Personal Group Regulatory News (PGH)

26 Sep 2005 06:00

26 September 2005 Enquiries: Personal Group Holdings Plc Tel: 0207 367 8888(on 26/9/05). Christopher Johnston, Chairman 01908 605000 ext 235 (thereafter) Ken Rooney, Managing Director John Barber, Finance Director Bankside Consultants Simon Rothschild Tel: 0207 367 8888 Personal Group Holdings Plc Interim statement for the six months to 30 June 2005 Personal Group Holdings Plc is one of the UK's leading providers of employeebenefits insurance and consultancy. - Trading income (excluding acquisition) ahead 10.3% at ‚£7.51m - Pre-tax profit (excluding acquisition and related expenses) ahead 14.9% at ‚£ 3.27m - Profit on ordinary activities before tax and before goodwill amortisation up by 35.8% at ‚£3.87m - Profit on ordinary activities before tax up by 17.7% at ‚£3.32m - The directors have today declared a first interim dividend of 2.2p per share (2004: 2.1p) payable on 24 October 2005 to shareholders on the register at the close of business on 7 October 2005. Shares will be marked ex-dividend on 5 October 2005. HIGHLIGHTS 2005 2004 % ‚£m ‚£m Trading income * 11.13 6.81 +63.4 Pre-tax profit ** 3.32 2.82 +17.7 Pre-tax profit before goodwill amortisation 3.87 2.85 +35.8 Earnings per share (basic) 7.2p 6.6p + 9.1 * Trading income comprises earned premiums net of claims, claimshandling and other income from the ongoing business representing commissionand fees earned on financial products and other related services. Other incomeincluded in the 2005 figure in respect of an acquisition totalled ‚£3,625,000. ** In 2005 pre-tax profit includes ‚£881,000 (before goodwill amortisationof ‚£518,000) relating to an acquisition in the period. Of this amount ‚£145,000relates to an unrealised gain in respect of a market value adjustment of aninvestment. After goodwill amortisation Berkeley Morgan Group Plc'scontribution to pre-tax profits totalled ‚£363,000. Ken Rooney, Chief Executive, commented:"The first half of 2005 has continued the momentum built in 2004. Excludingthe recent acquisition of Berkeley Morgan Group, trading income increased by10.3% to ‚£7.51m whilst pre-tax profit increased by 14.9% to ‚£3.27m.Fourteen new benefit programmes, together with six re-service programmes,provided the group with substantial opportunities to add to our core business. Our new benefit programme clients launched during the period includedNorthumbrian Water Limited, Thorntons, Corporate Services Group (Blue ArrowLtd), Danish Bacon Company PLC and Post Office Limited.Berkeley Morgan Group has performed steadily over the period continuing toshift its focus towards the provision of health and general insuranceservices. We have also been able to introduce worksite marketing opportunitiesto some of the financial advisers from Berkeley Morgan Group." CHAIRMAN'S STATEMENTThe first half of 2005 has lived up to my expectations with trading income(excluding the acquisition referred to below) from Personal Group's employeebenefits and insurance business increasing by approximately 10%. As reportedin the annual report for the year ended 31 December 2004, the acquisition ofBerkeley Morgan Group Plc (BMG) became unconditional in all respects on 11January 2005. The acquisition cost Personal Group ‚£12,947,000 in total,principally funded by way of a ‚£12,000,000 bank loan. BMG's principal activity is the provision of financial planning advice and thesupply and packaging of health and general insurance services. Marketconditions for the provision of financial planning advice remain extremelychallenging and BMG has continued with its planned move away from this area. For the six months ended 30 June 2005 approximately 40% of BMG's turnover camefrom this activity (30 June 2004: 48%). It is anticipated that BMG willcontinue to expand its health and general insurance services. The acquisitionof BMG brought with it their internet based insurance platformRapidinsure.co.uk. This business started generating profits at the end of lastyear and continues to perform well. Rapidinsure.co.uk is now being madeavailable to all our benefit programme customers and has been started to beused by other insurance and employee benefit providers.The acquisition in January resulted in additional trading income during thehalf year of ‚£3,625,000 and profits before taxation of ‚£881,000 making thetotal profit before taxation for the whole group ‚£3,866,000 before any goodwillamortisation and ‚£3,318,000 after goodwill amortisation (2004: ‚£2,849,000 and ‚£2,819,000) . Basic earnings per share were up 9.1% at 7.2p (2004: 6.6p).After provision for taxation there is a surplus for the period of ‚£2,177,000(2004: ‚£1,994,000) which has been added to reserves. Shareholders' funds at 30June 2005 were ‚£18,251,000 (60p per share) and include net cash balances ofapproximately ‚£7,044,000 in addition to ‚£3,000,000 of 4% Treasury Loan Stock2009 (market value ‚£2,996,000 on 30 June 2005).During the period net unrealised investment gains of ‚£147,000 (2004: losses ‚£32,000) have been recorded.In June we reduced our debt incurred on the purchase of Berkeley Morgan GroupPlc by ‚£2,000,000 to ‚£10,000,000.The joint venture property development adjacent to John Ormond House wascompleted in April 2005. All the apartments have been let and a businesstenant has signed a lease for the ground floor offices. The combined rentalincome generates a yield of approximately 5% and we continue to have access toadditional office space for our own use.Current trading is in line with directors' expectations. In view of the firsthalf results and the prospects for the future the directors have today declareda first interim dividend of 2.2p per share (2.1p in 2004) payable on 24 October2005 to shareholders on the register at the close of business on 7 October2005.The continuing success is wholly due to the enthusiasm, commitment andprofessionalism of the Personal team both here in Milton Keynes and inBlackburn. My thanks to everyone involved. Christopher W T Johnston, Chairman26 September 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the 6 months ended 30 June 2005 6 months ended 6 months ended 12 months ended 30 June 2005 30 June 2004 31 December 2004 Unaudited Unaudited Audited ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 TECHNICAL ACCOUNT - GENERAL BUSINESS Gross premiums 7,524 6,638 13,518written Change in the gross provision for unearned (47) (25) 46premiums Earned premiums, net of reinsurance 7,477 6,613 13,564 Claims paid Gross amount (1,472) (1,445) (2,850) Reinsurers' share - - - Net of (1,472) (1,445) (2,850) reinsurance Change in the provision for claims Gross amount (255) (166) (239) Reinsurers' share - - - Net of (255) (166) (239) reinsurance Claims incurred, net of reinsurance (1,727) (1,611) (3,089) Net operating expenses: Other (3,429) (2,875) (5,555) Balance on the technical account for general 2,321 2,127 4,920business CONSOLIDATED PROFIT AND LOSS ACCOUNT (CONTINUED)for the 6 months ended 30 June 2005 6 months ended 6 months ended 12 months ended 30 June 2005 30 June 2004 31 December 2004 Unaudited Unaudited Audited (Restated) (Restated) Note ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 NON-TECHNICAL ACCOUNT Balance on the general business technical account 2,321 2,127 4,920 Investment 442 312 681 income Unrealised gains/(losses) on investments 147 (32) 67 Investment (123) expenses and charges (28) (68) Net investment return 561 212 625 Interest payable (including arrangement fees) (319) - - Other income 5,375 1,812 3,703 Other charges (4,582) (1,298) (2,984) Charitable (38) (34) (85)donations Profit on ordinary activities before tax - Before 3,866 2,849 6,456goodwill amortisation - Goodwill amortisation (548) (30) (277) Total 3,318 2,819 6,179 Tax on profit on ordinary activities 1 (1,141) (825) (1,970) Profit for the period 2,177 1,994 4,209 Earnings per share Basic 2 7.2p 6.6p 14.0p Diluted 2 7.2p 6.6p 13.9p There are no recognised gains or losses for the period other than the profitfor the financial period.The amount relating to an acquisition in the period which is included withinOther income is ‚£3,625,000; within Other charges is ‚£2,926,000; withinInvestment income is ‚£37,000 and within Tax on profit on ordinary activities is‚£202,000. CONSOLIDATED BALANCE SHEET AT 30 JUNE 2005 At 30 June 2005 At 30 June At 31 December 2004 2004 Unaudited Unaudited Audited Note ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 Assets Intangible assets Goodwill 4 9,837 233 - Investments Investments in joint venture Share of gross assets 2,200 585 1,707 Share of gross liabilities (2,215) (585) (1,707) Net investment (15) - - Other financial investments 8,771 4,690 6,952 Debtors Debtors arising out of direct insurance operations 1,167 1,073 1,185 Other debtors due within one year 819 697 659 1,986 1,770 1,844 Other assets Tangible assets 6,720 5,846 5,654 Cash at bank and in hand 7,044 8,917 8,936 13,764 14,763 14,590 Prepayments and accrued income Accrued interest and rent 47 49 55 Deferred acquisition costs 19 34 19 Other prepayments and accrued income 1,743 103 149 1,809 186 223 Total assets 36,152 21,642 23,609 CONSOLIDATED BALANCE SHEET AT 30 JUNE 2005 (CONTINUED) At 30 June 2005 At 30 June 2004 At 31 December 2004 Unaudited Unaudited Audited (Restated) (Restated) Note ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 Liabilities Capital and reserves Called up share 1,528 1,528 1,528 capital Shares to be issued 277 228 247 Other reserve (753) (574) (558) Profit and loss 17,199 15,966 17,550 account Equity shareholders' 18,251 17,148 18,767funds 3 Technical provisions Provision for unearned premiums 273 297 226 Claims outstanding 1,359 1,028 1,105 1,632 1,325 1,331 Provision for other risks and charges 540 201 254 Creditors Current taxation 1,179 845 1,058 Other creditors including other taxation and social 867 504 474 security Bank loan 10,469 337 303 12,515 1,686 1,835 Accruals and deferred 3,214 1,282 1,422income Total liabilities 36,152 21,642 23,609 CONSOLIDATED CASH FLOW STATEMENTfor the 6 months ended 30 June 2005 6 months ended 6 months ended 12 months ended 30 June 2005 30 June 2004 31 December 2004 Unaudited Unaudited Audited ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 Net cash inflow from operating activities 4,557 3,699 7,318 Loan interest paid (including arrangement fees) (323) (17) (26) Taxation paid (1,248) (904) (1,783) Capital expenditure Purchase of fixed assets (124) (126) (218) Sale of fixed assets 46 68 256 Purchase of own shares (234) - (4) Sale of own shares 21 343 363 (291) 285 397 Acquisitions Acquisitions (net of cash acquired) (10,788) (30) (6) Equity dividends paid (2,528) (2,380) (3,023) Financing Additions to bank loans 12,234 - 4 Repayment of bank loans (2,068) (446) (484) 10,166 (446) (480) Net cash flows (455) 207 2,397 Cash flows were invested as follows: (Decrease)/increase in cash holdings (1,892) 2,675 2,686 Net portfolio investment Ordinary shares, loans, finance leases, treasury loan stock 1,437 (2,468) (289) Net investment of cash (455) 207 2,397flows PERSONAL GROUP HOLDINGS PLCNotes1. Taxation comprises United Kingdom corporation tax of ‚£1,141,000 (30 June2004: ‚£825,000, 31 December 2004: ‚£1,917,000), and deferred taxation charge of ‚£nil (30June 2004: nil, 31 December 2004: ‚£53,000).2. The calculations of basic and diluted earnings per share are based onthe following: 30 June 30 June 31 December 2005 2004 2004 Earnings - basic and diluted ‚£2,177,000 ‚£1,994,000 ‚£4,209,000 Weighted average number of shares Basic 30,219,190 30,029,221 30,120,002 Diluted 30,388,783 30,151,442 30,218,539 3. Reconciliation of movement in shareholders' funds. 30 June 30 June 31 December 2005 2004 2004 ‚£000 ‚£000 ‚£000 Profit for the period 2,177 1,994 4,209 Dividends paid in period (2,528) (2,380) (3,023) (351) (386) 1,186 Shares to be issued 30 228 247 Profit on allocation of AESOP 18 44 56shares Purchase of AESOP shares (234) - (4) Allocation of AESOP shares 21 343 363 (Decrease)/increase in shareholders' funds (516) 229 1,848 Shareholders' funds brought forward 18,767 16,919 16,919 Shareholders' funds carried forward 18,251 17,148 18,767 4. On 10 December 2004 the company made an offer to acquire the whole of theissued, and to be issued, share capital of Berkeley Morgan Group Plc for 105 pence in cash perBerkeley Morgan Group Plc share. The offer valued the whole of the issued share capital ofBerkeley Morgan Group Plc at approximately ‚£12.3 million. The offer became unconditional in allrespects on 11 January 2005 and the acquisition has been funded by way of a bank loan and the company'sown funds. The interim results, which have not been audited, have been prepared on the same basis and using the same accounting policies as those used in thepreparation of the full year's accounts to 31 December 2004, except for theapplication of FRS 21 with effect from 1 January 2005. Prior period resultshave been restated where necessary.The interim statement, which was approved by the Board on 23 September 2005, isnot the Company's statutory accounts. The statutory accounts for each of thetwo years to 31 December 2003 and 31 December 2004 received audit reports,which were unqualified and did not contain statements under section 237 (2) or(3) of the Companies Act 1985. The 2003 and 2004 accounts have been filed withthe Registrar of Companies.Financial calendar for the year ending 31 December 2005The Company announces the following dates in its financial calendar for theyear ending31 December 2005: - Payment of 1st interim dividend 24 October 2005 - Preliminary results for the year ending 31 December 2005 March 2006 - Publication of Report and Accounts for 2005 March 2006 - AGM April 2006 ENDPERSONAL GROUP HOLDINGS PLC