Last checked at 22 Mar 2010 07:00
PERSONAL GROUP HOLDINGS PLC PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2009
The board of directors of Personal Group Holdings Plc, providers of employee benefits, insurance, consultancy and financial services, are pleased to announce the group's results as follows:
* Gross premiums written up 7.3% to £17.6m (2008: £16.4m) * Revenue steady at £26.4m (2008: £26.8m) * Profit before tax up 5.8% to £5.5m (2008: £5.2m) * EPS up 20.7% to 11.1p per share (2008: 9.2p) * New business written in core business at record levels for the second successive year. * Berkeley Morgan impacted by economic downturn: goodwill reduced in the
consolidated balance sheet by a further £3.0m leaving a carrying amount of
£3.0m for Berkeley Morgan.
The AGM will be held on 27 April 2010.
Nigel Brittle, Group Chief Executive, commented:
2009 was a year of continuing strong performance for the group despite the economic downturn.
26 new benefit programmes were launched during the year, underpinning a secondsuccessive year of record new business production, which augurs well for ourfuture profitability. Our hospital plan and death benefit products continue tobe valued both by our host companies and their employees, whilst our newVoluntary Group Income Protection plan is making positive progress and winningincreasing customer confidence.Our customers continue to emphasise the importance of communication, engagementand involvement for their staff in voluntary employee benefit programmes. Theface to face service that Personal Group delivers in the workplace continues toachieve levels of participation that more remote product or service offeringsstruggle to replicate.Enquiries:Personal Group Holdings Plc Tel: 0207 367 8888 (on 22/3/09)Nigel Brittle 01908 605000 (thereafter)Ken RooneyJohn BarberBankside ConsultantsSimon Rothschild Tel: 0207 367 8871Cenkos Securities plcStephen Keys Tel: 020 7397 8926Chairman's statementINTRODUCTIONI must start my first statement as your group's new chairman by paying tributeto my predecessor Christopher Johnston. Christopher founded Personal AssurancePlc (PA) 25 years ago and under his exceptional stewardship the business hasdeveloped and prospered. His close association with, and commitment to, thegroup continues and he has become a non-executive director of the company andremains as the major shareholder.
BUSINESS REVIEW
Despite the harsh economic climate the group has performed strongly in 2009.The group's profit before tax and goodwill impairment reduced slightly in 2009to £8.5m (2008: £8.7m). After providing for goodwill impairment of £3.0m,profit before tax (PBT) increased to £5.5m (2008: £5.2m), a rise of 6%. Groupprofit before interest, tax, depreciation and goodwill impairment was £9.0m(2008: £9.2m).In particular and for the second successive year, new business written in thegroup's core business was a record, showing an increase of almost 5% on 2008.Gross premiums written were more than 7% up on the previous year, again at arecord level. At 31 December 2009 the total number of PA policies in force was221,792 (2008: 221,314) with a total annualised premium value of £18.8m (2008:£17.8m).Changes as part of an upgrade of our Personal Hospital Plan, demonstrating ourcommitment to treating customers fairly, were responsible for a slight increasein our claims ratio in the year. The group experienced no material impact fromswine flu and only 33 claims were attributed to this. During the year the grouphandled 34,585 (2008: 29,698) claims. No PA claims were referred to theFinancial Ombudsman Service during the year.Voluntary Group Income Protection (VGIP) commission increased strongly, albeitfrom a low base, in 2009. This product has encouragingly high take-up levels inworkplaces where it is being offered. While the growth of host company VGIPprogrammes has been slower than anticipated in 2009, efforts are focused onexpanding the number of programmes launched during 2010, in order to achievethe breakthrough in sales volumes of which we are confident the product iscapable. In addition to our continuing strong relationship with Unum Providentin respect of VGIP, we are delighted to have launched an additional version ofVGIP in partnership with BUPA at the end of 2009.The group's underwriting subsidiary, PA, continues to maintain high levels ofavailable qualifying assets, providing a margin of solvency which allows it towrite further significant increases in premium income without the requirementfor new capital. As at 31 December 2009 available qualifying assets were £7.8m(2008: £7.8m) to cover a capital resources requirement at that date of £3.2m(2008: £3.0m). PA continues to maintain high liquidity with over 59% of itstotal assets held as cash deposits.The economic downturn impacted on BMG which made a PBT of £0.9m (2008: £1.4m).Part of this reduction in PBT resulted from a shortfall of £0.1m in BMG'sinvestment income in comparison with 2008. An impairment review has beenundertaken and the conclusion reached that the BMG goodwill should be reducedin the group balance sheet by a further £3.0m, leaving a carrying amount of £3.0m. Given the operating climate the core IFA team in BMG performed creditablyin 2009.Group investment income was adversely affected by the continuing low level ofinterest rates. Net investment income reduced to £0.2m from £0.5m in 2008. Oursmall equity portfolio increased in value by £0.1m during the year.
DIVIDENDS AND DIVIDEND POLICY
The significantly increased (by 37.5%) dividend payments in 2008 weremarginally enhanced in 2009, and provided business continues as anticipated weexpect to pay in aggregate slightly higher dividends in 2010. As alreadyannounced, our cash resources have enabled us to increase our first dividendfor 2010 to 8.5p per share, which was paid today. The board currently expectsthat, subject to satisfactory trading conditions and in the absence of anyunforeseen circumstances, further dividends in 2010 will be paid in Septemberand December, each at 4.25p per share.
THE BOARD
As stated in last year's chairman's statement Christopher Johnston substantially reduced his involvement in the day to day management of the group and relinquished his role as chairman in November 2009. He continues as a non-executive director.
As anticipated in last year's chairman's statement Nigel Brittle formally took over the role as group chief executive following the AGM in April 2009.
PROSPECTS FOR 2010
The group has performed strongly in the economic downturn, with excellent new business volumes and a continuing strong balance sheet. Current trading continues to be in line with the directors' expectations.
My own association with Personal Group Holdings Plc goes back seven years,during which time I have been a non-executive director of the company. I amwell aware of the strong support and loyalty which the group enjoys from manyhost companies, policyholders, employees and associates. My thanks to you allfor your contribution to the group's continuing success.Chris CurlingChairman19 March 2010
PERSONAL GROUP HOLDINGS PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2009
Note 2009 2008 £'000 £'000 Gross premiums written 17,550 16,379 Change in unearned premiums 61 82 _______ _______ Net premiums written 1 17,611 16,461 Other income: Insurance related 1 6,814 8,006 Non-insurance related 1 1,454 1,572 Investment property 1 287 234 Investment income 238 508 _______ _______ Revenue 26,404 26,781 _______ _______ Claims incurred (3,844) (3,448) Insurance operating expenses (7,831) (7,235) Impairment of non-financial (3,000) (3,433)assets Other expenses: Insurance related (4,318) (5,444) Non-insurance related (1,679) (1,578) Investment property (111) (211) Charitable donations (80) (80) _______ _______ Expenses (20,863) (21,429) _______ _______ Results of operating activities 5,541 5,352 Finance costs (20) (125) _______ _______ Profit before tax 5,521 5,227 Tax 2 (2,202) (2,456) _______ _______ Profit for the year 3,319 2,771 ======= =======
The profit for the year is attributable to equity holders of Personal Group
Holdings Plc. Earnings per share as arising Pence Pence from total and continuing operations Basic 3 11.1 9.2 Diluted 3 11.1 9.1
All operations are considered to be continuing.
PERSONAL GROUP HOLDINGS PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2009
2009 2008 £'000 £'000 Profit for the year 3,319 2,771 Other comprehensive income
Available for sale financial assets: Valuation changes taken to equity 107 (193) Transfer to income statement 36 4
Income tax on unrealised valuation changes taken to (40)
54equity _______ _______ Total comprehensive income for the year 3,422 2,636 ======= =======
The total comprehensive income for the year is attributable to equity holders of Personal Group Holdings Plc.
PERSONAL GROUP HOLDINGS PLC
CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2009
2009 2008 £'000 £'000 ASSETS Non-current assets 3,000 6,000 Goodwill Property, plant and equipment 5,421 5,556 Investment properties 3,185 3,159 Financial assets 5,702 5,620 _______ _______ 17,308 20,335 _______ _______ Current assets 2,688 3,234 Trade and other receivables Cash and cash equivalents 7,300 7,478 _______ _______ 9,988 10,712 _______ _______ Total assets 27,296 31,047 ======= ======= PERSONAL GROUP HOLDINGS PLC
CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2009
2009 2008 £'000 £'000 EQUITY
Equity attributable to equity
holders
of Personal Group Holdings Plc
Share capital 1,503 1,503 Capital redemption reserve 24 24
Amounts recognised directly into
equity relating to non-current assets (15) (118)held for sale Other reserve (714) (772) Profit and loss reserve 20,940 22,522 _______ _______ Total equity 21,738 23,159 ======= ======= LIABILITIES Non-current liabilities Deferred tax liabilities 189 226 _______ _______ Current liabilities Provisions 120 135 Trade and other payables 3,825 4,265 Current tax liabilities 1,258 994 Borrowings 166 2,268 _______ _______ 5,369 7,662 _______ _______ _______ _______ Total liabilities 5,558 7,888 ======= ======= _______ _______ Total equity and liabilities 27,296 31,047 ======= ======= PERSONAL GROUP HOLDINGS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2009
Equity attributable to equity holders of Personal Group Holdings Plc
Share Capital Non-current Other Profit Total capital assets held reserve & loss equity redemption for sale account reserve £'000 £'000 £'000 £'000 £'000 £'000 Balance as at 1 January 1,503 24 (118) (772) 22,522 23,1592009 ______ ______ ______ ______ ______ ______ Dividends - - - - (4,948) (4,948) Employee share-based - - - - 46 46compensation Proceeds of AESOP share - - - - 81 81sales Cost of AESOP shares - - - 80 (80) -sold Cost of AESOP shares - - - (22) - (22)purchased ______ ______ ______ ______ ______ ______ Transactions with - - - 58 (4,901) (4,843)owners ______ ______ ______ ______ ______ ______ Profit for the year - - - - 3,319 3,319 Other comprehensive income Available for sale financial assets: Current year profits - - 107 - - 107 Transfer to income - - 36 - - 36statement Current tax on - - (40) - - (40)unrealised valuation changes taken to equity ______ ______ ______ ______ ______ ______ Total comprehensive income - - 103 - 3,319 3,422for the year ______ ______ ______ ______ ______ ______ Balance as at 31 1,503 24 (15) (714) 20,940 21,738December 2009 ====== ====== ====== ====== ====== ====== PERSONAL GROUP HOLDINGS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2008
Equity attributable to equity holders of Personal Group Holdings Plc
Share Capital Non-current Other Profit Total capital assets held reserve & loss equity redemption for sale account reserve £'000 £'000 £'000 £'000 £'000 £'000 Balance as at 1 January 1,527 - 17 (587) 25,752 26,7092008 ______ ______ ______ ______ ______ ______ Dividends - - - - (4,993) (4,993) Employee share-based - - - - 45 45compensation Buy back and (24) 24 - - (1,028) (1,028)cancellation of shares Proceeds of AESOP share - - - - 177 177sales Cost of AESOP shares - - - 202 (202) -sold Cost of AESOP shares - - - (387) - (387)purchased ______ ______ ______ ______ ______ ______ Transactions with (24) 24 - (185) (6,001) (6,186)owners ______ ______ ______ ______ ______ ______ Profit for the year - - - - 2,771 2,771 Other comprehensive income Available for sale financial assets: Current year losses - - (193) - - (193) Transfer to income - - 4 - - 4statement Current tax on - - 54 - - 54unrealised valuation changes taken to equity ______ ______ ______ ______ ______ ______ Total comprehensive income - - (135) - 2,771 2,636for the year ______ ______ ______ ______ ______ ______ Balance as at 31 1,503 24 (118) (772) 22,522 23,159December 2008 ====== ====== ====== ====== ====== ====== PERSONAL GROUP HOLDINGS PLCCONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2009 2009 2008 £'000 £'000 Operating activities Profit after tax 3,319 2,771 Adjustments for 474 452 Depreciation Goodwill impairment 3,000 3,433
Profit on disposal of property, plant (7)
(5)and equipment
Realised and unrealised net investment 61
275losses Interest received (377) (705) Dividends received (16) (37) Interest paid 25 136 Share-based payments 46 45 Taxation expense recognised in income 2,202 2,456statement Changes in working capital Trade and other receivables 541 331 Trade and other payables (455) (970) Taxes paid (2,015) (2,417) ______ ______ Net cash from operating activities 6,798 5,765 ______ ______ Investing activities Additions to property, plant and (398) (575)equipment
Additions to investment properties (26)
-
Proceeds from disposal of property plant and 71
30equipment Purchase of own shares by the AESOP (22)
(387)
Proceeds from disposal of own shares 81
177by the AESOP Purchase of own shares for - (1,028)cancellation Purchase of financial assets (3,119)
(103)
Proceeds from disposal of financial 3,119
95assets Interest received 377 705 Dividends received 16 37 ______ ______ Net cash realised from/(used in) 99 (1,049)investing activities ______ ______ Financing activities Proceeds from bank loans 22 387 Repayment of bank loans (2,124) (224) Interest paid (25) (136) Dividends paid (4,948) (4,993) ______ ______ Net cash used in financing activities (7,075) (4,966) ______ ______ Net change in cash and cash (178) (250)equivalents Cash and cash equivalents, beginning 7,478 7,728of year ______ ______ Cash and cash equivalents, end of year 7,300 7,478 ====== ====== Notes
1. 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 an FSA regulatedgeneral insurance company and is authorised to transact accident and sicknessinsurance. It was established in 1984 and has been underwriting business since1985. In 1997 Personal Group Holdings Plc (PGH) was created and became theultimate 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.
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:
Employee Financial Unallocated FRS Group services adjustments benefits £'000 £'000 £'000 £'000 £'000 Operating segments 2009 Revenue Net premiums 17,611 - - - 17,611written Other income: Insurance related 2,522 4,292 - - 6,814 Non-insurance 1,454 - - - 1,454related Investment - - 287 - 287property Investment income 232 6 - - 238 _______ _______ _______ _______ _______ Total revenue 21,819 4,298 287 - 26,404 ======= ======= ======= ======= ======= Net result for 7,538 818 175 (3,010) 5,521year before tax ======= ======= ======= ======= ======= Segment assets 18,596 2,515 3,185 3,000 27,296 ======= ======= ======= ======= ======= Segment 4,152 1,379 27 - 5,558liabilities ======= ======= ======= ======= ======= 2008 Revenue Net premiums 16,461 - - - 16,461written Other income: Insurance related 2,173 5,833 - - 8,006 Non-insurance 1,572 - - - 1,572related Investment - - 234 - 234property Investment income 407 101 - - 508 _______ _______ _______ _______ _______ Total revenue 20,613 5,934 234 - 26,781 ======= ======= ======= ======= ======= Net result for 7,357 1,289 23 (3,442) 5,227year before tax ======= ======= ======= ======= ======= Segment assets 18,719 3,169 3,159 6,000 31,047 ======= ======= ======= ======= ======= Segment 6,247 1,631 10 - 7,888liabilities ======= ======= ======= ======= =======
All income is derived from the UK.
2. Taxation comprises United Kingdom corporation tax of £2,249,000 (2008: £2,366,000), and deferred taxation credit of £47,000 (2008: £90,000 charge).
3. The basic and diluted earnings per share are based on the profit for thefinancial year of £3,319,000 (2008: £2,771,000) and on 29,830,021 basic (2008:30,268,462), 29,845,832 diluted (2008: 30,286,410) ordinary shares, theweighted average number of shares in issue during the year. The EBITDA pershare are based on the earnings before interest, tax, depreciation and goodwillimpairment for the financial year of £9,015,000 (2008: £9,237,000).
4. The total dividend paid in the year was £4,948,000 (2008: £4,993,000), which is equivalent to 16.6 pence (2008: 16.5 pence) per share.
This preliminary statement has been extracted from the 2009 audited financialstatements that will be posted to shareholders in due course. The statutoryaccounts for each of the two years to 31 December 2009 and 31 December 2008received audit reports, which were unqualified and did not contain statementsunder section 498 (2) or (3) of the Companies Act 2006 or section 237 (2) or(3) of the Companies Act 1985. The 2008 accounts have been filed with theRegistrar of Companies but the 2009 accounts are not yet filed.
Personal Group Holdings Plc - Annual Report - for the year ended 31 December 2008
vendor