Personal Group Regulatory News (PGH)

PERSONAL GROUP HOLDINGS PLC

("Personal Group" or "the Group")

ANNOUNCEMENT OF RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2013

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 2013.

* Underlying PBT is defined as profit before tax, before goodwill impairment on BMG, share-based payment expenses, and reorganisation costs.

** EBITDA is defined as earnings before interest, tax, depreciation, goodwill impairment on BMG, share-based payment expenses and reorganisation costs.

The Annual General Meeting will be held on 28 April 2014 at 1:00pm at John Ormond House, 899 Silbury Boulevard, Milton Keynes, MK9 3XL.

Mark Scanlon, Chief Executive of Personal Group, commented: "2013 was the second successive year in the implementation of our strategic plan, in which an emphasis was placed on delivering our major investment programme. As planned this impacted on our profit for the year, but the business is now set fair to increase its profit levels and to deliver against its potential, as it is now doing."

Chairman's Statement

I am pleased to report on a year which has seen the delivery both of our continuing investment programme to transform our business, and an underlying financial performance in line with our expectations.

Return to Shareholders

Based on the strength of Personal Group's underlying performance and the Board's confidence in its business model, strategy and prospects, the Board has recommended an increase in the dividend payable in 2014 by 5.4% to 19.6p (2013: 18.6p) per share. This means that the level of dividend will have increased by 10.1% in the past two years.

We have no plans to change our long established policy of paying dividends quarterly, and accordingly our first quarterly dividend for 2014 of 4.9p (2013: 4.65p) per share was paid on 25 March 2014.

A Strong Platform for Growth

2013 is the second successive year in which an emphasis has been placed on delivering our major investment plan. This is to create a platform for significant organic growth and to deliver a highly attractive and competitive offering to our customers supported by outstanding customer service. We now have a senior management team and a motivated workforce capable of developing and expanding our business to become indisputably the market's employee benefits provider of choice, and we are a highly efficient operation. Our key performance indicators, not least our 17.5% increase over 2012 in new business generation, and the quality of our pipeline of new business, are evidence of the benefits flowing from this investment.

The Current Operating Environment

We continue to experience strong demand for our products, both from host companies to whose employees we offer our products, and from the employees themselves. We will continue in 2014 to invest in technology to maximise the ease of access to, and use of, our employee benefits platform, and some further expenditure will be required to complete our senior management succession transition. At the same time, however, our focus is on starting to deliver the enhanced profits of which this business is capable.

We have for some time recognised that the relationships which we enjoy with our host companies and with our policyholders provide an opportunity to widen the suite of products which we offer them. Some work was carried out in 2013 to identify specific opportunities which might complement our own product range, and this work continues in 2014. We have a strong balance sheet with sizeable cash reserves and no debt. We are pleased to announce the acquisition of Lets Connect. They are an employee benefit specialist in Salary Sacrifice providing home technology and their proposition brings significant synergies with our own.

Conclusion

Our business now has a well-received set of core products and a platform for the delivery of sustainable growth. This is based on a reliable track record of performance, a focus on the excellence of our customer experience, an efficient operation, and trusted relationships with over 400 clients and over 200,000 policyholders. It is now therefore well-placed to begin to widen its activity range and to increase its profit levels. It is customary for the Chairman to pay tribute to a company's employees in his or her annual Chairman's statement. That I do so again this year is in recognition of the fact that the continuing success of Personal Group is attributable overwhelmingly to the efforts and enthusiasm of our employees - for which, on behalf of the Board, I thank them.

Chris Curling

Non-Executive Chairman

26 March 2014

Chief Executive's Business Overview

2013 has been a transitional year for Personal Group. A number of important initiatives which began in 2012 were completed this year and now put us in a strong position from which to grow our business. These include, amongst others, our senior management team, sales performance, service quality and further technology deployments.

Revenue has increased by some 4.5% with our core Employee Benefits revenue growing organically by 6.8%. This is very encouraging and in line with our targets. Our sales performance of £9.4m of new annualised premium (2012: £8.0m) has beaten all previous records by a considerable margin. Of course the benefit of this increase will be felt in the coming years as we expense most of the acquisition costs in the year in which the costs are incurred. One-off charges for goodwill adjustments in our Berkeley Morgan business (£2.1m) together with LTIP/Share Option provisioning (£1.5m) have affected our profit before tax of £3.7m (2012: £8.3m), though these are non-cash items. Reorganisation charges of £1.0m are also particular to 2013.

Very pleasingly we have introduced a number of large clients such as Network Rail, 2 Sisters and Young's Seafood through the year and secured a number of others, such as Four Seasons and Translink which will be rolled out in the course of 2014. In addition we renewed our relationship with Stagecoach on a long-term contract with a number of other transport businesses in the pipeline.

EBITDA was £8.8m (2012: £9.9m) reflecting higher investment in our field sales organisation and claims costs which were ahead of historic levels. Our Berkeley Morgan business continues to reduce as expected with a reduction in revenue to £0.6m (2012: £1.1.m). Our claims costs climbed to £5.8m (2012: £4.2m) largely as a consequence of our increased core Hospital Cash plan business. We handled 41,223 claims in 2013 (2012: 33,659). The fact that we were able to absorb so much of this movement is testimony to the levels of efficiencies we have been able to drive out within the year.

Service level KPIs have soared. We now pay c.85% of claims within 24 hours (2012: 55%) with c.70% on the same day. During the year our complaints levels plummeted down to 3 per 10,000 policyholders. A wholesale revision of how complaints are managed has led to this much improved performance level. As was the case in 2012 the Board continues to have conviction about the medium and long-term growth prospects for the Group. To that end we continue with our progressive dividend policy and we are proposing to increase the dividend payable in 2014 by 5.4% to 19.6p (2013: 18.6p) per share. This will then equate to a 10.1% increase in aggregate over the two years, bettering the 2.0% and 2.4% in 2011 and 2012 respectively. Our first quarterly dividend for 2014 of 4.9p (2013: 4.65p) per share was paid on 25 March.

Mark Scanlon

Chief Executive

26 March 2014

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 30 years ago with blue chip corporate clients across the UK.

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. Personal Group is committed to encouraging small behavioural changes in utilising the benefits packages available that can have a significant impact on the monthly financial situation of an employee.

The Group's approach to employee communications is fundamental to the success of its programmes, as the balance of face to face meetings and innovative use of technology is a key strength of the Group. In total Personal Group offers access to benefits to over 2.0 million employees and 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. 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.

Personal Group is headquartered in Milton Keynes, listed on AIM in 2000 and today employs over 165 people.

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

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2013

* 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.

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2013

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 2013

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2013

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013

Equity attributable to equity holders of Personal Group Holdings Plc

*All Employee Share Option Plan (AESOP)

**Long Term Incentive Plan (LTIP)

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

PERSONAL GROUP HOLDINGS PLC

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2013

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.

The figures shown above for employee benefits and financial services are from the group's management accounts that are not prepared under IFRS. Unallocated amounts relate to the group's investment property, including the impairment, but excluding the results for the equity-accounted investee.

2. Taxation comprises United Kingdom corporation tax of £1,697,000 (2012: £2,308,000), and deferred taxation credit of £65,000 (2012: £28,000).

3. The basic and diluted earnings per share are based on the profit for the financial year of £2,098,000 (2012: £6,024,000) and on 29,886,673 basic (2012: 29,865,746), 29,931,267 diluted (2012: 29,882,672) ordinary shares, the weighted average number of shares in issue during the year.

4. The total dividend paid in the year was £5,556,000 (2012: £5,312,000), which is equivalent to 18.6

pence (2012: 17.8 pence) per share.

This preliminary statement has been extracted from the 2013 audited financial statements that will be posted to shareholders in due course. The statutory accounts for each of the two years to 31 December 2012 and 31 December 2013 received audit reports, which were unqualified and did not contain statements under section 498 (2) or (3) of the Companies Act 2006. The 2012 accounts have been filed with the Registrar of Companies but the 2013 accounts are not yet filed.

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