plans, death benefit and income protection plans; lifestyle benefits such as holiday and retail discounts; flexible benefit programmes; and a range of tax efficient benefits such as childcare vouchers.

In total Personal Group offers access to benefits to over 1.2 million employees, and clients include 3663, Benfield Motor Group, Northumbrian Water Limited, Priory Group, Regatta, Road Chef, Spire Healthcare, TNT and Vinci Construction. Against a backdrop of the government's focus on increasing the responsibility of the individual in terms of lifestyle protection and insurance products, Personal Group enables the employer to put the structure in place for their employees to achieve this more easily.

The Group boasts considerable financial strength, with a track record of profitable organic growth since 1986, as well as a strong pipeline of new business. For the year to 31 December 2012 the Group reported revenue of over £27 million and underlying PBT of £9.4 million. With a strong balance sheet and a progressive dividend policy, Personal Group is focused on increasing the momentum in its sales activity and investing in the business to drive future growth.

Personal Group is headquartered in Milton Keynes, listed on AIM in 2000 and today employs over 175 people.

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

Chairman's Statement

Summary

The first half of 2013 has seen a step change in the level of new business generation from our core products - up 21% on the equivalent period last year - as we begin to see the benefits of the Group's investment programme. As expected there have been higher overheads associated with the planned investment programme and profit has also been impacted by higher claims levels experienced during the period. At the same time the Board is pleased to report that some marked efficiencies are already evident from the changes which we are making to the operational structure of the business.

Financial Performance

Group profit before tax and share-based payment expenses and goodwill impairment for the six months ended 30 June 2013 was £3.7m (2012: £4.9m). The reduction in profit is partly attributable to higher overheads as the investment programme continues ahead of the expected resulting upswing in revenue. The reduction also reflects a higher claims ratio in the period; although the Group's claims ratio has shown a strong consistency over many years, it has, as is the case with most other insurance products, seen certain periods of higher claims levels.

Annualised new business premiums from the Group's core employee benefits and insurance activities (namely our hospital cash, convalescence, death benefit and voluntary group income protection plans) reached £4.9m in the first half of 2013, some 21% ahead of the £4.1m achieved in the first half of 2012 - which was itself a record level at the time.

Total equity at 30 June 2013 was £26.9m (31 December 2012: £26.7m). This includes net cash balances (including bank deposits classified under IFRS as financial assets) of £16.1m (31 December 2012: £15.3m).

Business Review

The Group is starting to gain real benefit from the business investment described in our Annual Report for the year ended 31 December 2012. The strengthening of the business development and account management team has resulted in a number of significant new business wins, including Network Rail, one of the largest tender wins in the Company's history, Young's Seafood and Translink, as well as a strong pipeline of new and existing host company launches.

The now almost universal use of iPads in the "front-end" sales process is generating some material operational efficiencies and is enabling us to have closer contact with our policyholders. Further refinements to the process have been introduced in the first six months of 2013. We are continuing also to implement further improvements in the quality of our policyholder engagement: these changes have contributed to a significant reduction in the number of complaints received.

Personal Group's latest internal employee survey shows improvements in a number of key areas, following our reward and progression review last year. We have further strengthened the senior management team through the recruitment of Ashley Doody as Chief Information Officer in April 2013.

Dividends

The first three dividends of 2013, each of 4.65p per share, have been paid in April and June and on 25 September. The Directors expect that a fourth and final dividend for 2013 of the same amount will be paid in December. This would give a total for the year of 18.6p per share (2012: 17.8p per share), an increase of 4.5%.

The Board

As indicated in the Annual Report for 2012, Roger Green retired as a non-executive Director on 30 April 2013. We are delighted that Mark Winlow has joined the Group Board as a non-executive Director, subject to regulatory approval. Mark has 30 years' wide experience in the insurance industry, including as a Partner at Ernst and Young leading their insurance and investment management consulting practices, and as a senior executive and non-executive Director in a number of major insurance companies. He is currently non-executive Chairman of Ageas Insurance Limited and of Lloyd's broker RFIB, and he is a judge of the British Insurance awards.

Outlook

In my statement in the Annual Report for 2012 I stated that 2013 was intended to be a year of further investment for significant sales growth, which is expected to lead to enhanced profits in future years. The benefit of this investment is reflected in our increasing level of new business generation and by our pipeline of business for new as well as existing host companies, which is very strong. Nevertheless the Board anticipates that full year results are likely to be impacted by the ongoing investment programme and by the increase in claims.

Overlaying all this, however, is the high level of continuing interest in our products shown both by our existing clients and many new and potential customers across a wide range of sectors, which demonstrates that Personal Group is an exciting business with excellent prospects.

C J Curling

Non-Executive Chairman

27 September 2013

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated income statement

All operations are considered to be continuing.

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated statement of comprehensive income

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated balance sheet at 30 June 2013

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated balance sheet at 30 June 2013

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

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 2013

Consolidated statement of changes in equity for the year ended 31 December 2012

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated statement of changes in equity for the six months ended 30 June 2012

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

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 2012.

The financial information for the year ended 31 December 2012 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 2012 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 27 September 2013.

2 Accounting policies

These June 2013 interim consolidated financial statements of Personal Group Holdings Plc are for the six months ended 30 June 2013. 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 2012.

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 Group has adopted early the requirements of IFRS 10, Consolidated Financial Statements and IFRS 11, Joint Arrangements (mandatory for periods commencing on or after 1 January 2014). With the exception of the implementation of IFRS 10 and 11, the principal accounting policies have remained unchanged from the year ended 31 December 2012.

Application of IFRS 11 has resulted in a change in recognition of the Group's joint venture from proportionate consolidation to the equity method. Under the transitional provisions within the standard, the change has been retrospectively applied from 1 January 2012. The effect of this change on the financial information as at 1 January 2012 and 31 December 2012 is disclosed in note 10.

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.

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:

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 2013 was 25.3% (six months ended 30 June 2012: 31.0%). The change in effective tax rate was caused mainly by the impairment of non-financial assets in the prior period.

5 Earnings per share and dividends

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

During the first six months of 2013, Personal Group Holdings Plc paid dividends of £2,796,000 to its equity shareholders (six months to 30 June 2012: £2,676,000, twelve months to 31 December 2012: £5,352,000). This represents a payment of 9.3p per share (six months to 30 June 2012: 8.9p, twelve months to 31 December 2012: 17.8p).

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:

6 Property, plant and equipment

For the six months ended 30 June 2013

For the year ended 31 December 2012

For the six months ended 30 June 2012