Interim Results

RNS Number : 4649A
Personal Group Holdings PLC
29 September 2015
 

Press Release

29 September 2015

 

 

PERSONAL GROUP HOLDINGS PLC

 

("Personal Group" or "the Group")

                                                                          

Interim Results

 

Personal Group Holdings Plc (AIM: PGH), a leading provider of employee benefits, employee related insurance products and financial services in the UK, is pleased to report its results for the six months ended 30 June 2015:

 

Highlights

 

Revenue increased by 9.3% to £19.0m (2014: £17.4m) with like for like revenue increasing by 4.2% to £18.1m.

New core business generation increased 8.4% to £5.6m (2014: £5.1m)

Underlying EBITDA* increased by 2.1% to £4.5m (2014: £4.4m) with like for like EBITDA increasing by 9.5% to £4.9m, largely driven by core business

Profit before tax decreased by 15.8% to £2.9m (2014: £3.5m) with like for like profit before tax increasing by 15.3% to £4.0m.

Key financials:

 

 

H1  2015

H1  2014

Profit before tax

£2.9m

£3.5m

Interest

-

-

Depreciation

£0.2m

£0.2m

Amortisation of intangible assets

£0.3m

-

Share based expenses

£0.3m

£0.4m

Acquisition costs

£0.3m

£0.3m

Restructuring costs

£0.5m

-

EBITDA*

£4.5m

£4.4m

 

* Earnings before interest, tax, depreciation, amortisation, share based related expenses, restructuring costs and acquisition costs

 

Group balance sheet remains strong with total equity (shareholders' funds) of £26.6m (31 December 2014: £27.0m) and no debt

Dividends per share paid in the period up 6.6% to 10.45 pence per share (2014: 9.8 pence)

Basic EPS decreased by 9.6% to 7.79p (2014: 8.62p)

Establishment of Personal Group Mobile Limited in April 2015 through the acquisition of certain assets and liabilities of shebang Technologies Group Limited out of administration

Major contract wins secured including Lookers, Northgate and multiple care sector companies

                       

 

Mark Scanlon, Chief Executive of Personal Group, commented: 

"Our core business continues to perform consistently well with continued growth in new sales, top line revenue and bottom line profit.  In addition our Let's Connect business, operating alongside our core business, has given us the strength of conviction to develop it further by investing in our own Mobile Virtual Network Operator ("MVNO") named Personal Group Mobile ("PG Mobile") to provide smartphones and airtime on a salary sacrifice basis to our customer base.  This offers a 32-47% reduction in cost of a phone with airtime to our customers.

 

The first half of 2015 has seen the release of 'hapi' our new software platform on which all of our propositions reside.  This is now live with more than ten of our customers with many more rollouts planned.  This is a major step forward for us and fundamental to the development of our company."

 

 

- ENDS -

 

 

  For more information please contact:

 

Personal Group Holdings Plc

 

Mark Scanlon / Mike Dugdale

+44 (0)1908 605 000

 

Cenkos Securities Plc

 

Max Hartley / Stephen Keys (Nomad)

+44 (0)20 7397 8900

Russell Kerr (Sales)

 

 

  Media enquiries:

 

Abchurch Communications

 

Quincy Allan / Alex Shaw

+44 (0)20 7398 7700

quincy.allan@abchurch-group.com

www.abchurch-group.com

 

Notes to Editors

With over 30 years' experience of looking after its customers' employees, Personal Group Holdings Plc (AIM: PGH) is a leading provider of employee benefits and employee related insurance products, offering benefits programmes to over 2 million employees across the UK.

Personal Group's innovative approach to using technology to deliver its programmes, combined with its face-to-face method of communicating with employees, makes its offering compelling to blue chip clients across the UK as a way of attracting, retaining and motivating employees.  The Group tailors its packages to include insurance products such as hospital and convalescence plans, death benefit and income protection plans, as well as lifestyle benefits such as holiday and retail discounts, health and wellbeing benefits and a range of tax efficient benefits.

 

Personal Group can also supply home technology via salary sacrifice through its subsidiary Let's Connect.  Offering the latest iPads and other tablets, home computers and laptops, smart phones and smart TVs is a highly engaging benefit from which both the employer and employee can profit. In April 2015 the Group established its own Mobile Virtual Network Operator (MVNO) called Personal Group Mobile Ltd. which was achieved through the acquisition of the assets of shebang Technologies Ltd. This means that home technology, including handsets and airtime, can be provided via salary sacrifice with a reduction of c10-47% on costs to its client's employees.

 

Personal Group has a strong client base across a range of sectors including transport, where it works with the likes of Network Rail, Stagecoach and EYMS Group Ltd, and healthcare, where clients include Four Seasons Health Care, Priory Group and Spire Healthcare. The Group also covers logistics, with companies such as TNT Express and Bibby, and motoring with Manheim and JCT600 as clients. In addition the Group also has a strong presence in food manufacturing and service and clients include 2 Sisters Food Group and Young's Seafood.

 

With over 520 clients the Group has grown considerably and provides engaging and effective benefits packages across a breadth of sectors.  

 

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

 

  

 

 

 

Chairman's Statement

 

Summary

The Group continued to perform well in the first half of 2015, with like for like revenue up 4.2% on the equivalent period in 2014 and record new business generation.  Underlying EBITDA increased by 2.1%.  During the first half we acquired certain assets and the trade of an existing mobile virtual network operator (MVNO) and established PG Mobile, aimed at providing salary sacrifice phones and airtime to our established and new customers.  We are pleased with the early indications of the development of this business both alongside Let's Connect and as an additional offering to the employees in our core business host company clients.

 

Financial Performance

Total Group revenue for the six months ended 30 June 2015 increased by 9.3% to £19.0m (2014: £17.4m).  This reflects a 15.1% increase in earned premiums net of reinsurance and the revenue contribution from Let's Connect.

 

Annualised new business premiums written during the period from the Group's core employee benefits and insurance activities were once again a half-year record, at £5.6m, 8.4% ahead of 2014 (£5.1m).

 

Underlying EBITDA was £4.5m (2014: £4.4m) and whilst this represents only a 2.1% improvement on the equivalent period in 2014, the Group's performance on a like for like basis (excluding the impact of setting up our own MVNO) was an increase of 9.5%.

 

Group Profit before tax was £2.9m (2014: £3.5m).  This reflects £0.3m of acquisition costs and £0.5m of restructuring costs associated with the establishment of PG Mobile.

 

Total equity at 30 June 2015 was £26.6m (31 December 2014: £27.0m).  The structure of the balance sheet at 30 June 2015 reflects the acquisition of the MVNO assets and trade described above.

 

Business Review

 

Our core business continues to operate in a consistent manner, with a steady increase in sales and topline performance. This is reflected in the continued improvement in our profitability as we constrain our cost levels and as our claims ratio continues to stabilise.

 

The continuing attraction of our core products is evidenced by the particularly high proportion of sales in the first half which came from entirely new host company clients: more than 35% of total new sales were to employees of companies which were new to the Group.

 

Our like for like sales in Let's Connect were up 29% on the equivalent period last year.  The turnover of Let's Connect is as always very strongly weighted to the fourth quarter of the year.

 

The establishment of PG Mobile is a further development of our strategy to broaden the Group's offering to include additional products of appeal to our policyholders, to other employees in our host company clients, and to our Let's Connect customers.  The Group acquired in April certain assets and the trade of shebang Technologies, an existing MVNO, and we have incorporated this business into PG Mobile so as to be able to offer airtime tax efficiently, both as part of our smartphone Let's Connect package and as a standalone benefit for our wider customer base.  Airtime provisioning is increasingly becoming a form of utility rather than an occasional purchase, and as such its cost-effective provision should appeal to anyone who pays for a mobile phone.

 

Our new technology platform called 'hapi' is now released for use by our customers.  This is a state-of-the-art platform which is very customer-friendly: simple to navigate and use.  The system gives us a strong digital connection with the end user and for the first time enables us to offer our full product range.  Smaller as well as larger companies will find this attractive, and so it is expected to open up access to the growing SME market.  The system also offers far greater visibility and management information reporting, which is of great attraction to our host company clients.  In addition it significantly reduces our dependency on third parties.

 

Through the budget announcement recently we have seen Insurance Premium Tax ("IPT") increase from 6% to 9.5%, due to be implemented in November this year.  Our premium collection method through payroll deduction makes it difficult to adjust premiums retrospectively and we have decided as part of our annual price review to adjust our pricing for new business only.

 

Dividends

The first two dividends of 2015, each of 5.225p per share, were paid in March and June, with the third dividend of the same amount being paid on 24th September 2015.  The Directors expect that the fourth and final dividend for 2015 of the same amount will be paid in December.  This would give a total for the year of 20.9p per share (2014: 19.6p per share), an increase of 6.6%.

 

The Board

As announced earlier in the year Ken Rooney retired from his executive position as Chief Operating Officer in June 2015.  We are pleased that he will remain on the Group Board as a Non-executive Director.

 

Outlook

The Group's core business continues to perform strongly and grow steadily.

 

The acquisition last year of Let's Connect and the establishment this year of PG Mobile reflect the Group's intention to widen the range of its own products forming part of our employee benefits offering and to make available to our host company clients and to others products and services which are complementary to our core products.

 

We remain confident about the added value which this strategy will continue to generate for the benefit of our shareholders.

 

 

C J Curling

Non-Executive Chairman

 

29 September 2015

 

Consolidated income statement

 

 

 

6 months

ended 30

June 2015

Unaudited

6 months

ended 30

June 2014 Unaudited

12 months

ended 31

December 2014 Audited  

 

 

 

 

 

 

 Note

£'000

£'000

£'000

 

 

 

 

 

Gross premiums written

 

13,872

11,915

  24,189

Outward reinsurance premiums

 

(79)

(176)

(359)

Change in unearned premiums

 

5

242

                    233

Change in reinsurers' share of unearned premiums

 

(30)

(20)

  (9)

 

 

________

________

________

Earned premiums net of reinsurance

 

13,768

11,961

24,054

Other income:

 

 

 

 

  Insurance related

 

1,352

2,137

4,501

  Non-insurance related

 

3,795

3,082

18,202

  Investment property

 

33

33

67

Investment income

 

83

195

210

 

 

________

________

________

Revenue

 

19,031

17,408

47,034

 

 

________

________

________

 

 

 

 

 

Claims incurred

 

(3,440)

(3,384)

(6,551)

Insurance operating expenses

 

(5,504)

(5,478)

(10,525)

Other expenses:

 

 

 

 

  Insurance related

 

(765)

(735)

(1,599)

  Non-insurance related

 

(5,826)

(3,923)

(18,182)

Share based payment expenses

 

(291)

(446)

(797)

Charitable donations

 

(50)

(50)

(100)

Amortisation of intangible assets

 

(285)

(39)

(275)

 

 

________

________

________

Expenses

 

(16,161)

(14,055)

(38,029)

 

 

________

________

________

 

 

 

 

 

Results of operating activities

 

2,870

3,353

9,005

Share of profit of equity-accounted investee net of tax

 

41

106

192

 

 

________

________

________

Profit before tax

 

2,911

3,459

9,197

Tax

4

(556)

(868)

(1,653)

 

 

________

________

________

Profit for the period after tax

 

2,355

2,591

7,544

 

 

________

________

________

 

Earnings per share as arising from total and continuing operations

 

 Pence

Pence

Pence

Basic

5

7.79

8.62

25.1

Diluted

5

7.53

8.60

24.4

 

 

 

 

 

 

All operations are considered to be continuing.

 

 

Consolidated statement of comprehensive income

 

 

 

6 months

ended 30

June 2015

Unaudited

6 months

ended 30

June 2014

Unaudited

 

 

 

 

 

 

£'000

£'000

 

 

 

 

Profit for the period

 

2,355

2,591

 

 

 

 

Other comprehensive income

 

 

 

Available for sale financial assets:

 

 

 

 Valuation changes taken to equity

 

31

(21)

 Reclassification of gain on available for sale

 financial assets on derecognition

 

(5)

(22)

 

 

 

 

Income tax on unrealised valuation
changes taken to equity

 

(6)

5

 

 

 

 

 

 

_______

_______

Total comprehensive income for the period

 

2,375

2,553

 

 

_______

_______

 

 

 

 

 

 

  

 

Consolidated balance sheet at 30 June 2015

 

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

 

At 30

June 2015

Unaudited

At 30

June 2014

Unaudited

At 31

December 2014

Audited  

 

 

 

 

 

 

 

 

Note

£'000

£'000

£'000

 

ASSETS

 

 

 

 

 

Non-current assets

 

 

 

 

 

Goodwill

10,12

10,670

11,189

10,575

 

Intangible assets

11,12

2,399

666

1,373

 

Property, plant and equipment

6

4,988

5,063

4,850

 

Investment property

 

1,070

1,070

1,070

 

Equity-accounted investee

9

631

505

591

 

Financial assets

7

10,724

13,422

11,610

 

 

 

________

________

________

 

 

 

30,482

31,915

30,069

 

 

 

________

________

________

Current assets

Cash and cash equivalents

 

4,330

1,835

4,433

 

Trade and other receivables

 

8,149

7,051

16,783

 

Reinsurance assets

 

329

393

351

 

Inventories

 

289

288

623

 

 

 

________

________

________

 

 

 

13,097

9,567

22,190

 

 

 

________

________

________

 

Total assets

 

43,579

41,482

52,259

 

 

 

________

________

________

 

 

 

 

 

 

           

 

 

Consolidated balance sheet at 30 June 2015

 

 

 

At 30

June 2015

Unaudited

At 30

June 2014

Unaudited

At 31

December 2014

Audited  

 

 

 

 

 

 

 

£'000

£'000

£'000

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

 

 

Equity attributable to equity holders of Personal Group Holdings plc

 

 

 

 

Share capital

 

1,517

1,507

1,516

Capital redemption reserve

 

24

24

24

Amounts recognised directly into equity relating to available for sale financial assets

 

(4)

23

                        (24)

Other reserve - own shares

 

(476)

(627)

(548)

Profit and loss reserve

 

25,513

23,772

26,080

 

 

________

________

________

Total equity

 

26,574

24,699

27,048

 

 

________

________

________

                                                                       

 

LIABILITIES

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

Deferred tax liabilities

 

219

118

255

 

 

________

________

________

Current liabilities

 

 

 

 

Provisions

 

23

33

23

Trade and other payables

 

13,296

12,837

21,313

Insurance contract liabilities

 

2,918

2,996

2,784

Current tax liabilities

 

549

799

836

 

 

________

________

________

 

 

16,786

16,665

24,956

 

 

________

________

________

 

 

 

 

 

 

 

________

________

________

Total liabilities

 

17,005

16,783

25,211

 

 

________

________

________

 

 

 

 

 

 

 

________

________

________

Total equity and liabilities

 

43,579

41,482

52,259

 

 

________

________

________

 

 

 

Consolidated statement of changes in equity for the six months ended 30 June 2015

                           

 

                                                   

 

 

 

Share capital

Capital

redemption

reserve

Available for sale financial assets

Other reserve

Profit & loss reserve

Total equity

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

Balance as at 1 January 2015

1,516

24

(24)

(548)

26,080

27,048

 

________

________

________

________

________

________

Dividends

-

-

-

-

(3,160)

(3,160)

Employee share-based compensation

-

-

-

-

291

291

Proceeds of AESOP* share sales

-

-

-

-

90

90

Cost of AESOP shares sold

-

-

-

142

(142)

-

Cost of AESOP shares purchased

-

-

-

(70)

-

(70)

Nominal value of LTIP** shares issued

1

-

-

-

(1)

-

 

________

________

________

________

________

________

Transactions with owners

1

-

-

72

(2,922)

(2,849)

 

________

________

________

________

________

________

Profit for the period

-

-

-

-

2,355

2,355

Other comprehensive income

 

 

 

 

 

 

Available for sale financial assets:

 

 

 

 

 

 

  Valuation changes taken to equity

-

-

31

-

-

31

  Transfer to income statement

-

-

(5)

-

-

(5)

  Current tax on unrealised

  valuation changes taken to
  equity

 

-

 

-

 

              (6)

 

-

 

-

(6)

 

________

________

________

________

________

________

Total comprehensive income for the period

-

-

 

20

-

2,355

2,375

 

________

_______

_______

_______

_______

_______

 

 

 

 

 

 

 

Balance as at 30 June 2015

1,517

24

(4)

(476)

25,513

26,574

 

________

________

________

________

________

________

 

 

·     All Employee Share Option Plan (AESOP) ** Long Term Incentive Plan (LTIP)

 

Consolidated statement of changes in equity for the year ended 31 December 2014

 

 

                                                   

 

 

 

Share capital

Capital

redemption

reserve

Available for sale financial assets

Other reserve

Profit & loss reserve

Total equity

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

Balance as at 1 January 2014

1,507

24

61

(264)

23,835

25,163

 

________

________

________

________

________

________

Dividends

-

-

-

-

(5,899)

(5,899)

Employee share-based compensation

-

-

-

-

797

797

Proceeds of AESOP* share sales

-

-

-

-

349

349

Cost of AESOP shares sold

-

-

-

537

(537)

-

Cost of AESOP shares purchased

-

-

-

(821)

-

(821)

Nominal value of LTIP** shares issued

9

-

-

-

(9)

-

 

________

________

________

________

________

________

Transactions with owners

9

-

-

(284)

(5,299)

(5,574)

 

________

________

________

________

________

________

Profit for the period

-

-

-

-

7,544

7,544

Other comprehensive income

 

 

 

 

 

 

Available for sale financial assets:

 

 

 

 

 

 

 Valuation changes taken to equity

-

-

(65)

-

-

(65)

 Transfer to income statement

-

-

(34)

-

-

(34)

 Current tax on unrealised

  valuation changes taken to
  equity

 

-

 

-

 

14

 

-

 

-

14

 

________

________

________

________

________

________

Total comprehensive income for the period

-

-

 

(85)

-

7,544

7,459

 

________

________

________

________

________

________

 

 

 

 

 

 

 

Balance as at 31 December 2014

1,516

24

(24)

(548)

26,080

27,048

 

________

________

________

________

________

________

 

 

                                                       

 

 

 

 

 

 

 

          Consolidated statement of changes in equity for the six months ended 30 June 2014

 

 

 

 

 

Share capital

Capital

redemption

reserve

Available for sale financial assets

Other reserve

Profit & loss reserve

Total equity

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

Balance as at 1 January 2014

1,507

24

61

(264)

23,835

25,163

 

________

________

________

________

________

________

Dividends

-

-

-

-

(2,947)

(2,947)

Employee share-based compensation

-

-

-

-

446

446

Proceeds of AESOP* share sales

-

-

-

-

288

288

Cost of AESOP shares sold

-

-

-

441

(441)

-

Cost of AESOP shares purchased

-

-

-

(804)

-

(804)

Nominal value of LTIP** shares issued

-

-

-

-

-

-

 

________

________

________

________

________

________

Transactions with owners

-

-

-

(363)

(2,654)

(3,017)

 

________

________

________

________

________

________

Profit for the period

-

-

-

-

2,591

2,591

Other comprehensive income

 

 

 

 

 

 

Available for sale financial assets:

 

 

 

 

 

 

Valuation changes taken to equity

-

-

(21)

-

-

21

Transfer to income statement

 

-

 

-

 

(22)

 

-

 

-

(22)

Current tax on unrealised

valuation changes taken to equity

 

-

 

-

 

5

 

-

 

-

5

 

________

________

________

________

________

________

Total comprehensive income for the period

-

-

 

(38)

-

2,591

2,553

 

________

________

________

________

________

________

 

 

 

 

 

 

 

Balance as at 30 June 2014

1,507

24

23

(627)

23,772

24,699

 

________

________

________

________

________

________

 

 

 

 

     Consolidated cash flow statement

 

 

 

6 months

ended 30

June 2015

Unaudited

6 months

ended 30

June 2014

Unaudited

12 months

ended 31

December 2014

Audited

 

 

 

 

 

Net cash from operating activities (see opposite)

 

3,745

2,333

5,998

 

 

______

______

______

Investing activities

 

 

 

 

Additions to property, plant and equipment

 

(326)

(415)

(412)

Proceeds from disposal of property, plant and equipment

3

52

72

Purchase of own shares by the AESOP

 

(70)

(804)

(821)

Proceeds from disposal of own shares by the AESOP

 

90

288

349

Purchase of financial assets

 

(75)

(136)

(246)

Proceeds from disposal of financial assets

 

1,002

1,730

3,655

Additions to investment property

 

-

(130)

(130)

Interest received

 

66

140

131

Dividends received

 

12

9

21

 

 

______

______

______

Net cash from investing activities

702

734

2,619

 

 

______

______

______

Acquisition and disposal activities

 

 

 

 

Payment to acquire Let's Connect

 

-

(6,000)

(6,000)

Payment to acquire trade and assets of shebang

 

(1,390)

-

-

Net cash acquired with trading

 

-

724

724

 

 

______

______

______

Net cash from acquisition and disposal activities

 

(1,390)

(5,276)

(5,276)

 

 

______

______

______

Financing activities

 

 

 

 

Dividends paid

 

(3,160)

(2,947)

(5,899)

 

 

______

______

______

Net cash used in financing activities

 

(3,160)

(2,947)

(5,899)

 

 

______

______

______

Net change in cash and cash equivalents

 

(103)

(5,156)

(2,558)

Cash and cash equivalents, beginning of period

4,433

6,991

6,991

 

 

_______

_______

_______

Cash and cash equivalents, end of period

4,330

1,835

4,433

 

 

Consolidated cash flow statement

 

 

 

6 months

ended 30

June 2015

Unaudited

6 months

ended 30

June 2014

Unaudited

12 months

ended 31

December 2014

Audited

 

 

 

 

 

Operating activities

 

£'000

£'000

£'000

Profit after tax

 

2,355

2,591

7,544

Adjustment for:

 

 

 

 

  Depreciation

 

190

191

385

  Goodwill impairment

 

-

39

-

  Amortisation of intangible assets

 

285

-

275

  Profit on disposal of property, plant and equipment

-

(30)

(34)

  Realised and unrealised net investment losses/(profits)

(15)

(19)

(31)

  Interest received

 

(66)

(140)

(131)

  Dividends received

 

(12)

(9)

(21)

  Share of profit of equity-accounted investee, net of tax

(41)

(106)

(192)

  Share-based payments

 

291

446

797

  Taxation expense recognised in income statement

556

868

1,653

Changes in working capital:

 

 

 

 

  Trade and other receivables

 

8,676

(2,842)

(12,283)

  Trade and other payables

 

(7,978)

2,393

10,366

  Inventories

 

388

(137)

(472)

Taxes paid

 

(884)

(912)

(1,858)

 

 

______

______

______

Net cash from operating activities

 

3,745

2,333

5,998

 

 

______

______

______

 

Notes to the consolidated financial statements

 

 

1          General information

 

The principal activities of Personal Group Holdings Plc ('the company') and subsidiaries ('the group') include transacting short-term accident and health insurance and providing employee benefits related business and financial services in the UK.

 

The company is a public limited company incorporated and domiciled in England.  The address of its registered office is John Ormond House, 899 Silbury Boulevard, Milton Keynes MK9 3XL.

 

The company's shares trade on the AIM of the London Stock Exchange.

 

The condensed consolidated financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the group as at and for the year ended 31 December 2014.

 

The financial information for the year ended 31 December 2014 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.  The statutory financial statements for the year ended 31 December 2014 have been filed with the Registrar of Companies.  The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

 

These interim financial statements are unaudited and have not been reviewed by the auditors under International Standard on Review Engagements (UK and Ireland) 2410.

 

These consolidated interim financial statements have been approved for issue by the board of directors on 28 September 2015.

 

2          Accounting policies

 

These June 2015 interim consolidated financial statements of Personal Group Holdings Plc are for the six months ended 30 June 2015.  These interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting.  They do not include all the information required for a complete set of IFRS financial statements.  However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2014.

 

These financial statements have been prepared on the basis of the recognition and measurement requirements of those IFRS standards and IFRIC interpretations as adopted by the EU, issued and effective or issued and early adopted in respect of periods beginning on or after 1 January 2014. 

 

The principal accounting policies have remained unchanged from the year ended 31 December 2014.

 

3          Segment analysis

 

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 a PRA 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, the provision of salary sacrifice technology products and property rental income.  Non-insurance related expenses include costs relating to those sales, and also acquisition costs.  Non-insurance income and expenses have increased in 2015 due to the additional sales and purchases made subsequent to the acquisition of the trade and assets of Shebang.


 

 

 

Notes to the consolidated financial statements

 

 

 

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:

 

Employee

benefits

£'000

 

Financial services

£'000

Unallocated

£'000

 

Consolidation

adjustments

£'000

Group

£'000

 

 

 

 

 

 

Operating segments

 

 

 

 

 

 

 

 

 

 

 

For the 6 months ended 30 June 2015

 

 

 

 

 

Revenue

 

 

 

 

 

Earned premiums net of reinsurance

Other income:

13,768

 

-

-

-

13,768

 

   Insurance related

1,154

198

-

-

1,352

   Non-insurance related

3,795

-

-

-

3,795

   Investment property

-

-

33

-

33

Investment income

83

-

-

-

83

 

________

________

________

________

________

Total revenue

 

18,880

 _______

198

______

33

______

-

______

19,031

_______

Net result for period before tax

2,976

132

33

(271)

2,870

 

_______

_______

_______

_______

_______

Segment assets

28,756

799

940

13,084

43,579

 

_______

_______

_______

_______

_______

Segment liabilities

16,398

607

-

-

17,005

 

_______

_______

_______

_______

_______

Depreciation and amortisation

190

-

-

285

475

 

_______

_______

_______

_______

_______

 

 

 

 

 

 

 

 

 

Notes to the consolidated financial statements

 

 

Employee

benefits

£'000

Financial services

£'000

Unallocated

£'000

Consolidation

adjustments

£'000

Group

£'000

 

 

 

 

 

 

For the year ended 31 December 2014

 

 

 

 

 

Revenue

 

 

 

 

 

Earned premiums net of reinsurance

Other income:

24,054

-

-

-

24,054

   Insurance related

4,007

494

-

-

4,501

   Non-insurance related

18,202

-

-

-

18,202

   Investment property

-

-

67

-

67

Investment income

210

-

-

-

210

 

_______

_______

_______

_______

_______

Total revenue

 

46,473

_______

494

_______

67

_______

-

_______

47,034

_______

 

 

 

 

 

 

Net result for year before tax

9,361

347

67

   (770)

9,005

 

_______

_______

_______

_______

_______

Segment assets

38,694

677

940

11,948

52,259

 

_______

_______

_______

_______

_______

Segment liabilities

24,829

382

-

-

25,211

 

_______

_______

_______

_______

_______

Depreciation and amortisation

376

-

-

284

660

 

_______

_______

_______

_______

_______

 

 

 

 

 

 

 

 

Employee

benefits

£'000

Financial services

£'000

Consolidation

 adjustments

£'000

Group

£'000

 

 

 

 

 

 

 

 

 

 

 

 

For the 6 months ended 30 June 2014

 

 

 

 

 

Revenue

 

 

 

 

 

Earned premiums net of reinsurance

Other income:

11,961

 

-

-

-

11,961

 

   Insurance related

1,853

284

-

-

2,137

   Non-insurance related

3,082

-

-

-

3,082

   Investment property

-

-

33

-

33

Investment income

195

-

-

-

195

 

________

________

________

________

________

Total revenue

 

17,091

 _______

284

_______

33

_______

-

_______

17,408

_______

Net result for period before tax

3,535

216

33

    (431)

3,353

 

_______

_______

_______

_______

_______

Segment assets

27,795

892

940

11,855

41,482

 

_______

_______

_______

_______

_______

Segment liabilities

16,173

610

-

-

16,783

 

_______

_______

_______

_______

_______

Depreciation and amortisation

230

-

-

-

230

 

_______

_______

_______

_______

_______

 

 

Income is derived from the UK and Guernsey (Dec 2014 all income was derived from UK)

 

The figures shown above for employee benefits and financial services are from the group's management accounts. Unallocated amounts relate to the group's investment property.

 

 

Notes to the consolidated financial statements

 

 

 

4          Taxation

 

Tax expense is recognised based on the weighted-average annual income tax rate expected for the full financial year multiplied by management's best estimate of the taxable profit of the interim reporting period.

 

The Group's consolidated effective tax rate in respect of continuing operations for the six months ended 30 June 2015 was 19.4% (six months ended 30 June 2014: 25.9%).

 

 

5          Earnings per share and dividends

 

The weighted average numbers of outstanding shares used for basic and diluted earnings per share are as follows:

 

 

6 months

ended 30

June 2015

EPS

Pence

6 months

ended 30

June 2014

EPS

Pence

12 months

ended 31

December 2014

EPS

Pence

 

 

 

 

 

 

 

Basic

30,229,332

7.79

30,066,146

8.62

30,066,390

25.1

Diluted

31,280,284

7.53

30,102,976

8.60

30,901,027

24.4

 

 

During the first six months of 2015, Personal Group Holdings Plc paid dividends of £3,160,000 to its equity shareholders (six months to 30 June 2014: £2,954,000, twelve months to 31 December 2014: £5,916,000). This represents a payment of 10.45p per share (six months to 30 June 2014: 9.8p, twelve months to 31 December 2014: 19.6p).      

 

In the statement of changes in equity and the cash flow statement dividends are stated net of amounts paid on treasury shares and unallocated shares held by Personal Group Trustees Limited as follows:

 

 

 

 

6 months ended 30 June 2015

6 months ended 30 June 2014

12 months ended 31 December 2014

6 months ended 30 June 2015

 

6 months ended 30 June 2014

12 months ended 31 December 2014

 

 

 

 

 

 

 

 

Pence per share

£'000

£'000

£'000

Equity dividends

 

 

 

 

 

 

Ordinary shares paid in period

 

 

 

 

 

 

 

 

 

 

 

 

 

March

5.225

4.90

4.90

1,580

1,477

1,477

June

5.225

4.90

4.90

1,580

1,477

1,477

September

-

-

4.90

-

-

1,477

December

-

-

4.90

-

-

1,485

 

 

 

 

______

______

______

 

 

 

 

3,160

2,954

5,916

Less: amounts paid on own shares

 

 

 

 

 

-

 

(7)

 

(17)

 

_____

_____

______

______

______

______

 

10.45

9.80

19.60

3,160

2,947

5,899

 

_____

_____

______

______

______

______

 

 

Notes to the consolidated financial statements

 

 

6          Property, plant and equipment

 

For the six months ended 30 June 2015

 

Freehold land and properties

£'000

Motor vehicles

£'000

Computer

equipment

£'000

Furniture fixtures & fittings

£'000

Leasehold improve-

ments

 £'000

Other

£'000

Total

£'000

Cost

 

 

 

 

 

 

 

At 1 January 2015

5,478

169

1,060

970

15

59

7,751

Acquisition

-

-

-

5

-

-

5

Additions

-

-

309

17

-

-

326

Disposals

-

-

(3)

(2)

-

-

(5)

 

______

______

______

______

______

______

______

At 30 June 2015

5,478

169

1,366

990

15

59

8,077

 

______

______

______

______

______

______

______

Depreciation

 

 

 

 

 

 

 

At 1 January 2015

1,316

17

755

778

8

27

2,901

Acquisition

-

-

-

-

-

-

-

Provided in the period

47

14

101

21

2

5

190

Eliminated on disposals

-

-

(1)

(1)

-

-

(2)

 

______

______

______

______

______

______

______

At 30 June 2015

1,363

31

855

798

10

32

3,089

 

______

______

______

______

______

______

______

 

 

 

 

 

 

 

 

Net book amount at 30 June 2015

4,115

138

511

192

5

27

4,988

 

______

______

______

______

______

______

______

 

 

 

 

 

 

 

 

Net book amount at 31 December 2014

4,162

152

305

192

7

32

4,850

 

______

______

______

______

______

______

______

 

 

 

For the year ended 31 December 2014

 

Freehold land and properties

£'000

Motor vehicles

£'000

Computer

equipment

£'000

Furniture fixtures & fittings

£'000

Leasehold improve-

ments

 £'000

Other

£'000

Total

£'000

Cost

 

 

 

 

 

 

 

At 1 January 2014

5,478

145

841

931

-

-

7,395

Acquisition

-

1

29

7

15

59

111

Additions

-

168

206

38

-

-

412

Disposals

-

(145)

(16)

(6)

-

-

(67)

 

_____

_____

_____

_____

_____

_____

_____

At 31 December 2014

5,478

169

1,060

970

15

59

7,751

 

_____

_____

_____

_____

_____

_____

_____

Depreciation

 

 

 

 

 

 

 

At 1 January 2014

1,222

103

536

744

-

-

2,605

Acquisition

-

1

13

4

4

19

41

Provided in the year

94

22

221

36

4

8

385

Eliminated on disposals

-

(109)

(15)

(6)

-

-

(130)

 

_____

_____

_____

_____

_____

_____

_____

At 31 December 2014

1,316

17

755

778

8

27

2,901

 

_____

_____

_____

_____

_____

_____

_____

 

 

 

 

 

 

 

 

Net book amount at 31 December 2014

4,162

152

305

192

7

32

4,850

 

______

______

______

______

______

______

______

 

 

 

 

 

 

 

 

Net book amount at 31 December 2013

4,256

42

305

187

-

-

4,790

 

______

______

______

______

______

______

______

 

 

 

Notes to the consolidated financial statements

 

 

For the six months ended 30 June 2014

 

Freehold land and properties

£'000

Motor vehicles

£'000

Computer

equipment

£'000

Furniture fixtures & fittings

£'000

Leasehold improve-

ments

 £'000

Other

£'000

Total

£'000

Cost

 

 

 

 

 

 

 

At 1 January 2014

5,478

145

841

931

-

-

7,395

Acquisition

-

-

15

3

10

42

70

Additions

-

92

299

24

-

-

415

Disposals

-

(119)

-

-

-

-

(119)

 

______

______

______

______

______

______

______

At 30 June 2014

5,478

118

1,155

958

10

-

7,761

 

______

______

______

______

______

______

______

Depreciation

 

 

 

 

 

 

 

At 1 January 2014

1,222

103

536

744

-

-

2,605

Acquisition

-

-

2

-

1

3

6

Provided in the period

49

7

112

17

-

-

185

Eliminated on disposals

-

(98)

-

-

-

-

(98)

 

______

______

______

______

______

______

______

At 30 June 2014

1,271

12

650

761

1

3

2,698

 

______

______

______

______

______

______

______

 

 

 

 

 

 

 

 

Net book amount at 30 June 2014

4,207

106

505

197

9

39

5,063

 

______

______

______

______

______

______

______

 

 

 

 

 

 

 

 

Net book amount at 31 December 2013

4,256

42

305

187

-

-

4,790

 

______

______

______

______

______

______

______

 

 

 

7         Financial assets

 

 

At 30 June

2015

Unaudited

At 30 June

2014

Unaudited

At 31 December

2014

Audited

 

£'000

£'000

£'000

 

 

 

 

Bank deposits

9,914

11,802

10,859

Loans & receivables

-

922

-

Investment Bond

100

-

100

Financial assets:

 

 

 

  Available for sale

710

698

651

 

________

________

________

 

10,724

13,422

11,610

 

_________

_________

_________

 

IFRS 13 Fair Value Measurement establishes a fair value hierarchy that categorises into three levels the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs)

·      Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

·      Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

·      Level 3: inputs for the asset or liability that are not based on observable market data (unobservable input).

The available for sale financial assets are stated at their bid market price, these are all based on level 1 inputs.

 

 

Notes to the consolidated financial statements

 

Loans and receivables (as at 30 June 2014), held at amortised cost, were short-term trade receivables and the carrying amount is a reasonable approximation of fair value. The loans and receivables were secured by a charge over the Milton Keynes property shown within note 9.

Bank deposits, also held at amortised cost, are due within 6 months and the carrying amount is a reasonable approximation of fair value.

 

Trade receivables arising out of direct insurance operations and other receivables are also held at amortised cost and the carrying amount is a reasonable approximation of fair value.

 

The investment bond subscribed to during 2014 is held in Criticaleye Investments plc and has a fixed three-year initial term. Interest is paid at 8% gross per annum. The bond was acquired late in 2014 and the carrying value is a reasonable approximation of fair value.

           

 

8         Long Term Incentive Plan (LTIP)

 

During 2012 the company adopted a discretionary LTIP for the benefit of selected directors and senior employees of Personal Group. 

 

The Plan provides for the grant of awards, entitling participants to the payment of a bonus relating to the percentage increase in the market capitalisation of the company over a specified period. The awards will be satisfied in shares or in the discretion of the remuneration committee wholly or partly in cash in accordance with the plan rules. It is management's intention to settle these awards in shares.

 

A participant would be entitled to a payment in respect of their award on each of the second, third, fourth and fifth anniversary of their commencement date in the plan or if there is an exit event such as a sale before the fifth

anniversary date.  Each participant has been awarded a specified percentage of the value increase in the market capitalisation. If there is no increase in market capitalisation at the award dates then no payment will be made.

 

Where the market capitalisation has increased the level of payment will be 10%, 30%, 60% and 100% cumulatively on the second, third, fourth and fifth anniversary respectively. The number of shares awarded will be determined by dividing the amount of appropriate payment by the average of the closing bid price for the 20 business days immediately preceding the date of issue.

 

An amount of £271,000 has been charged to the profit and loss account for this scheme in the six months ended 30 June 2015 (six months ended 30 June 2014: £431,000) based on estimating the future share price of the company over the duration of the plan. Estimates of future share prices have been used for the remaining payments to calculate the expense for each individual under their remaining tranches, taking into account the maximum cap on the payout to all individuals in the scheme of £10,000,000.

 

Given that the estimate is highly sensitive to share price movement, the following scenarios have been considered:

 

-   If the share price were to increase at a quicker rate than assumed the charge for the period would have increased by £43,000

-   If the share price were to remain static for the remainder of the plan or if the share price were to reduce over the remainder of the plan there would have been no charge for the period.

 

As at 30 July 2015 the above scheme was amended to:

 

-   Include a maximum cap on market capitalisation of £183.7m; this will have the impact of reducing the maximum cap on the payout to individuals on the scheme to £7,987,000.

-   Grant options rather than shares at each vesting date; this change will not have any impact on the charge to the profit and loss account.

 

A further LTIP scheme ("LTIP2") was then put in place to take effect from 30 July 2015:

 

-   The current 5 Year Senior Management LTIP ("LTIP1") will mature at the end of 2016. As with LTIP1, LTIP2 is designed to reward directors and certain other senior employees in a way that aligns the interests of LTIP participants with the interests of shareholders, as well as with the Group's long-term strategic plan.

 

 

Notes to the consolidated financial statements

 

 

9         Equity-accounted investment

 

During 2004 the company entered into a joint venture agreement with Abbeygate Developments Limited to construct a freehold joint office and residential property development on land adjacent to John Ormond House. A joint venture company called Abbeygate Developments (Marlborough Gate 2) Limited was established to construct the property. This company is owned equally by Personal Group Holdings Plc and Abbeygate Developments Limited.

 

The development was funded by way of a loan from Personal Group Holdings Plc. The profit and loss account and balance sheet for this joint venture company are as follows:

 

 

 

Profit and loss account

 

6 months ended 30

June 2015

6 months ended 30

June 2014

12 months

ended 31 December 2014

 

 

Unaudited

Unaudited

Audited

 

 

£'000

£'000

£'000

 

 

 

 

 

Rent receivable

 

81

127

210

Profit on disposal of apartments

 

35

226

388

Administration expenses

 

(15)

(58)

(84)

 

 

________

________

________

Operating profit

 

101

295

514

Interest payable

 

-

(25)

(30)

 

 

________

________

________

Profit on ordinary activities before taxation

 

101

270

484

Tax on profit on ordinary activities

 

(20)

(58)

(99)

 

 

________

________

________

Profit for the financial period retained

 

81

212

385

 

 

________

________

________

Personal Group Holdings share of profit

 

41

106

192

 

 

________

________

________

 

 

Balance sheet

 

6 months ended 30

June 2015

6 months ended 30

June 2014

12 months

ended 31 December 2014

 

 

Unaudited

Unaudited

Audited

 

 

£'000

£'000

£'000

 

 

 

 

 

Current assets

 

 

 

 

Inventories

 

1,058

2,091

1,236

Debtors

 

375

(6)

98

Cash at bank and in hand

 

18

12

18

 

 

________

________

________

 

 

1,451

2,097

1,352

 

 

 

 

 

Creditors: amounts falling due within one year

 

(190)

(1,088)

(170)

 

 

________

________

________

Net current assets

 

1,261

1,009

1,182

 

 

________

________

________

Capital and reserves

 

 

 

 

Called up share capital

 

-

-

-

Profit and loss account

 

1,261

1,009

1,182

 

 

________

________

________

Shareholders' funds

 

1,261

1,009

1,182

 

 

________

________

________

Personal Group Holdings share of net assets

 

631

505

591

 

 

________

________

________

 

 

Notes to the consolidated financial statements

  

10         Goodwill

 

 

PGM

Let's Connect

Total

 

£'000

£'000

£'000

 

 

 

 

Cost

 

 

 

At 1 January 2015

-

10,575

10,575

Additions in the year 

95

-

95

 

      _________

      _________

   ________

At 30 June 2015

95

10,575

10,670

 

      _________

      _________

   ________

 

 

 

 

Amortisation and impairment

 

 

 

At 1 January 2015

-

-

-

Impairment charge for year

-

-

-

 

      _________

      _________

      _________

At 30 June 2015

0

0

0

 

      _________

      _________

      _________

 

 

 

 

Net book value at 30 June 2015

95

10,575

10,670

 

_________

_________

_________

 

 

11        Intangible assets

 

 

 

Customer Value

Software

Licence agreements

Customer Contracts

Total

 

Let's Connect

PGM

PGM

PGM

 

 

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

At 1 January 2015

1,648

-

-

-

1,648

Additions in the year 

-

506

703

102

1,311

 

   ________

   ________

   ________

   ________

   ________

At 30 June 2015

1,648

506

703

102

2,959

 

   ________

   ________

   ________

   ________

   ________

 

 

 

 

 

 

Amortisation and impairment

 

 

 

 

 

At 1 January  2015

275

-

-

-

275

Amortisation charge for year

165

60

51

9

285

 

      _________

      _________

      _________

      ________

      _________

At 30 June 2015

440

60

51

9

560

 

      _________

      _________

      _________

      ________

      _________

 

 

 

 

 

 

Net book value at 30 June 2015

1,208

446

652

93

2,399

 

_________

_________

_________

________

_________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes to the consolidated financial statements

 

 

12         Acquisitions of business

 

Acquisitions in the current period

 

On 1 April 2015 Personal Group Mobile Limited (PGM) was incorporated as a new subsidiary within the Group and on 17 April 2015 PGM purchased the trade and certain assets and liabilities of shebang Technology Group Limited (shebang) out of administration for a total consideration of £1.4m. £0.7m was paid to the administrator of shebang and a further £0.7m was paid to Hutchison 3G UK Limited (Three UK) in respect of novation of a Mobile Virtual Network Operator Services agreement. PGM is a Mobile Virtual Network Operator ("MVNO") aimed at providing salary sacrifice phones and airtime to its established and new customers through the Group's subsidiary Let's Connect in addition to shebang's existing distribution channels. The acquisition is highly complementary to the Group's salary sacrifice product offering and customer base, and it provides the Group with another reason to engage and rollout employee benefit programmes, which can include its core insurance products. It has also brought with it over 20 years' of experience in the mobile industry, an established relationship with Three UK and an experienced team of 40 people based in Daventry already serving its customers with over 10,000 connections.

 

In the period to 30 June 2015 the business contributed net loss of £0.9m including acquisition costs of £0.3m and re-organisation costs of £0.4m. 

 

 

Effect of acquisition

 

The acquisition had the following effect on the Group's assets and liabilities.

 

 

 

*Recognised Values on Acquisition

 

 

£'000

Net assets acquired:

 

 

Licence agreement (intangible)

 

703

Software (intangible)

 

506

Customer value (intangible)

 

102

Property, plant and equipment

 

5

Inventories

 

55

Trade and other receivables

 

20

Trade and other payables

 

(96)

 

 

_________

Net identifiable assets and liabilities

 

1,295

 

 

_________

 

Consideration paid

 

1,390

 

 

_________

Goodwill on acquisition

 

95

 

 

_________

 

 

 

*The recognised values above have been determined on a book basis with the exception of licence agreement, software and customer value which represent a provisional assessment of fair value. A complete assessment of fair values will be completed for the year end.

 

A minimal amount of goodwill has arisen because the consideration paid reflects management expectations of the future profitability of the business, whilst recognising that the majority of this future profitability will derive from new income streams.

 

The licence agreement, software and customer value are being amortised through the consolidated income statement over 3 year, 2 year and 3 year periods respectively; the combined charge for the 6 months to 30 June 2015 was £105k.

 

 

 

Notes to the consolidated financial statements

 

 

 

Financial calendar for the year ending 31 December 2015

 

The company announces the following dates in its financial calendar for the year ending 31 December 2015:

 

·      Preliminary results for the year ending 31 December 2015                               -           March 2016

·      Publication of Report and Accounts for 2015                                                  -           March 2016

·      AGM                                                                                                           -           April 2016

 

 

 

 

 

 

 

                     


This information is provided by RNS
The company news service from the London Stock Exchange
 
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