Interim Results
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 employee
benefits 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, claims
handling and other income from the ongoing business representing commission
and fees earned on financial products and other related services. Other income
included in the 2005 figure in respect of an acquisition totalled £3,625,000.
** In 2005 pre-tax profit includes £881,000 (before goodwill amortisation
of £518,000) relating to an acquisition in the period. Of this amount £145,000
relates to an unrealised gain in respect of a market value adjustment of an
investment. After goodwill amortisation Berkeley Morgan Group Plc's
contribution to pre-tax profits totalled £363,000.
Ken Rooney, Chief Executive, commented:
'The first half of 2005 has continued the momentum built in 2004. Excluding
the recent acquisition of Berkeley Morgan Group, trading income increased by
10.3% 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 included
Northumbrian Water Limited, Thorntons, Corporate Services Group (Blue Arrow
Ltd), Danish Bacon Company PLC and Post Office Limited.
Berkeley Morgan Group has performed steadily over the period continuing to
shift its focus towards the provision of health and general insurance
services. We have also been able to introduce worksite marketing opportunities
to some of the financial advisers from Berkeley Morgan Group.'
CHAIRMAN'S STATEMENT
The first half of 2005 has lived up to my expectations with trading income
(excluding the acquisition referred to below) from Personal Group's employee
benefits and insurance business increasing by approximately 10%. As reported
in the annual report for the year ended 31 December 2004, the acquisition of
Berkeley Morgan Group Plc (BMG) became unconditional in all respects on 11
January 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 the
supply and packaging of health and general insurance services. Market
conditions for the provision of financial planning advice remain extremely
challenging 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 came
from this activity (30 June 2004: 48%). It is anticipated that BMG will
continue to expand its health and general insurance services. The acquisition
of BMG brought with it their internet based insurance platform
Rapidinsure.co.uk. This business started generating profits at the end of last
year and continues to perform well. Rapidinsure.co.uk is now being made
available to all our benefit programme customers and has been started to be
used by other insurance and employee benefit providers.
The acquisition in January resulted in additional trading income during the
half year of £3,625,000 and profits before taxation of £881,000 making the
total profit before taxation for the whole group £3,866,000 before any goodwill
amortisation 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 30
June 2005 were £18,251,000 (60p per share) and include net cash balances of
approximately £7,044,000 in addition to £3,000,000 of 4% Treasury Loan Stock
2009 (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 Group
Plc by £2,000,000 to £10,000,000.
The joint venture property development adjacent to John Ormond House was
completed in April 2005. All the apartments have been let and a business
tenant has signed a lease for the ground floor offices. The combined rental
income generates a yield of approximately 5% and we continue to have access to
additional office space for our own use.
Current trading is in line with directors' expectations. In view of the first
half results and the prospects for the future the directors have today declared
a first interim dividend of 2.2p per share (2.1p in 2004) payable on 24 October
2005 to shareholders on the register at the close of business on 7 October
2005.
The continuing success is wholly due to the enthusiasm, commitment and
professionalism of the Personal team both here in Milton Keynes and in
Blackburn. My thanks to everyone involved.
Christopher W T Johnston, Chairman
26 September 2005
CONSOLIDATED PROFIT AND LOSS ACCOUNT
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
£000 £000 £000 £000 £000 £000
TECHNICAL ACCOUNT
- GENERAL
BUSINESS
Gross premiums 7,524 6,638 13,518
written
Change in the
gross provision
for unearned (47) (25) 46
premiums
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 4,920
business
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 6,456
goodwill
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 profit
for the financial period.
The amount relating to an acquisition in the period which is included within
Other income is £3,625,000; within Other charges is £2,926,000; within
Investment 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 18,767
funds 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 1,422
income
Total liabilities 36,152 21,642 23,609
CONSOLIDATED CASH FLOW STATEMENT
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
£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 2,397
flows
PERSONAL GROUP HOLDINGS PLC
Notes
1. Taxation comprises United Kingdom corporation tax of £1,141,000 (30 June
2004: £825,000, 31 December 2004: £1,917,000), and deferred taxation charge of £nil (30
June 2004: nil, 31 December 2004: £53,000).
2. The calculations of basic and diluted earnings per share are based on
the 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 56
shares
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 the
issued, and to be issued, share capital of Berkeley Morgan Group Plc for 105 pence in cash per
Berkeley Morgan Group Plc share. The offer valued the whole of the issued share capital of
Berkeley Morgan Group Plc at approximately £12.3 million. The offer became unconditional in all
respects on 11 January 2005 and the acquisition has been funded by way of a bank loan and the company's
own 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 the
preparation of the full year's accounts to 31 December 2004, except for the
application of FRS 21 with effect from 1 January 2005. Prior period results
have been restated where necessary.
The interim statement, which was approved by the Board on 23 September 2005, is
not the Company's statutory accounts. The statutory accounts for each of the
two 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 with
the Registrar of Companies.
Financial calendar for the year ending 31 December 2005
The Company announces the following dates in its financial calendar for the
year ending
31 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
Wednesday, 15th May 2024
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