Interim Management Statement

RNS Number : 5878F

Hansard Global plc

13 November 2015

 

13 November 2015

Hansard Global plc

Interim Management Statement

Hansard Global plc ("Hansard" or "the Group"), the specialist long-term savings provider, issues its Interim Management Statement for the period from 1 July 2015 to date.  All figures refer to the three months ended 30 September 2015 (Q1 of the 2016 financial year), except where indicated.

Summary

·    Hansard continues to write increasing levels of well-diversified business with particular success in the Middle East where the strategy implementation has had the most time to take effect;

·    New business in Q1 of the 2016 financial year ("FY"), measured on a Present Value of New Business Premiums ("PVNBP") basis, was approximately 42% more than Q1 FY 2015 and consistent with the increased levels achieved in Q4 FY 2015;

·    The Group traded profitably during the period and generated positive cash flows;

·    An increased final dividend of 5.25p per share (2014: 5.0p) was approved at the Annual General Meeting held on 12 November 2015, with payment to be made on 19 November 2015.

Gordon Marr, Group Chief Executive Officer, commented:

"Despite global stock markets experiencing significant declines during the past quarter, we are pleased that the encouraging trend in our new business levels has continued and that we have maintained the momentum that we have built up over the past two quarters in both the levels of business written and our pipeline.

"We are encouraged by the results we are seeing from our approach and continue to work hard to ensure that the strategic investment made to our products and distribution network is leveraged across all the regions where we operate."

For further information:

Hansard Global plc   Gordon Marr, Group Chief Executive Officer Tim Davies, Chief Financial Officer	[phone]
Bell Pottinger Daniel de Belder	[phone]

Hansard Global plc

INTERIM MANAGEMENT STATEMENT

OVERVIEW

The Group continues to focus on the distribution of regular premium products in a range of jurisdictions around the world.  New relationships with a number of IFA networks in target markets are beginning to mature and deliver increased levels of new business.  We have built on the growth and momentum we have generated over the past two quarters as strategic and regional initiatives start to deliver results. We continue to see strong interest from clients and intermediaries in the Middle East and Africa, together with a good spread across our other targeted regions. 

In Present Value of New Business Premiums ("PVNBP") terms, levels of new business in Q1 FY 2016 were 42% ahead of Q1 FY 2015 and maintained the increased levels of sales experienced in Q4 FY 2015.  This is noteworthy given that historically Q1 is the slowest sales quarter due to the holiday season in August.

New Business Flows - QUARTER ENDED 30 SEPTEMBER 2015

New business flows for Hansard International Limited for Q1 FY 2016 on a range of metrics are summarised as follows:

					Q1 2016	Q1 2015
Basis					£m	£m	change
Compensation Credit					1.8	1.2	50.0%
Present Value of New Business Premiums					19.6	13.8	42.0%
Annualised Premium Equivalent					3.2	2.1	52.4%

·     Present Value of New Business Premiums ("PVNBP")

New business flows for Hansard International Limited for Q1 FY 2016 on the basis of PVNBP are summarised as follows:

					Q1 2016	Q1 2015
PVNBP by product type					£m	£m	change
Regular premium					12.8	7.7	66.2%
Single premium					6.8	6.1	11.5%
Total					19.6	13.8	42.0%

					Q1 2016	Q1 2015
PVNBP by geographical area					£m	£m	change
Far East					5.8	3.7	56.8 %
Middle East & Africa					4.8	1.1	336.4 %
Latin America					3.5	5.8	(39.7)%
Rest of World					5.5	3.2	71.9 %
Total					19.6	13.8	42.0 %

During the quarter we have maintained strong levels of business in the Middle East and Africa where we are significantly ahead of our new business targets for this period. Other markets such as the Caribbean and Europe (non-EU) are also outperforming their targets, with momentum continuing to build.

Latin America was the only region where significant increases were not achieved, but with a new sales executive recruited during the quarter, we expect to see increased sales in that region later in the year.

·     New business margins

At this early point in the financial year, new business margins have improved but still remain negative as reported in the year-end results.  We expect that as new business continues to grow and given a relatively flat cost base, margins will continue to recover.

FINANCIAL PERFORMANCE AND POSITION - 3 MONTHS TO 30 SEPTEMBER 2015

·            International Financial Reporting Standards ("IFRS")

The Group has traded profitably during the period and generated positive cash flows. Fee income levels earned by the Group are broadly consistent with those of Q4 FY 2015, however, the significant declines in global stock markets over the past 6 months have reduced fund-based income in Q1 FY 2016 compared to Q1 FY 2015.  This, together with the expected reduction of income from Hansard Europe Limited (which closed to new business in 2013) and a shift towards products with a longer payback period has resulted in unaudited IFRS profit before tax for Q1 FY 2016 being approximately 14% below Q1 FY 2015.

·            European Embedded Value ("EEV")

Stock market declines have also impacted on the Group's EEV, although the overall decline has been limited as a result of positive foreign exchange rate movements.

·            Capitalisation and Solvency

The Group continues to be strongly capitalised enabling it to satisfy operational, regulatory, intermediary and policyholder expectations. At 30 September 2015 the aggregate minimum regulatory margins remain covered approximately 15 times by available capital resources (30 June 2015: approximately 14 times).

Assets under Administration ("AUA")

The value of AuA is based upon the assets selected by or on behalf of policyholders to meet their savings and investment needs. The total of such assets is affected by the level of new premium contributions received from new and existing policy contracts, the amount of assets withdrawn by policyholders, charges and the effect of investment market and currency movements. 

During Q1 FY 2016, global stock markets experienced significant declines due to concerns over global economic growth levels, particular in China.  AuA consequently fell approximately £50.5m (or 5.6%) to £823.1m, reflecting such market declines.  Lump sum withdrawals from Hansard Europe Limited continue to exceed regular premium contributions from Hansard International Limited.

Group AuA movement in quarter	Q1 2016	Q1 2015
	£m	£m
AuA at 1 July	907.1	943.6
Deposits to investment contracts	23.9	25.9
Withdrawals from contracts and charges	(57.4)	(52.6)
Effect of market and currency movements	(50.5)	16.6
AuA at 30 September	823.1	933.5

Litigation and policyholder complaints

The Group continues to carefully manage the litigation exposures arising in Hansard Europe Limited. There have been no new writs received or other significant developments since the full year results were released in September. 

Results for the half-year ENDING 31 December 2015

New business results for the half-year ending 31 December 2015 are expected to be announced on 28 January 2016. Trading results for the half-year are expected to be announced on 25 February 2016.

Outlook

As the implementation of the Group's strategic investment continues to mature across further regions where we operate, we expect the trend of increased levels of new business to continue. 

Notes to editors:

·    Hansard Global plc is the holding company of the Hansard Group of companies. It was listed on the London Stock Exchange in December 2006. The Group is a specialist long-term savings provider, based in the Isle of Man.

·    The Group offers a range of flexible and tax-efficient investment products within a life assurance policy wrapper, designed to appeal to affluent, international investors.

·    The Group utilises a controlled cost distribution model by selling policies exclusively through a network of independent financial advisors, and the retail operations of certain financial institutions who provide access to their clients in more than 170 countries. The Group's distribution model is supported by Hansard Online, a multi-language internet platform, and is scaleable.

·    The principal geographic markets in which the Group currently services policyholders and financial advisors are the Far East, Latin America and the Middle East, in the case of Hansard International Limited, and Western Europe in the case of Hansard Europe Limited, the Group's two life assurance companies. Hansard Europe Limited closed to new business with effect from 30 June 2013. 

·    The Group's objective is to grow by attracting new business and positioning itself to adapt rapidly to market trends and conditions. The scaleability and flexibility of the Group's operations allow it to enter or develop new geographic markets and exploit growth opportunities within existing markets without the need for significant further investment.

·    Following the closure of Hansard Europe Limited to new business with effect from 30 June 2013, the Group continues to report new business performance within this document on Hansard International Limited alone. Reporting of Assets under Administration incorporates cash flows relating to insurance policies issued by both Hansard International and Hansard Europe.

Forward-looking statements:

This announcement may contain certain forward-looking statements with respect to certain of Hansard Global plc's plans and its current goals and expectations relating to future financial condition, performance and results. By their nature forward-looking statements involve risk and uncertainties because they relate to future events and circumstances which are beyond Hansard Global plc's control. As a result, Hansard Global plc's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in Hansard Global plc's forward-looking statements. Hansard Global plc does not undertake to update forward-looking statements contained in this announcement or any other forward-looking statement it may make. No statement in this announcement is intended to be a profit forecast or be relied upon as a guide for future performance.

 

END

 

 

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