TIDMPGH
RNS Number : 3932U
Personal Group Holdings PLC
28 March 2023
28 March 2023
Personal Group Holdings plc
("the Company", "Personal Group" or "Group")
Preliminary Results and Final Dividend
Personal Group Holdings Plc (AIM: PGH), the workforce benefits
and services provider, is pleased to announce its preliminary
results for the year ended 31 December 2022.
The Group has successfully delivered growth across the majority
of its KPIs, increasing total client numbers and reporting double
digit growth in key areas of recurring revenue. The strength of
trading in the second half of the year underpins the Board's
confidence that Personal Group is firmly back on a growth
trajectory and set to benefit from the investments that have been
made in the offering and team.
Financial Highlights
-- Group revenue up 16% to GBP86.7m (2021: GBP74.5m)
-- Adjusted EBITDA* of GBP6.0m, in line with market
expectations, (2021: GBP6.1m), showing significant half on half
EBITDA growth (H2 2022 adjusted EBITDA of approximately GBP4.5m, H1
2022: GBP1.5m)
-- Adjusted profit before tax** of GBP3.8m (2021: GBP4.3m
profit), with a statutory loss before tax of GBP6.8m as a result of
GBP10.6m goodwill impairment of Let's Connect
-- Adjusted Basic EPS** of 10.6p (2021: 11.5p), with a statutory
Basic EPS of (23.1)p (2021: 11.5p)
-- Strong balance sheet and liquidity, with cash and deposits at
year end of GBP18.7m (2021: GBP22.9m) and no debt
-- Final dividend for 2022 of 5.3p per share, making a full year
dividend for 2022 of 10.6p (2021: 10.6p)
Operational Highlights
-- Continued expansion of our customer base and high retention rates
o Significant new contracts secured with 101 new clients (2021:
86) , including Secure Trust Bank, Telford & Wrekin Council and
the National Trust
o 1.4m employees in the UK workforce with access to one or more
of the Group's services (2021: 1.2m)
o High client and customer retention rates, evidencing the value
placed on our products
-- Increased Affordable Insurance sales provide basis for future growth
o Annualised Premium income up 15% to GBP28.0m (2021:
GBP24.4m)
o New insurance sales of GBP9.5m, up 157% (2021: GBP3.7m); at
the highest level seen since 2018, benefiting from investments in
our sales team.
o Claims ratios increased to 27.7% (2021: 24.5%) higher than
historic norms as hospital admittances and visits increased post
COVID-19 lockdowns. As the NHS continues to address long waiting
lists, we anticipate this continuing in the short to medium
term.
-- Benefits platform providing increased contribution to the Group
o Subscriptions for our enterprise platform, Hapi, gained
momentum with Annualised Recurring Revenue (ARR) increasing by 29%
to GBP2.0m (2021: GBP1.6m)
o Expansion into SME market also continued to grow at pace, with
Sage Employee Benefits, the Group's SME proposition, being taken to
market through Sage achieving gross ARR by end of 2022 of GBP3.0m
(2021: GBP1.6m) and 50,000 paying employees on the platform.
-- Challenging H2 for Let's Connect
o Consumer technology benefits business impacted by industrial
action within in its major client, compounding existing supply
chain availability and impacting its peak trading period, leading
to a goodwill impairment.
o Other clients performed well, emphasising the cost-of-living
benefit for employees in being able to spread the cost of
technology purchases without the interest charges and credit checks
they face on the High Street.
-- M&A adds to Pay & Reward division footprint
o Acquisition of Quintige Consulting Group in July 2022 presents
opportunities for cross-selling and adding new clients.
Confident Outlook
-- Growth in insurance book and increased levels of ARR provide
high levels of visibility of revenues for 2023. This, together with
investments in the development of the Hapi platform and expansion
of our Pay and Reward offering provide confidence in another
successful year
-- Trading has continued positively into the first quarter,
including good momentum in new insurance policy sales.
-- While cognisant of the ongoing economic challenges, the Board
looks to the future with a strong sense of optimism and confidence
in meeting market expectations for FY23.
* Adjusted EBITDA is defined as earnings before interest, tax,
depreciation, amortisation of intangible assets, goodwill
impairment, share-based payment expenses, corporate acquisition
costs and restructuring costs.
** Excluding goodwill impairment of Let's Connect of
GBP10.6m.
Deborah Frost, Chief Executive of Personal Group, commented:
"I have a great deal of satisfaction on looking back on a
pivotal year for Personal Group; we delivered a strong year of new
business development, insurance book growth and expansion in our
key market focus of Small and Medium Business. I am very proud of
how my team have rebuilt the business post the impact of the
pandemic, delivering double digit growth in many key areas of our
book of recurring revenue. Annualised Premium Income ends the year
15% ahead of last year's close, new client numbers are up 17% and
we have hit our Sage channel target of 50,000 paying employees from
2,800 companies.
"Our business is now significantly stronger and more diversified
than it was in 2019, our last year of full trading pre-pandemic.
Amidst an uncertain wider trading environment, the need for
organisations to look after their people has never been more
important, and whilst our core business plays a very important role
in our future, we have expanded our reach to different sectors of
the economy, widening our market opportunity for growth in the
future. We are now seeing the investments we have made in sales,
marketing and technology bearing fruit through the number of new
clients we are engaging with and delivering for. Whilst we have
planned for 2023 to be another difficult year for the economy, we
are confident our offer resonates with our target markets, and we
will continue to see growth over the forthcoming years."
An overview of the preliminary results from Deborah Frost, Chief
Executive, is available to watch here:
https://www.fmp-tv.co.uk/2023/03/28/personal-group-tvclip/
Personal Group Holdings will be hosting a webinar for private
investors on Friday 31 March at 12.00. If you would like to
register for the webinar, please follow this link:
https://www.investormeetcompany.com/personal-group-holdings-plc/register-investor
-S-
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
The Market Abuse Regulation (EU 596/2014) pursuant to the Market
Abuse (Amendment) (EU Exit) Regulations 2018. Upon the publication
of this announcement via a Regulatory Information Service ("RIS"),
this inside information is now considered to be in the public
domain.
For more information please contact:
Personal Group Holdings Plc
Deborah Frost / Sarah Mace Via Alma PR
Cenkos Securities Plc
Camilla Hume / Callum Davidson (Nominated Adviser) +44 (0)20 7397 8900
Russell Kerr (Sales)
Alma PR
Caroline Forde +44 (0)20 3405 0205
Joe Pederzolli personalgroup@almapr.co.uk
Kinvara Verdon
Notes to Editors
Personal Group Holdings Plc (AIM: PGH) is a workforce benefits
and services provider. The Group enables employers across the UK to
improve employee engagement and support their people's physical,
mental, social and financial wellbeing. Its vision is to create a
brighter future for the UK workforce.
Personal Group provides health insurance services and a broad
range of employee benefits, engagement, and wellbeing products. Its
offerings can also be delivered through its proprietary app, Hapi,
and the recently developed extension to the platform, Hapiflex.
The Group's growth strategy is centred around widening the
footprint of the business into the SME, talent-led & Public
Sectors, thereby expanding the addressable customer base. In
addition, it aims to grow in its existing industrial heartlands, to
re-invigorate growth in insurance policyholders and to drive the
use of its SaaS offerings.
Group Clients include: Airbus, B & Q, Barchester Healthcare,
British Transport Police, The Prince's Trust, Randstad, Royal Mail
Group, The Royal Mint, the Sandwell & Birmingham NHS Trust,
Stagecoach Group plc, and The University of York.
For further information on the Group please see
www.personalgroup.com
CHAIR STATEMENT
I am pleased to report on a year of progress, in which the team
have again delivered on our strategic and financial objectives. The
strength of trading in the second half of the year underpins our
confidence that we are now firmly back on a growth trajectory, set
to benefit from the investments we have made in our offering and
team.
It is evident to me that the team takes great pride in our role
in supporting people's physical, mental, social and financial
wellbeing, working together to achieve our vision: to create a
brighter future for the UK workforce. This clear sense of purpose,
with a passion for clients, partners and the people within the
business, has stood Personal Group in good stead through the
economic challenges of recent years, and we have emerged a stronger
and more diversified business as a result. I would like to thank
the team for their continued hard work and embodiment of the
Company's values.
Achieving growth
We have successfully delivered growth across a number of our
KPIs, increasing our total client numbers and reporting double
digit growth in key areas of our recurring revenue.
Of particular note in the year was the reinvigoration of the
insurance sales model which had been so affected by the pandemic.
Recruiting the right people, training, and getting them back in to
see clients was by no means a simple task and has been achieved
exceptionally well, exemplified by the consecutive record new
insurance sales achieved in November and December. Whilst this
investment in the field sales team impacts our profits in the short
term the benefits of the resultant growth in the insurance book
will be seen in future years.
Across the benefits platform we won new customers and secured
valuable new partners, including the signing of a multi-year
extension to our engagement with Sage to power the Sage Employee
Benefits platform which is reflective of the success of our
partnership to date. Following its establishment several years ago,
momentum accelerated in 2022, resulting in an increased gross
Annualised Recurring Revenue of GBP3.0m (2021: GBP1.6m) with
c50,000 paying employees on the platform at the end of the year and
we are confident that this will continue to be a growth engine for
the business.
The acquisition of Quintige Consulting Group Limited ("QCG") in
July has enhanced the Group's overall pay and reward offering and
consolidated the Group's position as a leading provider of employee
services in the UK. Integration of the QCG team into our
organisation is progressing well and we are already benefiting from
shared knowledge and activities.
We are, of course, not immune to the disruption taking place
across the UK, whether that be strikes or ongoing supply chain
issues. As described in our trading update issued in January 2023,
our consumer technology business, Let's Connect, had a challenging
second half of the year, as a result of the industrial action
taking place at its major client. This continued action has had
implications as we have moved into the start of 2023, and as a
result, the current salary sacrifice technology scheme we run with
them is no longer appropriate for them in its current format.
Whilst not reflective of our overall offering, taken alongside
continued uncertainties around supply chain and ongoing margin
pressures, in undertaking our annual impairment review of the
goodwill held from the acquisition of Let's Connect in 2014, we
have made the prudent decision to fully impair the GBP10.6m of
goodwill created on acquisition. Whilst this has impacted our
statutory profit before tax for the year it is a non cash item and
does not affect the financial strength of the business.
We are all cognisant of operating within an inflationary
environment and the management team have negotiated this well,
through the careful management of resources and considered
investment. With inflation set to remain high throughout 2023, we
will continue to carefully balance the investment in the business
with profitable growth.
A strengthened team
Personal Group places the success and happiness of people at its
heart, demonstrated by the very nature of our offering. Internally,
this ethos has seen the business maintain our high staff retention
rates, whilst also supporting the hiring of additional talented
senior managers to strengthen the team as well as the introduction
of the QCG team in July. In April, we welcomed Ciaran Astin to the
Board as Non-Executive Director. Ciaran brings with him a wealth of
sales, digital and marketing experience.
ESG
As a Board, we are committed to high standards of ESG and made
good progress against our stated objectives during the year,
building on our existing foundation of responsible business
practice. We have made progress in reducing our carbon footprint,
fostering an inclusive, progressive and diverse working environment
and ensuring a robust corporate governance framework, all enhancing
our wider Environmental, Social and Governance (ESG) strategy.
It is in the area of societal good that we believe we can have
the most positive impact, both through our own actions and
providing the tools for our customers to similarly effect change.
You can read more on these efforts within the ESG section of our
Annual Report.
A growing market
The need for organisations to look after their people has never
been more important. Caring for health, wellbeing, and building a
sense of community is crucial to modern companies and represents
the ongoing opportunity for Personal Group. In this current
macroeconomic environment, there are few, if any, markets about
which one can be so optimistic and we look forward to capitalising
on the opportunity.
Dividend
I am pleased to announce that the Board has recommended a final
ordinary dividend of 5.3 pence per share which will be paid to
shareholders on 18 May 2023. This makes a total ordinary dividend
for 2022 of 10.6 pence per share. The Board has considered the
level of dividend in the context of the non-cash impairment of
goodwill, alongside the underlying growth seen during the year and
continued confidence in the Group's business model and
prospects.
Outlook
With the impact of the pandemic now largely behind us, and with
the growth we have seen in our key areas of recurring revenue, our
focus now is on taking Personal Group onto the next stage of growth
and we have entered 2023 on the front foot, benefiting from the
strong end to FY22. The growth in our insurance book, investments
in our Hapi platform and expansion of our Pay and Reward offering
all provide confidence in another successful year.
While cognisant of the ongoing economic challenges, we look to
the future with a strong sense of optimism and remain committed to
the continued execution of our strategy.
Martin Bennett
Non-Executive Chair
27 March 2023
CEO STATEMENT
I have a great deal of satisfaction on looking back on a pivotal
year for Personal Group. In 2022, we came out of the pandemic and
built on 2021's work in the restarting of the engine of the
business. We have delivered a strong year of new business
development, insurance book growth and expansion in our key market
focus of Small and Medium Business.
In a year when many businesses have issued profit warnings,
political turbulence has spilled over into financial markets and
inflation has deeply affected many people in the UK, I am very
proud of how my team have been rebuilding the business with double
digit growth in many key areas of our book of recurring revenue.
Annualised Premium Income ends the year 15% ahead of last year's
close, new client numbers are up 17% and we have hit our Sage
channel target of 50,000 paying employees from 2,800 companies.
Sales and Operational Review
Affordable insurance
2022 was always going to be a year of lower profit, primarily
because our historical normal investment in our field sales
insurance team has been set against lower premium values, as a
result of the pandemic. Slightly higher claims ratios this year
were expected against previous years of low NHS activity but have
remained stable. However, this has been a year of bests: best
annual individual performance ever by a field sales colleague, best
ever month in November 2022, and best ever December in 2022. Our
new insurance sales of GBP9.5m were up 157% on 2021 and at the
highest level seen since 2018. These achievements are set against a
backdrop of industrial action and staff shortages in our clients,
which means our site visits have to be professional and credible in
building employee engagement for our clients, as well as offering
key insurances for our policyholders. Over 50% of client employees
that we present our insurance policies to choose to buy our
insurances on the day we meet them which emphasises the value
perceived in our products. The majority of our policyholders elect
to pay through their payroll on a weekly or monthly basis, these
policies typically have a lifetime value of around five years - so
business written in 2022 builds momentum for the future.
Benefits platform
Our new business and account management teams for Enterprise
clients have also had success this year. Our overall client
retention rate remains extremely high for the benefits business
where we retained 164 clients in year (95% retention) and added 22
new ones.
The five-year deal signed with Sage in February highlights the
value that both partners place on the relationship, with us hitting
our target of 50,000 paying employees by the end of 2022. This
shows growth of +87% from GBP1.6m ARR end 2021 to GBP3.0m ARR end
2022. We are now actively seeking other external partners, to widen
our reach, and build further ARR streams.
Pay and reward
Since the acquisition of QCG in July 2022, the Pay and Reward
division has continued to develop, with cross selling of Innecto
Digital and Hapi platforms, and bringing on of new clients. The
division now serves 174 active clients, although as is the nature
of consultancy, these clients cyclically move on, as projects are
completed. We have been pleased with the retention of Innecto
Digital products, covering Job Evaluation, Pay Benchmarking and Pay
Review software. Our blended retention rate is 87% against a target
of 75%, with 12 new clients added.
Other owned benefits: Let's Connect
Let's Connect has experienced a challenging year: the backdrop
of industrial unrest in their biggest client affected our marketing
campaigns as well as the ability of striking workers to afford new
technology items. We have recognised that this will impact this
area of the business going forwards and accordingly have determined
to take a prudent approach and fully impaired the value of goodwill
associated with it as a result of its acquisition in 2014.
Notwithstanding this, other Let's Connect clients have performed
well, emphasising the cost-of-living benefit for employees in being
able to spread the cost of technology purchases, without the direct
interest charges and credit checks that they face on the High
Street. Some stock shortages have affected sales in the year, but
this has significantly improved in comparison to the last couple of
years.
Future outlook
Our business is now significantly stronger and more diversified
than 2019, our last year of trading pre-pandemic. Previously the
business mainly operated in our heartlands of lower wage,
hourly-paid employees; food production, transport, care homes,
warehousing and distribution. Whilst our core business plays a very
important role in our future, as we set out in our strategic
roadmap in 2019, we have expanded our reach to different sectors of
the economy - SMEs, the public and ex-public sectors, and salaried
employees in the private sector. This widens the Group's platform
and market opportunity for growth in the future, and our investment
in sales and marketing and technology is now bearing fruit in the
number of new clients we are engaging with and delivering for.
Underlying organic growth in 2022 will lead to increased EBITDA in
2023 and beyond, as our business model is mainly based on recurring
contracts, whether with SMEs, insurance policyholders or our major
Enterprise clients.
We also continue to search for acquisitive growth that will
increase shareholder value. Alongside the small acquisition made
in-year, we have continued to review selected acquisition
opportunities against a clearly defined criteria of identifying
businesses that would be capable of adding complementary,
earnings-accretive non-organic growth.
Whilst we have planned for 2023 to be another difficult year for
the economy, trading in 2023 has started positively and we are
confident our offer resonates with our target markets, and we will
continue to see growth over the forthcoming years.
Deborah Frost
Group Chief Executive
27 March 2023
CFO STATEMENT
Group revenue
Group revenue for the year increased 16% to GBP86.7m (2021:
GBP74.5m) reflecting growth across all areas of the business, with
the exception of the Other Owned Benefits division (Let's
Connect).
With COVID-19 lockdowns, which impacted our ability to carry out
our traditional face-to-face selling of insurance, firmly behind
us, our insurance segment returned to growth as anticipated and as
at 31 December 2022 we have an insurance book of GBP28.0m
Annualised Premium Income (API) (31 December 2021 GBP24.4m), the
majority of which is renewable on weekly or monthly rolling
contracts.
External income from our internally developed Benefits Platform
increased by over 45% year on year, following on from the 40%
growth seen in the previous year. This growth is a result of our
continued expansion into the SME sector through our partnership
with Sage and growth in our own HAPI platform sales. Growth in our
pay and reward segment reflected the acquisition of Quintige
Consulting Group (QCG) at the start of the second half of the year
but also growth in consultancy income and digital subscription
income in Innecto. Annualised Recurring Revenue (ARR) across all
the Group's digital platforms now stands at GBP5.6m (2021:
GBP3.6m).
Sales of technology and other products to employers as part of
their employee benefit provision through the Group's subsidiary,
Let's Connect, fell short of 2021, primarily as a result of
industrial action in its key client impacting its peak trading
period in Q4.
Income from voucher resale through the benefits platform also
grew significantly in the year and, whilst this predominantly
represents pass-through revenue, it does continue to demonstrate
the value that our Benefits Platform provision can bring to our
clients and their employees.
Adjusted EBITDA*
Adjusted EBITDA* for the year was GBP6.0m (2021: GBP6.1m).
Adjusted EBITDA remained in line with last year but reflected a
changing mix in contribution from the various business areas.
As anticipated, we saw a reduced contribution from the insurance
business, as we invested heavily in the acquisition costs of the
field sales team as it re-established itself to pre-Covid levels.
Offsetting this we saw increased contribution from both our Pay
& Reward and Benefits Platform businesses in line with their
increased revenues, with the contribution from Other Owned Benefits
remaining broadly flat year on year. Outside of the core segments,
group administration and central costs reduced in line with a
return to more normalised levels of sales and marketing spend.
We believe adjusted EBITDA* remains the most appropriate measure
of performance for our business, reflecting the underlying
profitability of the business and removing the impact of one-off
items arising from past acquisitions on the Group's reported profit
before tax. The definition remains unchanged from previous
years.
Loss before and after tax
Statutory loss before tax for the year was GBP6.8m (2021: profit
of GBP4.3m). This reflects an operating profit of GBP3.8m together
with a GBP10.6m impairment charge relating to the goodwill balance
associated with Lets Connect. Despite the profitability of Lets
Connect being maintained at a similar level to 2021, the operating
landscape at its key client has changed and the current salary
sacrifice technology scheme they run is no longer appropriate for
them in its current format. As a result the future revenue stream
for this area of the business has significantly changed and an
impairment charge has been registered. The tax charge for the year
was GBP0.5m (2021: GBP0.7m), and loss after tax for the year
GBP7.3m (2021: profit of GBP3.6m).
Excluding the non-cash impairment charge the profit before tax
is GBP3.8m.
EPS
Resulting earnings per share was (23.1p) (2021: 11.5p);
excluding the non-cash impairment charge this would have been
10.6p.
Dividend
The Board has recommended a final ordinary dividend of 5.3 pence
per share, making a total ordinary dividend for 2022 of 10.6 pence
per share. The final ordinary dividend will be paid on 18 May 2023
to members on the register as at 11 April 2023 (the record date).
Shares will be marked ex-dividend on 6 April 2023. The last day for
elections will be on 25 April 2023. The Board has considered the
level of dividend in the context of the non-cash impairment of
goodwill, alongside the underlying growth seen during the year and
the continued confidence in the Group's business model and
prospects.
Balance sheet
As at 31 December 2022 the Group's balance sheet remained
strong, with cash and deposits of GBP18.7m (2021: GBP22.9m) and no
debt. This reduction reflects both the cGBP1m purchase of QCG and a
GBP1.5m equity investment (valued at GBP1.3m within Financial
Investments) alongside investment of cGBP1m in our proprietary
software. The Group's main underwriting subsidiary, Personal
Assurance Plc (PA), continues to maintain a conservative solvency
ratio of 333% (unaudited), with a GBP8.1m surplus over its Solvency
Capital Requirement of GBP3.5m. The Company has consistently
maintained a prudent position in relation to its Solvency II
requirement. Personal Assurance (Guernsey) Limited, the Group's
subsidiary which underwrites the death benefit policy, also
maintained a healthy solvency ratio of 312% (unaudited), under its
own regime.
Segmental Results (see note 1)
The Group reports across four core segments as detailed in the
table below.
For each of the segments, the adjusted EBITDA* contribution
comprises the gross profit of that segment together with any costs
associated directly with the operation of that segment. Sales and
marketing costs and other central costs that are not directly
attributable to a segment, such as Finance, HR, depreciation,
amortisation and Group Board expenses are not allocated to a
segment and are shown separately as 'Group Admin & Central
Costs'.
We believe this presentation provides transparency to enable the
impact of top line growth on adjusted EBITDA* contribution for each
area of the business to be better understood.
Segment Description Income Streams
==================================== ===================================
Pay & Reward Provision of a full reward Consultancy, industry surveys
service to employers through and digital platform subscriptions
the Group's pay and reward
subsidiaries, Innecto and QCG
==================================== ===================================
Benefits Platform Provision of a benefits platform Digital platform subscriptions,
to employers both directly commissions from third party
(Hapi) and through channel benefits which sit on the
partners, currently Sage for platform
our SME solution
==================================== ===================================
Affordable Insurance A directly owned benefit, provision Premium income
of simple insurance products
underwritten by Group subsidiaries
==================================== ===================================
Other Owned Benefits Other directly owned benefits: Retail sales directly to
sale of technology and other employers, commission received
products to employers as part from the introduction of
of their employee benefit provision third-party finance
through the group's subsidiary,
Let's Connect
==================================== ===================================
Pay & Reward: Innecto
Innecto's strong performance in 2021 continued into 2022, with
consultancy income up 34% as the battle for talent continued and
demand from HRDs looking to retain and attract their employees
increased. Digital subscription income from its proprietary HR
solutions also increased by 19% on the previous year. Annualised
Recurring Revenue on these products stood at GBP0.5m as at 31
December 2022 (2021: GBP0.4m).
The acquisition of QCG in July 2022 also added to the Group's
Pay & Reward offering with the expectations set out at
acquisition achieved in the second half of the year. Whilst
operating in a similar market to Innecto, QCG operates in different
market sectors, has a strong presence in pay surveys and provides
opportunities to cross sell across both client bases.
Collectively this division achieved revenue of GBP2.0m (2021:
GBP1.2m) and EBITDA of GBP0.5m (2021: GBP0.3m) of which QCG
contributed GBP0.4m of revenue and GBP0.1m of EBITDA post
acquisition.
Benefits Platform
Revenue from digital platform subscriptions and commissions from
third party benefit suppliers which sit on the benefits platform
rose to GBP4.8m in 2022 (2021: GBP3.3m).
Subscriptions for our enterprise platform, Hapi, gained momentum
in 2022 with ARR on the platform increasing by 29% to GBP2.0m
(2021: GBP1.6m) during the course of the year and are expected to
benefit further in 2023 with the refined and refreshed Hapi
2.0.
Our expansion into the SME market also continued to grow at
pace, with Sage Employee Benefits, the Group's SME proposition
being taken to market through its partner Sage. Having signed a new
five-year contract in February 2022 and with an updated version of
the platform to be launched in 2023, we are anticipating further
growth in its ARR which stood at GBP3.0m at the end of the year
(2021: GBP1.6m).
As at 31 December 2022 the ARR from Benefits Platform
subscriptions across all channels stood at GBP5.0m (2021:
GBP3.2m).
Adjusted EBITDA contribution of GBP2.9m (2021: GBP2.1m)
increased in line with increased revenue but also demonstrates the
increased margins available as this area of the business scales
up.
Affordable Insurance
Premium income from the Group's core insurance business
increased by GBP0.6m to GBP25.3m (2021: GBP24.7m).
The strong opportunity for our face-to-face sales activity,
driven by employers wishing to re-engage with their workforce post
COVID-19, has given opportunity to rebuild the sales team and grow
the insurance book back towards levels seen pre-COVID. GBP9.5m of
new insurance sales were written during the year (2021: GBP3.7m)
which together with continued strong retention rates for existing
policyholders meant that as at 31 December 2022 we have GBP28.0m
(2021: GBP24.4m) of Annualised Premium Income, the majority of
which are renewable on weekly or monthly rolling contracts.
Claims ratios for the year increased to 27.3% (2021: 24.5%)
higher than historic norms as hospital admittances and visits
increased post COVID-19 lockdowns. As the NHS starts to address
their long waiting lists, we anticipate this continuing in the
short to medium term.
Adjusted EBITDA contribution of GBP9.0m for the year (2021:
GBP11.0m), reflects the increased premiums and claims costs but
also the increased acquisition costs of the field sales team as we
invested heavily to re-establish it at pre-Covid levels. The
benefit of the related new insurance sales will be seen in future
years.
Other Owned Benefits: Let's Connect
Let's Connect, which provides technology and other products to
employers as part of their employee benefit provision, saw revenues
decrease to GBP16.8m (2021: GBP18.2m), although margin improvements
helped mitigate the impact on its EBITDA contribution of GBP0.7m
(2021: GBP0.7m). The industrial action which took place at its key
client in the second half of the year impacted its peak trading
period in Q4 and has led to full impairment of the GBP10.6m
goodwill balance associated with its acquisition at group
level.
Group Administration Expenses and Central Costs
Group administration and central costs of GBP7.1m (2021:
GBP8.2m) reflected a return to a more normalised level of sales and
marketing spend post the additional investment made in 2021
alongside a reduced level of bonus costs.
Sarah Mace
Chief Financial Officer
27 March 2023
Consolidated Income Statement
2022 2021
GBP'000 GBP'000
Gross premiums written 25,660 25,050
Outward reinsurance premiums (138) (163)
Change in unearned premiums (254) (208)
Change in reinsurers' share
of unearned premiums (11) (9)
(_________) (_________)
Earned premiums net of reinsurance 25,257 24,670
Employee benefits and services
income 23,627 22,753
Voucher resale income 37,389 26,852
Other income 237 215
Investment income 145 23
(_________) (_________)
Revenue 86,655 74,513
(_________) (_________)
Claims incurred (6,990) (6,049)
Insurance operating expenses (6,619) (4,860)
Employee benefits and services
expenses (22,236) (22,370)
Voucher resale expenses (37,368) (26,894)
Other expenses (33) 82
Group administration expenses (8,973) (9,779)
Share based payments expenses (291) (169)
Unrealised losses on equity
investments (210) -
Charitable donations (100) (100)
(___________) (___________)
Expenses (82,820) (70,139)
(___________) (___________)
Operating profit 3,835 4,374
Finance costs (20) (32)
Impairment of Goodwill (10,575) -
(_________) (_________)
(Loss) / Profit before tax (6,760) 4,342
Tax (493) (745)
(_________) (_________)
(Loss) / Profit for the year (7,253) 3,597
The loss for the year is attributable to equity holders of
Personal Group Holdings Plc
Earnings per share Pence Pence
Basic (23.2) 11.5
Diluted (23.2) 11.5
There is no other comprehensive income for the year and, as a
result, no statement of comprehensive income has been produced. All
operations are classed as continuing activities.
Consolidated Balance Sheet at 31 December 2022
2022 2021
GBP'000 GBP'000
ASSETS
Non-current assets
Goodwill 2,684 12,696
Intangible assets 2,384 1,637
Property, plant and equipment 4,639 5,033
(_________) (_________)
9,707 19,366
(__) (______) (________)
Current assets
Financial assets 3,031 2,596
Trade and other receivables 15,863 14,035
Reinsurance assets 95 108
Inventories - Finished Goods 726 898
Cash and cash equivalents 16,958 20,291
Current tax assets 229 310
(_________) (_________)
36,902 38,238
(___) (______) (_________)
Total assets 46,609 57,604
(__________) (__________)
Consolidated Balance Sheet at 31 December 2022
2022 2021
GBP'000 GBP'000
EQUITY
Equity attributable to equity
holders
of Personal Group Holdings
Plc
Share capital 1,562 1,561
Share premium 1,134 1,134
Share based payment reserve 367 158
Capital redemption reserve 24 24
Other reserve (55) (32)
Profit and loss reserve 27,946 38,436
(_________) (_________)
Total equity 30,978 41,281
(_________) (_________)
LIABILITIES
Non-current liabilities
Deferred tax liabilities 681 478
Trade and other payables 130 402
Current liabilities
Trade and other payables 11,346 12,356
Insurance contract liabilities 3,474 3,087
(_________) (_________)
14,820 15,443
(_________) (_________)
(_________) (_________)
Total liabilities 15,631 16,323
(_________) (_________)
(_________) (_________)
Total equity and liabilities 46,609 57,604
(_________) (_________)
Consolidated Statement of Changes in Equity for the year ended
31 December 2022
Equity attributable to equity holders of Personal Group Holdings
Plc
Share Share Capital Share Other Profit Total
capital Premium redemption Based reserve and loss equity
reserve Payment reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at
1 January
2021 1,561 1,134 24 158 (32) 38,436 41,281
(________) (______) (______) (______) (______) (________) (________)
Dividends - - - - - (3,310) (3,310)
Employee
share-based
compensation - - - 271 - 20 291
Proceeds of
SIP* share
sales - - - - - 11 11
Cost of SIP
shares sold - - - - 20 (20) -
Cost of SIP
shares
purchased - - - - (43) - (43)
LTIP Options
Exercised 1 - - (62) - 62 1
(________) (________) (________) (________) (________) (________) (________)
Transactions
with owners 1 - - 209 (23) (3,237) (3,050)
(________) (________) (________) (________) (________) (________) (________)
Profit for
the year - - - - - (7,253) (7,253)
(________) (________) (________) (________) (________) (________) (________)
(________) (_______) (________) (________) (________) (________) (________)
Balance as at
31 Dec 2022 1,562 1,134 24 367 (55) 27,946 30,978
(________) (______) (______) (________) (__________) (_________) (_________)
* PG Share Ownership Plan (SIP)
Consolidated Statement of Changes in Equity for the year ended
31 December 2021
Equity attributable to equity holders of Personal Group Holdings
Plc
Share Share Capital Share Other Profit Total
capital Premium redemption Based reserve and loss equity
reserve Payment reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at
1
January 2021 1,561 1,134 24 - (21) 38,076 40,774
(________) (______) (______) (______) (______) (________) (________)
Dividends - - - - - (3,244) (3,244)
Employee
share-based
compensation - - - 158 - 11 169
Proceeds of
SIP*
share sales - - - - - 24 24
Cost of SIP
shares
sold - - - - 28 (28) -
Cost of SIP
shares
purchased - - - - (39) - (39)
(________) (________) (________) (________) (________) (________) (________)
Transactions
with
owners - - - 158 (11) (3,237) (3,090)
(________) (________) (________) (________) (________) (________) (________)
Profit for
the year - - - - - 3,597 3,597
(________) (________) (________) (________) (________) (________) (________)
(________) (_______) (________) (________) (________) (________) (________)
Balance as at
31
Dec 2021 1,561 1,134 24 158 (32) 38,436 41,281
(________) (______) (______) (________) (__________) (_________) (_________)
* PG Share Ownership Plan (SIP)
Consolidated Cash Flow Statement
2022 2021
GBP'000 GBP'000
Net cash from operating activities
(see next page) 3,240 7,588
(__________) (__________)
Investing activities
Additions to property, plant and equipment (332) (236)
Additions to intangible assets (1,196) (981)
Proceeds from disposal of property, plant and
equipment 39 1
Proceeds from disposal of financial assets 871 -
Purchase of financial assets (1,517) (9)
Interest received 145 23
Acquisition of QCG (812) -
(__________) (__________)
Net cash used in investing activities (2,802) (1,202)
(__________) (__________)
Financing activities
Proceed from issue of shares 1 -
Interest paid - 2
Purchase of own shares by the SIP (54) (35)
Proceeds from disposal of own shares
by the SIP 21 20
Payment of lease liabilities (429) (427)
Dividends paid (3,310) (3,244)
(__________) (__________)
Net cash used in financing activities (3,771) (3,684)
(__________) (__________)
Net change in cash and cash equivalents (3,333) 2,702
Cash and cash equivalents, beginning
of year 20,291 17,589
(__________) (__________)
Cash and cash equivalents, end of
year 16,958 20,291
(_________) (_________)
Consolidated Cash Flow Statement 2022 2021
GBP'000 GBP'000
Operating activities
Profit after tax (7,253) 3,597
Adjustments for
Depreciation 1,052 966
Amortisation of intangible assets 786 585
Goodwill impairment 10,575 -
Profit on disposal of property, plant
and equipment 12 11
Realised and unrealised investment
losses 210 -
Interest received (145) (23)
Interest charge 20 32
Share-based payment expenses 291 169
Taxation expense recognised in income
statement 493 745
Changes in working capital
Trade and other receivables (1,637) 4,280
Trade and other payables (1,010) (1,817)
Inventories 172 (37)
Taxes paid (326) (920)
(__________) (__________)
Net cash from operating activities 3,240 7,588
(_________) (_________)
Notes to the Financial Statements
1 Segment analysis
The segments used by management to review the operations of the
business are disclosed below.
1) Affordable Insurance
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.
Personal Assurance (Guernsey) Limited (PAGL), a subsidiary
within the Group, is regulated by the Guernsey Financial Services
Commission and has been underwriting death benefit policies since
March 2015.
This operating segment derives the majority of its revenue from
the underwriting by PA and PAGL of insurance policies that have
been bought by employees of host companies via bespoke benefit
programmes. During 2020 PAGL began underwriting employee default
insurance for a proportion of LC customers.
2) Other Owned Benefits
This segment constitutes any goods or services in the benefits
platform supply chain which are owned by the Group. At present this
is made up of technology salary sacrifice business trading as PG
Let's Connect, purchased by the Group in 2014.
3) Benefits and Platform
Revenue this segment relates to the annual subscription income
and other related income arising from the licensing of Hapi, the
Group's employee benefit platform. This includes sales to both the
large corporate and SME sectors.
4) Pay and Reward
Pay and Reward refers to the trade of the Group's pay and reward
consultancy Company Innecto, purchased in 2019, and QCG, purchased
in 2022. Revenue in this segment relates to consultancy, surveys,
and licence income derived from selling digital platform
subscription.
5) Other
The other operating segment consists exclusively of revenue
generated by Berkely Morgan Group (BMG) and its subsidiary
undertakings along with any investment and rental income obtained
by the Group. This segment also includes revenue generated from the
resale of vouchers.
Segment analysis 2022 2021
GBP'000 GBP'000
Revenue by segment
------------------------------------------- ------------ ------------
Affordable Insurance 25,257 24,670
Other Owned Benefits 16,800 18,214
Benefits Platform 7,446 6,051
Benefits Platform - Group Elimination (2,627) (2,748)
Pay & Reward 2,008 1,236
------------------------------------------- ------------ ------------
Other Income
Voucher resale 37,389 26,852
Other 237 215
Investment income 145 23
(__________) (__________)
Group Revenue 86,655 74,513
(__________) (__________)
Adjusted EBITDA* contribution by segment
------------------------------------------- ------------ ------------
Affordable Insurance 9,032 11,012
Other Owned Benefits 664 730
Benefits Platform 2,866 2,098
Pay & Reward 495 303
------------------------------------------- ------------ ------------
Other 160 279
Group admin and central costs (7,107) (8,228)
Charitable Donations (100) (100)
(__________) (__________)
Adjusted EBITDA* 6,010 6,094
(__________) (__________)
Depreciation (1,052) (966)
Amortisation (786) (585)
Interest (20) (32)
Share Based Payments Expenses (291) (169)
Goodwill impairment (10,575) -
Corporate acquisition costs (46) -
(__________) (__________)
Profit before tax (6,760) 4,342
(__________) (__________)
2. Taxation comprises United Kingdom corporation tax of
GBP493,000 (2021: GBP745,000) including a deferred tax charge of
GBP122,000 (2021: GBP79,000)
3. The basic and diluted earnings per share are based on losses
for the financial year of GBP7,253,000 (2021: GBP3,597,000 profit)
and on 31,214,765 basic (2021: 31,205,375) and 31,969,989 diluted
(2021: 31,213,537) ordinary shares, the weighted average number of
shares in issue during the year.
4. The total dividend paid in the year was GBP3,310,000 (2021: GBP3,244,000)
This preliminary statement has been extracted from the 2022
audited financial statements that will be posted to shareholders in
due course. The statutory accounts for each of the two years to 31
December 2022 and 31 December 2021 received audit reports, which
were unqualified and did not contain statements under section 498
(2) or (3) of the Companies Act 2006. The 2021 accounts have been
filed with the Registrar of Companies but the 2022 accounts are not
yet filed.
Alternative Performance Measures
The Group uses an alternative (non-Generally Accepted Accounting
Practice (non-GAAP)) financial measure when reviewing performance
of the Group, evidenced by executive management bonus performance
targets being measured in relation to Adjusted EBITDA*. As such,
this measure is important and should be considered alongside the
IFRS measures.
For Adjusted EBITDA*, the adjustments taken into account in
addition to the standard IFRS measure, are those that are
considered to be non-underlying to trading activities and which are
significant in size. For example, goodwill impairment is a non-cash
item relevant to historic acquisitions; share-based payments are a
non-cash item which have historically been significant in size, can
fluctuate based on judgemental assumptions made about share price
and have no impact on total equity; corporate acquisition costs and
reorganisation costs are both one-off items which are not incurred
in the regular course of business.
This methodology is unchanged from previous years.
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END
MSCNKOBQNBKBONB
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