Final Results

PERSONAL GROUP HOLDINGS PLC PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007 The board of directors of Personal Group Holdings Plc, providers of employee benefits, insurance and consultancy, are pleased to announce the group's results as follows: HIGHLIGHTS 2007 2006 % £m £m Headline EBITD * 9.4 10.1 - 7 Profit before tax 8.6 9.3 - 8 Revenue 26.4 27.5 - 4 2007 2006 % Pence Pence EBITD per share (basic) 30.9 33.6 - 8 Earnings per share (basic) 21.0 22.1 - 5 Dividends per share paid in year 12.0 11.1 + 8 * EBITD is defined as earnings before interest, tax and depreciation. ** The directors have declared a dividend of 3.3 pence per share payable on 27 June 2008 to shareholders on the register at the close of business on 13 June 2008. Shares will be marked ex-dividend on 11 June 2008. The AGM will be held on 29 April 2008. Ken Rooney, Chief Executive, commented: "During 2007 we launched 21 new benefit programmes, including schemes for Somerfields, the Intercontinental Hotel Group, Pirelli and The Belfry. 73 employers with more than 300,000 employees are now using our PERFLEX employee benefit software platform allowing access to both internet and intranet voluntary and employer paid benefit selections. This is a substantial increase on last year but those preferring to use their computers to select benefits still represent a minority within our customer base. The relocation of the Berkeley Morgan Ltd, Universal Provident and Rapidinsure operation from Blackburn to our Head Office in Milton Keynes proceeded smoothly and was completed before the end of 2007. 2008 has got off to a great start with all time record new business production in both January and February." CHAIRMAN'S STATEMENT BUSINESS REVIEW I am pleased to report that the group's financial result for 2007, which is now prepared under IFRS, demonstrated continuing strong performance and was in line with market expectations. Group profit before tax (PBT) decreased by £0.7m to £ 8.6m (2006: £9.3m) and earnings before interest, tax and depreciation (EBITD) decreased by £0.7m to £9.4m (2006: £10.1m). As I mentioned in my review last year our lower new business production in 2006 has had an impact on repeat premium volumes and profit in 2007. 2006 was a `bad year' for new business production but a `good year' for profits; conversely 2007 has been a `good year' for new business production but not such a `good year' for profits. Our policy of charging all our selling and related administration costs in the year they are incurred results in expenses exceeding the income those sales generate in the first year, these being fully recovered at some point in the second year. The effect of this policy is to eliminate what can become large `deferred acquisition costs' on the balance sheet, reduce the impact of a poor year for sales on profits and leave the value of the annual premium `bank' unimpaired. After provision for taxation, there was a surplus of £6.4m which was added to reserves. Equity stood at £26.7m (2006: £23.8m) on 31 December 2007, which is 87 pence (2006: 78 pence) per share. Our Personal Hospital Plan (PHP), Supplementary Sick Pay, Death Benefit (DB) and related policies have now accumulated a £12.9m annual premium `bank' of business that has been in force for more than two years and where all original sales costs have been recovered. Our PHP and DB new business production during 2007 was 37.6% ahead of 2006. What was particularly gratifying was that total sales costs rose by only 2.1%. When translated into new business acquisition cost ratios the comparatives show that the cost of enrolling £100 of new annual premium in 2007 was £82.50 compared with £114.50 in 2006, a 27.9% saving. This improved efficiency will help bring 2007 new business into profit earlier. In keeping with our commitment to treating our customers fairly enhancements were made to the terms and benefits provided by our PHP during 2007 at no extra cost to our policyholders. 25,992 (2006: 24,312) claims were processed, of which fewer than 1% were denied benefit, with the great majority paid in full by return of post. 2007 was the fifth year in succession when no policyholder had their benefit curtailed because their hospital stay exceeded the maximum period payable. No Personal Assurance Plc claims were referred to the Financial Ombudsman Service during the year. Our collaboration with Unum to market Voluntary Group Income Protection (VGIP) to our host employers got off to an encouraging start in April 2007. As expected this new approach to the provision of extended sick pay arrangements by employers, where the cost is borne only by those employees who wish to participate, is proving popular. We have launched six schemes to date and have experienced improved take up levels as we have identified areas for improvement and changes to the procedures and terms have been implemented. One of our most recent schemes resulted in a 40% enrolment level from 592 qualifying employees. I believe VGIP has the potential to grow into a major profit contributor to the group. During the financial year Berkeley Morgan Group (BMG) companies contributed £ 1.1m (2006: £1.3m) of PBT. This represented approximately 11.7% of the EBITD of the group and is after making full provision for the costs, amounting to £0.3m, directly related to the closure of the former BMG head office at Blackburn and moving all functions to John Ormond House in Milton Keynes. Our investment income, including realised and recycled unrealised gains and losses and related expenses, was marginally down from a net income of £0.9m in 2006 to a net income of £0.8m in 2007. At 31 December 2007 our government fixed interest securities and cash deposits amounted to £10.7m (2006: £12.5m). During 2007 we reduced our outstanding borrowings, which were taken out to help fund the acquisition of BMG in 2005, by a further £4.0m, reducing our outstanding debt to £2.0m. The group's joint venture with Abbeygate Developments Limited, of additional office space and residential units on the site adjacent to John Ormond House, is fully let and generated a gross income of £0.4m in 2007 (2006: £0.4m) of which 50% is receivable by the group. As stated in Personal Assurance Plc's annual return to the Financial Services Authority the capital resources requirement at 31 December 2007 was £2.9m (2006: £2.9m). Personal Assurance Plc's capital resources available to cover this requirement were £7.2m (2006: £7.6m). DIVIDENDS AND DIVIDEND POLICY The directors have decided to cease paying three dividends a year and move to the practice of paying four dividends a year as commonly used in the USA. We have taken this decision as we believe that this change in policy will prove beneficial to shareholders and that the company, which has enjoyed a transparent and steady history of profitability, is well positioned to take this step. The first of our new quarterly dividends will be 3.3 pence a share and will be payable in June 2008. Provided business continues as expected we anticipate paying the same amounts in September 2008, December 2008 and March 2009. Dividends paid in 2007 totalled 12 pence, an increase of 8.1% compared with 2006. The effect of the move to quarterly dividends is to make the probable dividend during 2008 a total of 16.5 pence per share. This will include the last of the larger second interim dividends that was paid in March. It is therefore unlikely that dividends in 2009 will equal those expected to be paid in 2008. THE BOARD I'm sad to report the death on 1 March 2008 of John Swarbrick, who served as our chairman from 1994 to 2003. John was the first non-executive director of Personal Assurance Plc appointed in December 1984 by our outside investors as their nominee. Starting as a monitor he quickly became a mentor. John was a first class `insurance' man who had spent most of his working life with Refuge Assurance Group and eventually retired as general manager (general insurance) so he knew the business we are in as well as anyone could. We could not have had a more capable and eloquent advocate with our investors and a more valuable adviser. It has now been five years since he left our board and we continue to miss him. Having served as a non-executive director of Personal Assurance Plc since 1993, and additionally of Personal Group Holdings Plc since it was formed in 1997, Sidney Donald will be retiring at the end of April 2008. On behalf of everyone at Personal Group who has had the pleasure of working with him, I wish him every happiness in his retirement. Sidney has always been a staunch supporter of our business and will be greatly missed. Subject to FSA approval the board anticipate appointing Harry Driver as non-executive director. Harry was at the Royal & Sun Alliance Insurance Group for over thirty-five years, where he held a wide range of roles including being a member of their UK board for two years. He is a non-executive director of Congregational & General Insurance Plc. PROSPECTS FOR 2008 Current trading is in line with directors' expectations. Our worksite team is larger than it has ever been and is performing well ahead of the same period last year. We anticipate their continued utilisation at optimum levels during the year. My thanks to all our policyholders, host employers, employees and associates for their contribution to our continuing success. Christopher W T Johnston Chairman 28 March 2008 Enquiries: Personal Group Holdings Plc Tel: 0207 367 8888 (on 31/3/08). Christopher Johnston, Chairman 01908 605000 ext 235 (thereafter) Ken Rooney, Chief Executive John Barber, Finance Director Bankside Consultants Simon Rothschild Tel: 0207 367 8871 Cenkos Securities plc Stephen Keys Tel: 020 7397 8926 CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 Note 2007 2006 £000 £000 Gross premiums written 16,007 15,933 Change in unearned premiums 31 20 ________ ________ Net premiums written 16,038 15,953 Other income: Insurance related 7,769 9,227 Non-insurance related 1,746 1,502 Investment income 848 867 ________ ________ Revenue 26,401 27,549 ________ ________ Claims incurred (3,080) (2,908) Insurance operating expenses (7,084) (7,328) Other expenses: Insurance related (5,495) (5,918) Non-insurance related (1,736) (1,585) Charitable donations (80) (80) ________ ________ Expenses (17,475) (17,819) ________ ________ Results of operating activities 8,926 9,730 Finance costs (355) (424) ________ ________ Profit before tax 8,571 9,306 Tax 1 (2,213) (2,626) ________ ________ Profit for the year 6,358 6,680 ________ ________ ________ ________ The profit for the period is attributable to equity holders of Personal Group Holdings Plc Earnings per share as arising from total and continuing operations Pence Pence Basic 2 21.0 22.1 Diluted 2 21.0 22.0 Included within other insurance related income is £nil (2006: £184,000), other insurance related expenses is £nil(2006: £140,000), and tax on profit on ordinary activities is £nil (2006: £12,000), all relating to a disposal in the prior year. All other operations are considered to be continuing. PERSONAL GROUP HOLDINGS PLC CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2007 2007 2006 £000 £000 ASSETS Non-current assets Goodwill 9,433 9,433 Property, plant and equipment 5,449 6,654 Investment property 2,091 2,073 Financial assets 6,075 6,238 ________ ________ 23,048 24,398 ________ ________ Current assets Trade and other receivables 3,570 4,035 Cash and cash equivalents 7,728 9,486 ________ ________ 11,298 13,521 ________ ________ Non-current assets classified as held for sale Property, plant and equipment 1,068 - ________ ________ ________ ________ Total assets 35,414 37,919 ________ ________ ________ ________ EQUITY Equity attributable to equity holders of Personal Group Holdings Plc Share capital 1,527 1,528 Shares to be issued - 298 Other reserves (570) (685) Treasury shares reserve - (298) Profit and loss reserve 25,752 22,957 ________ ________ Total equity 26,709 23,800 ________ ________ ________ ________ LIABILITIES Non-current liabilities Deferred tax liabilities 143 308 ________ ________ Current liabilities Provisions 345 256 Trade and other payables 5,020 5,915 Current tax liabilities 1,092 1,355 Borrowings 2,105 6,285 ________ ________ 8,562 13,811 ________ ________ ________ ________ Total liabilities 8,705 14,119 ________ ________ ________ ________ ________ ________ Total equity and liabilities 35,414 37,919 ________ ________ ________ ________ CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 2007 2006 £000 £000 Operating activities Profit after tax 6,358 6,680 Adjustments for Depreciation 439 416 Profit on disposal of property, plant and equipment (14) (19) Realised and unrealised net investment gains/(losses) 25 (221) Interest received (847) (716) Dividends received (18) (40) Interest paid 366 430 Share based payments 43 106 Loss on disposal of subsidiary undertaking - 30 Taxation expense recognised in income statement 2,213 2,626 Changes in working capital Trade and other receivables 464 317 Trade and other payables (793) (516) Taxes paid (2,641) (2,805) _______ _______ Net cash from operating activities 5,595 6,288 _______ _______ Investing activities Additions to property, plant and equipment (362) (364) Additions to investment property (18) - Proceeds from disposal of property plant and equipment 62 68 Purchase of own shares (415) (29) Proceeds from disposal of own shares 555 135 Purchase of treasury shares - (298) Disposal (net of cash) of subsidiary undertaking - (40) Purchase of financial assets (95) (230) Proceeds from disposal of financial assets 228 563 Interest received 847 716 Dividends received 18 40 _______ _______ Net cash gained in investing activities 820 561 _______ _______ Financing activities Proceeds from bank loans 415 29 Repayment of bank loans (4,595) (2,179) Interest paid (366) (430) Dividends paid (3,627) (3,347) _______ _______ Net cash used in financing activities (8,173) (5,927) _______ _______ Net change in cash and cash equivalents (1,758) 922 Cash and cash equivalents, beginning of year 9,486 8,564 ________ ________ Cash and cash equivalents, end of year 7,728 9,486 ________ ________ ________ ________ Notes 1. Taxation comprises United Kingdom corporation tax of £2,379,000 (2006: £2,688,000), and deferred taxation credit of £166,000 (2006: £62,000). 2. The basic and diluted earnings per share are based on the profit for the financial year of £6,358,000 (2006: £6,680,000) and on 30,260,729 basic (2006: 30,182,627), 30,297,146 diluted (2006: 30,400,618) ordinary shares, the weighted average number of shares in issue during the year. The EBITD per share are based on the earnings before interest, tax, depreciation for the financial year of £9,365,000 (2006: £10,146,000). 3. The directors have declared a dividend of 3.3 pence per share payable on 27 June 2008 to share holders on the register at the close of business on 13 June 2008. Shares will be marked ex-dividend on 11 June 2008. The total dividend paid in the year was £3,627,000 (2006: £3,347,000), which is equivalent to 12.0 pence (2006: 11.1 pence) per share. The preliminary statement which has been agreed with the auditors and approved by the Board on 28 March 2008 is not the Company's statutory accounts. The statutory accounts for each of the two years to 31 December 2006 and 31 December 2007 received audit reports, which were unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. The 2006 accounts have been filed with the Registrar of Companies but the 2007 accounts are not yet filed.

Companies

Personal Group Holdings (PGH)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today