Personal Group Regulatory News (PGH)

PERSONAL GROUP HOLDINGS PLC

("Personal Group" or "the Group")

ANNOUNCEMENT OF RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2012

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 2012.

Highlights

* EBITDA is defined as earnings before interest, tax, depreciation, goodwill impairment and

share-based payment expenses, but excluding profit on disposal of a subsidiary undertaking.

** Underlying PBT is defined as profit before tax, goodwill impairment on BMG and share-based

payment expenses, but excluding profit on disposal of a subsidiary undertaking.

The Annual General Meeting will be held on 30 April 2013 at 1:00pm at John Ormond House,

899 Silbury Boulevard, Milton Keynes, MK9 3XL.

Mark Scanlon, Chief Executive of Personal Group, commented:

"2012 has been a year of change at Personal Group, which will continue into 2013 as we position the business for future growth. Our core business income grew by 8.1%. This contributed to our EBITDA performance of £9.9m being only slightly lower than 2011 (£10.2m) despite a programme of significant investment and change implemented in the course of the year. Total group revenue of £27.4m (2011: £27.5m) reflects our decision to stop accepting new financial services investment business into Berkeley Morgan Limited.

We have created significant momentum in our sales activity which has seen our sales performance in the 4th quarter outstrip our best ever 4th quarter performance by some 15%. This sales momentum has continued into 2013."

Enquiries:

Notes to editors:

Personal Group Holdings Plc (AIM: PGH) is a leading provider of employee benefits, employee related insurance products and financial services established in 1984 with clients across the UK.

The group primarily provides tailored employee benefits programmes to businesses throughout the UK. These programmes 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; a range of tax efficient benefits such as childcare vouchers and employee assistance programmes. The group generates the majority of its revenue through the underwriting of hospital and convalescence plans.

Through its expertise in producing, communicating and implementing successful benefit solutions, the group has helped over 400 leading UK companies recruit, retain and motivate the best people. In total the group provides access to benefits for 1.2 million employees, and clients include 3663, Bidvest, DHL, Spire Healthcare Northumbrian Water Limited, Pirelli, Starwood Hotels, TNT, UK Mail, Regatta, Road Chef and Vinci Construction.

The group boasts considerable financial strength, with a track record of profitable growth since 1986, as well as a strong pipeline of new business. For the year ended 31 December 2012 the group reported revenue of £27.4 million. With a strong balance sheet and a progressive dividend policy, Personal Group's vision is to be the provider of choice in employee benefits. The group's development to date has been achieved principally through strong organic growth.

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

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

Chairman's Statement

Business Review

For Personal Group 2012 has been a year both of continuing strong performance and of significant business transformation.

Our revenue from all our core employee benefits products reached £26m, an increase of 8.1% compared to 2011. We enjoyed another year of very strong new business generation in the core areas of Hospital Cash, Convalescence, Death Benefit and Voluntary Group Income Protection plans. New business generation in these areas came very close to that of our record year in 2011. Our core products continue to enjoy strong demand and to be well received.

The slight fall in total group revenue in comparison to 2011 was primarily a consequence of our decision to cease accepting new investment business into Berkeley Morgan Ltd (BML) with effect from 1st April 2012.

Our underwriting subsidiary Personal Assurance Plc handled 33,659 claims during the year for our core product plans (2011: 30,648 claims). The gross claims ratio for our core products was slightly down in comparison with 2011 but remains in line with levels experienced in previous years.

Investment for Growth

As foreshadowed in my chairman's statement accompanying the 2011 financial statements, we have embarked on a period of investment to transform our business, under the direction of Mark Scanlon, Chief Executive, who joined Personal Group in November 2011. This has already resulted in significant change.

Strengthening of the Senior Management Team

We have made further appointments into the senior management team, which both provide senior management succession and deliver the skills necessary for the further growth and development of the business. Mark Scanlon and Commercial Director David Walker (whose appointment was referred to in the Interim Statement in September) have been joined by Mike Dugdale as Chief Financial Officer, whose appointment was announced in December. This is a team of able and energetic people, well capable of developing the considerable potential of the Personal Group business and highly motivated to that end.

New Business Development

In the area of new business development we have considerably strengthened and restructured our business development and account management team. This team identifies and develops our relationships with host companies to whom we provide benefit programmes which include our core products. Under the direction of David Walker we now have a team focused on seeking new business opportunities as well as two dedicated to managing existing host company relationships. In consequence we have both strengthened our client relationship management and are better geared to identifying and developing new host company prospects.

TechnologyThe "front-end" sales process has been transformed through the use of an iPad application in the benefits presentations by our sales teams to host company employees. The iPad allows a more professional presentation, a slightly shorter presentation time (so that more presentations can be carried out in a day) and a more efficient signing-up procedure, as this is now done entirely online. Early indications also suggest a slightly higher conversion rate for employees purchasing our core product plans. The use of the iPad also gives the group a stream of valuable management information in real time: this is enabling us to manage more effectively the efficiency of our sales teams.

The Customer Experience

We want our customers to have the most positive experience when they are in contact with us: friendly, business-like and efficient. The quality of customer engagement is a fundamental element in market differentiation: an excellent experience enhances our reputation, strengthens our brand and leads to more sales. Following an in-depth external review of our customer (i.e. policyholder) experience we have significantly restructured and brought together all our direct customer-facing areas under the overall control of a newly appointed senior member of the management team. The benefits of this are already showing through, for example in a much reduced level of complaints and in a greater understanding of why customers terminate their policies. This should help in reducing levels of cancellation.

Employee Pay, Reward and Progression

In order to be able to attract and retain the most able people, we have conducted a thorough review of our pay, rewards and progression/career development arrangements. Outputs from this review include a single grading and pay spine for all employees, clearer benchmarks for the achievement of career progression, and a long-term incentive plan for our most senior executive directors based on the increase in market capitalisation of the group over five years - thereby aligning the interests of our senior people very closely with those of shareholders.

Profit

These major changes give us a significantly enhanced competitive advantage and efficiency, and put the group into good shape to enable it to drive up business volume growth from 2013. Inevitably however the resulting investment has impacted on profit: EBITDA for the year ended 31 December 2012 was £9.9m (2011: £10.2m). This reduction in 2012 is primarily attributable to the investments in the change programme which was described earlier in this statement. Profit before tax of £8.3m (2011: £10.0m) and earnings per share of 20.2p (2011: 24.8p) were further affected by the Berkeley Morgan Group Ltd goodwill impairment (£0.8m) announced in the interim statement in September, and by the long term incentive plan (£0.3m)

Balance Sheet

The group balance sheet remains strong with equity of £26.7m at 31 December 2012 (2011: £25.7m) representing 88.8p (2011: 85.3p) per share.

The margin of solvency (which allows Personal Assurance Plc to write further significant increases in premium without the requirement for new capital) remains strong: available qualifying assets at 31 December 2012 were £9.3m.

Dividends and Dividend Policy

Notwithstanding the lower profit performance in 2012 the directors' confidence in the medium and long-term prospects for Personal Group remains high. In consequence we are proposing to increase the dividend payable in 2013 by 4.5%, to 18.6p (2012: 17.8p) per share. This compares with an increase in dividends in each of the previous three years of between 2.0% and 2.4%. Our first quarterly dividend for 2013 of 4.65p (2012: 4.45p) per share will be paid on 8 April 2013.

The Board

Our founder and continuing major shareholder, Christopher Johnston, stepped down from the board in December, bringing to an end his active involvement in the business which he founded 29 years ago. He continues however through his reputation and example to inspire the staff of Personal Group, both those who joined the group and worked with him when he was involved in an executive capacity, and those who have become employees more recently. Christopher remains keenly interested in the business and a close and important friend of Personal Group.

Roger Green will also retire as a non-executive director at the AGM on 30th April 2013 after ten years on the board. Throughout this time he has been chairman of the Audit Committee and a member of the Remuneration Committee and, since its establishment, of the Compliance and Risk Committee. Roger's financial and industrial experience and expertise, together with his measured judgment, have been invaluable.

We are currently recruiting two new members of the board as independent non-executive directors.

Prospects for 2013

The improvements to the business which were put in place in the course of 2012 represent the preparation for the growth in business volumes which we are now beginning to witness. Our accounting policy for acquisition costs (i.e. the sales and other costs of generating new business), whereby the vast majority of all such costs are expensed in the year in which they are incurred has the consequence that a significant increase in sales activity causes profits to dip in the year in which those sales take place, with the benefit flowing through in later years. 2013 is therefore planned as a year of further investment for significant sales growth, which is expected to lead to enhanced profits in future years.

Business change at the levels which the group has experienced in 2012 can be uncomfortable for staff involved in the change. The staff of Personal Group have shown both resilience in the implementation of the change programme and high enthusiasm as they have begun to see the impact of the changes on the business. My fellow directors and I therefore wish particularly to place on record this year our thanks to all our employees. We also thank our host companies and policyholders for their continuing loyalty and for their acknowledgment of the excellence of our products and service.

C J Curling

Non-Executive Chairman

22nd March 2013

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2012

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2012

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 2012

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2012

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2012

Equity attributable to equity holders of Personal Group Holdings Plc

*All Employee Share Option Plan (AESOP)

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2011

Equity attributable to equity holders of Personal Group Holdings Plc

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2012

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 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.

2. Profit on disposal of subsidiary undertaking comprises sale proceeds £400,000, less legal and professional fees £50,000, and carrying value of goodwill eliminated on disposal £100,000.

3. Taxation comprises United Kingdom corporation tax of £2,321,000 (2011: £2,605,000), and deferred taxation credit of £25,000 (2011: £13,000).

4. The basic and diluted earnings per share are based on the profit for the financial year of £6,024,000 (2011: £7,423,000) and on 29,865,746 basic (2011: 29,871,611), 29,882,672 diluted (2011: 29,876,181) ordinary shares, the weighted average number of shares in issue during the year. The EBITDA per share are based on the earnings before interest, tax, depreciation, goodwill impairment and share-based payment expenses, but excluding profit on disposal of a subsidiary undertaking for the financial year of £9,922,000 (2011: £10,232,000).

5. The total dividend paid in the year was £5,312,000 (2011: £5,194,000), which is equivalent to 17.8 pence (2011: 17.4 pence) per share.

This preliminary statement has been extracted from the 2012 audited financial statements that will be posted to shareholders in due course. The statutory accounts for each of the two years to 31 December 2011 and 31 December 2012 received audit reports, which were unqualified and did not contain statements under section 498 (2) or (3) of the Companies Act 2006. The 2011 accounts have been filed with the Registrar of Companies but the 2012 accounts are not yet filed.

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