TIDMPGH
RNS Number : 7658R
Personal Group Holdings PLC
26 September 2017
26 September 2017
PERSONAL GROUP HOLDINGS PLC
("Personal Group", "Company" or "Group")
Interim Results
Six Months ended 30 June 2017
Personal Group Holdings Plc, a leading provider of employee
services in the UK announces its interim results for the six months
ended 30 June 2017. The Company has made a solid start to the year,
with the Group performing in-line with management's
expectations.
Highlights
Financial
-- Group revenue of GBP19.6m (2016: GBP19.8m)
-- EBITDA* from continuing operations of GBP3.7m (2016: GBP4.1m)
-- Profit before tax from continuing operations of GBP3.0m (2016: GBP3.1m)
-- Basic EPS from continuing operations of 8.2p (2016: 8.9p)
-- Balance sheet remains strong with cash and deposits of GBP16.5m and no debt
-- Dividends per share paid in the period up 3.2% to 11.35p
(2016: 11.0p), maintaining progressive dividend policy
Operational
-- Encouraging start to rollout of Sage Employee Benefits under a refined offer
-- Core insurance income remained strong
-- Hapi platform revenue increased to GBP0.9m (2016: GBP0.7m)
-- Clarity of technology salary sacrifice offer post Finance Bill ratification
* EBITDA is defined as earnings before interest, tax,
depreciation, amortisation of intangible assets, goodwill
impairment, share-based payment expenses, acquisition costs,
restructuring costs, write back of contingent consideration and
release of tax provision. This definition applies to all references
to EBITDA within these interim results. A reconciliation from PBT
to this adjusted EBITDA has been included in note 3.
Commenting, Mark Scanlon, Chief Executive of Personal Group,
said:
"We have seen a solid start to the year with the Company
performing in-line with management's expectations. We now have
greater clarity regarding the outlook of the salary sacrifice
market, which has enabled us to clarify our customer offering to
deliver a better client experience. The insurance business
performed well and delivered solid new sales KPIs and core
insurance revenue remained strong and slightly ahead of the first
half last year. We are seeing an encouraging start to the roll out
of our SME offer, under the refined strategy with Sage, with in
excess of 1,200 additional corporate customers having access to our
platform."
-S -
For more information please contact:
Personal Group Holdings Plc
Mark Scanlon / Mike Dugdale +44 (0)1908 605 000
Philip Dennis (Investor Relations) +44 (0)7947 868 206
Cenkos Securities Plc
Max Hartley / Callum Davidson (Nomad) +44 (0)20 7397 8900
Russell Kerr (Sales)
Hudson Sandler
Nick Lyon / Sophie Lister / Lucy Wollam +44 (0)20 7796 4133
Notes to editors:
Personal Group Holdings Plc (AIM: PGH) is a technology enabled
employee services business, working with employers to drive
productivity though better employee engagement and a more motivated
workforce. With over 30 years' experience, the Company provides
employee benefits and services to over 2 million employees across
the UK.
Personal Group's offer comprises 8,000 in-house and third party
products and services, from c.60 supply lines. In-house services
include employee insurance products (hospital, convalescence plans
and death benefit) and the provision of home technology via salary
sacrifice (iPads, computers, laptops, smart phones and smart TVs).
Third party services include retail discounts, e-payslips, employee
assistance programmes, wellbeing programmes and salary sacrifice
cars and bikes.
The offer is provided via the Company's proprietary technology
platform, Hapi. The platform is intuitive, designed primarily for
app deployment and also accessible via web and tablet, driving
better engagement, communication and value recognition. Hapi is
flexible and can quickly integrate additional services, such as
existing employee services and partner platforms. Hapi is a SaaS
product.
Through technology and select acquisitions, the Company has
grown its addressable market from 6m to over 30m UK employees;
including 15.6m SME employees targeted via its partnership with
Sage, the UK's largest software company.
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 offer compelling to blue
chip clients across the UK as a way of attracting, retaining and
motivating employees.
Personal Group has a strong client base across a range of
sectors including passenger transport, healthcare, logistics and
food manufacturing. Clients include: Stagecoach, Four Seasons
Health Care, Priory Group, Spire Healthcare, Bibby, 2 Sisters Food
Group and Young's Seafood.
For further information, please see www.personalgroup.com.
Interim Results Statement
Introduction
The first six months of 2017 have been as we forecast, with the
business performing in-line with management's expectations. The
Group's core insurance income continued to perform well,
complemented by a solid performance from PG Let's Connect and an
encouraging start to the SME offer under the Group's extended
strategy.
Through recent investments, particularly in the Hapi technology
platform, the Company remains well placed to extend its products
into a much wider market. With our combined market proposition,
including SME, public sector and large corporate, we believe that
our serviceable market has expanded from 6 million to 30 million
employees in the U.K. alone.
The Hapi platform not only simplifies Personal Group's product
offering through a single portal, making it easier to use for the
customer, it has also enabled us to evolve into a technologically
enabled employee services provider. This offering is underpinned by
a long-standing, solid insurance business, with a delivery system
and a flexibility that allows us to continue to meet ever-changing
market demands.
Business Review
The insurance business performed well, delivering solid new
sales KPIs, despite a lower number of sales executives in the
field. The core insurance revenue remained strong and slightly
ahead of the first half last year. The number of sales executives
was increased as we entered the second half of the year.
PG Let's Connect product proposition experienced uncertainty
last year as a consequence of HMRC's consultation regarding the
salary sacrifice market. During this period of uncertainty, the
Group focused on minimising the potential adverse impact to the PG
Let's Connect business. With the ratification of the Finance Bill
in April, there is now clarity around the HMRC's tax treatment for
salary sacrifice technology. The treatment is also now far simpler,
which supports a better client experience and understanding. PG
Let's Connect has quickly adjusted its systems and product offer to
reflect the changes resulting from the Finance Bill and is now
fully certified with a clearer offering to customers.
The Company's SME product began an additional rollout, through
Sage's standard payroll product, in early June. This was based on
further development of Hapi and the expansion of the relationship
with Sage. We are seeing greater penetration of the Sage Employees
Benefits (SEB) product across Sage's extensive payroll client base
with in excess of 1,200 additional corporate customers now having
SEB in place. This process provides a portion of the Sage client's
employees with SEB and with an option to extend it to all. This
process of extending the offer to all employees is not due to begin
until next year but the initial deployment is well under way.
The first half of the year also saw a marked increase in direct
SaaS sales of the Hapi platform, up 28% on last year. This result
is due to a growing recognition across corporate clients of the
value provided by the platform to support productivity and reduce
costs across their business, through a happier and better engaged
workforce.
As part of our drive to keep the wider offer relevant and up to
date, we have expanded our wellness offer to include a financial
education and well-being product. This includes fairer rate loans,
typically with a 3.9% to 9.9% APR. We have begun our first roll out
of these products, with more customers in the pipeline.
Financial Performance
As expected, revenue was broadly in-line with the first half of
last year at GBP19.6m. This was driven by a solid top line
performance across the business, with both the insurance business
and PG Let's Connect performing consistent with the first half of
2016, supported by a small but growing contribution from SME and
the SaaS subscriptions business units.
The Company continues to closely monitor costs, which during the
six months were broadly in-line with last year, despite the
broadening of the product offer through the launch of the SEB
product. With the addition of new recruits joining the business, to
support both sales and back office functions, the headcount, as
planned, will increase in the second half of the year.
EBITDA was in-line with management's expectations at GBP3.7m.
This result was driven by the impact of early losses in the ramp up
of the SME product and a lower contribution from Let's Connect.
Profit before tax was in line with the same period last year at
GBP3.0m.
In-line with its progressive dividend policy, the Company again
increased its dividend by 3.2% to 11.35p per share during the first
half. The third dividend for the year, of 5.675p, will be paid on
the 28th of September 2017.
Market
The market need for employee services is continuing to evolve.
This is being driven by an increased recognition, particularly
amongst corporates, of the value that an employee services
programme can bring to their businesses.
This evolution is creating demand for well thought through, well
managed and appealing programmes that drive direct business
benefits, supporting improved productivity and reducing cost
through better employee retention and engagement.
Reflecting this change, we are seeing a continued fall in
'single offer' providers, in favour of those looking to offer a
more comprehensive 'one stop' solution. Furthermore, the Company is
also seeing the traditional approach to customer engagement
changing, with greater focus on the buyer experience and the
flexibility to access the product whilst on the go through the Hapi
app. The manifestation of this has been to make the products and
offer far easier to understand, compare and access; more akin to a
traditional consumer product.
We believe that Personal Group is well placed to take advantage
of this change. Having invested ahead of the market and getting
that investment right in the Hapi technology platform, we are able
to offer the 'one-stop' solution to corporates. The platform also
provides the flexibility needed to ensure our offer remains up to
date and relevant.
Outlook
Personal Group's H1 2017 was in-line with management's
expectations. The insurance and Let's Connect businesses have
performed well and we have had an encouraging start to the SME
offer as part of continuing relationship with Sage. The board has
confidence that the Group continues to trade in-line with market
expectations for the full year.
Looking beyond 2017, we expect the market to continue to evolve,
which, given the breadth and flexibility built into our offer,
places Personal Group in a strong position to make continued solid
progress as the leading provider of employee services in the
UK.
Mark Winlow Mark Scanlon
Non-Executive Chairman Chief Executive
26 September 2017
Consolidated income statement
6 months 6 months 12 months
ended 30 ended 30 ended 31
June 2017 June 2016 December
Unaudited Unaudited 2016 Audited
Note GBP'000 GBP'000 GBP'000
Continuing Operations
Gross premiums written 15,033 15,654 31,393
Outward reinsurance
premiums (146) (138) (310)
Change in unearned premiums 442 1 160
Change in reinsurers'
share of unearned premiums (8) (19) (20)
(________) (________) (________)
Earned premiums net
of reinsurance 15,321 15,498 31,223
Other insurance related
income 159 264 555
IT salary sacrifice
income 3,141 3,196 20,069
Platform subscriptions
and other income 949 749 1,621
SME income 14 - -
Investment property - 30 59
Investment income 60 61 93
(________) (________) (________)
Revenue 19,644 19,798 53,620
(________) (________) (________)
Claims incurred (3,738) (3,739) (7,318)
Insurance operating
expenses (6,471) (6,428) (12,689)
Other insurance related
expenses (174) (352) (712)
IT salary sacrifice
expenses (3,908) (3,616) (18,281)
Platform subscriptions
and other expenses (1,433) (1,691) (2,795)
SME operating expenses (341) - (741)
Share based payment
expenses (156) (540) (222)
Charitable donations (50) (50) (100)
Amortisation of intangible
assets (329) (253) (505)
(________) (________) (________)
Expenses (16,600) (16,669) (43,363)
(________) (________) (________)
Operating profit from
continuing operations 3,044 3,129 10,257
Release of provision - - 270
Share of profit/(loss)
of equity-accounted
investee net of tax (17) (12) (6)
(________) (________) (________)
Profit before tax from
continuing operations 3,027 3,117 10,521
Tax 4 (516) (473) (1,479)
(________) (________) (________)
Profit for the period
from continuing operations 2,511 2,644 9,042
Profit/(loss) from discontinued
operation 23 (1,181) (1,758)
(________) (________) (________)
Profit for the period
after tax 2,534 1,463 7,284
(________) (________) (________)
Consolidated income statement (continued)
6 months 6 months 12 months
ended 30 ended 30 ended 31
June 2017 June 2016 December
Unaudited Unaudited 2016 Audited
Earnings per share as
arising from total operations Pence Pence Pence
Basic 8.2 4.8 23.9
Diluted 8.1 4.5 23.4
Earnings per share as
arising from continuing
operations
Basic 8.2 8.9 29.7
Diluted 8.0 8.2 29.0
Consolidated statement of comprehensive income
6 months 12 months
6 months ended ended 31
ended 30 30 December
June 2017 June 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit for the period 2,534 1,463 7,284
Other comprehensive income
Available for sale financial
assets:
Valuation changes taken
to equity 56 (81) (6)
Reclassification of
(gains)/losses on available
for sale financial assets
on derecognition (26) 19 24
Income tax on unrealised
valuation
changes taken to equity (6) 8 (8)
(_______) (_______) (_______)
Total comprehensive income
for the period 2,558 1,409 7,294
(_______) (_______) (_______)
Consolidated balance sheet at 30 June 2017
At 31
At 30 At 30 December
June 2017 June 2016 2016
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Goodwill 6 10,575 10,575 10,575
Intangible assets 7 1,233 1,321 1,478
Property, plant and
equipment 8 4,921 5,080 5,096
Investment property 1,070 1,070 1,070
Equity-accounted investee 11 627 634 639
Financial assets 9 6,219 8,139 6,137
Deferred tax asset 27 550 3
(________) (________) (________)
24,672 27,369 24,998
(________) (________) (________)
Current assets
Trade and other receivables 6,029 9,711 20,200
Reinsurance assets 290 307 310
Inventories 169 1,304 428
Cash and cash equivalents 11,112 7,608 7,206
(________) (________) (________)
17,600 18,930 28,144
(________) (________) (________)
Total assets 42,272 46,299 53,142
(________) (________) (________)
Consolidated balance sheet at 30 June 2017
At 31
At 30 At 30 December
June 2017 June 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
EQUITY
Equity attributable
to equity holders of
Personal Group Holdings
plc
Share capital 1,540 1,527 1,540
Capital redemption
reserve 24 24 24
Amounts recognised
directly into equity
relating to non-current
assets held for sale 54 (34) 30
Other reserve (303) (309) (330)
Profit and loss reserve 30,166 29,070 31,061
(________) (________) (________)
Total equity 31,481 30,278 32,325
(________) (________) (________)
LIABILITIES
Current liabilities
Provisions 1,905 2,190 1,912
Trade and other payables 5,681 10,589 15,426
Insurance contract
liabilities 2,721 3,143 3,239
Current tax liabilities 484 99 240
(________) (________) (________)
10,791 16,021 20,817
(________) (________) (________)
(________) (________) (________)
Total liabilities 10,791 16,021 20,817
(________) (________) (________)
(________) (________) (________)
Total equity and liabilities 42,272 46,299 53,142
(________) (________) (________)
Consolidated statement of changes in equity for the six months
ended 30 June 2017
Available
Capital for sale Profit
Share redemption financial Other & loss Total
capital reserve assets reserve reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at
1 January 2017 1,540 24 30 (330) 31,061 32,325
(________) (________) (________) (________) (________) (________)
Dividends - - - - (3,490) (3,490)
Employee share-based
compensation - - - - 85 85
Proceeds of AESOP*
share sales - - - - 28 28
Cost of AESOP
shares sold - - - 52 (52) -
Cost of AESOP
shares purchased - - - (25) - (25)
Nominal value
of LTIP** shares
issued - - - - - -
(________) (________) (________) (________) (________) (________)
Transactions with
owners - - - 27 (3,429) (3,402)
(________) (________) (________) (________) (________) (________)
Profit for the
period - - - - 2,534 2,534
Other comprehensive
income
Available for
sale financial
assets:
Change in fair
value of assets
classified as
held for sale - - 56 - - 56
Transfer to income
statement - - (26) - - (26)
Current tax on
unrealised valuation
changes taken
to
equity - - (6) - - (6)
(________) (________) (________) (________) (________) (________)
Total comprehensive
income for the
period - - 24 - 2,534 2,558
(________) (_______) (_______) (_______) (_______) (_______)
Balance as at
30 June 2017 1,540 24 54 (303) 30,166 31,481
(________) (________) (________) (________) (________) (________)
* All Employee Share Option Plan (AESOP)
** Long Term Incentive Plan (LTIP)
Consolidated statement of changes in equity for the year ended
31 December 2016
Available
Capital for sale Profit
Share redemption financial Other & loss Total
capital reserve assets reserve reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at
1 January 2016 1,518 24 20 (386) 30,687 31,863
(________) (________) (________) (________) (________) (________)
Dividends - - - - (6,697) (6,697)
Employee share-based
compensation - - - - 213 213
Proceeds of AESOP*
share sales - - - - 103 103
Cost of AESOP
shares sold - - - 95 (95) -
Cost of AESOP
shares purchased - - - (39) - (39)
Nominal value
of LTIP** shares
issued 22 - - - (22) -
(________) (________) (________) (________) (________) (________)
Transactions with
owners 22 - - 56 (6,498) (6,420)
(________) (________) (________) (________) (________) (________)
Profit for the
year - - - - 7,284 7,284
Deferred tax reserve
movement - - - - (412) (412)
Other comprehensive
income
Available for
sale financial
assets:
Change in fair
value of assets
classified as
held for sale - - (6) - - (6)
Transfer to income
statement - - 24 - - 24
Current tax on
unrealised
valuation changes
taken to
equity - - (8) - - (8)
(________) (________) (________) (________) (________) (________)
Total comprehensive
income for the
year - - 10 - 6,872 6,882
(________) (________) (________) (________) (________) (________)
Balance as at
31 December 2016 1,540 24 30 (330) 31,061 32,325
(________) (________) (________) (________) (________) (________)
Consolidated statement of changes in equity for the six months
ended 30 June 2016
Available
Capital for sale Profit
Share redemption financial Other & loss Total
capital reserve assets reserve reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at
1 January 2016 1,518 24 20 (386) 30,687 31,863
(________) (________) (________) (________) (________) (________)
Dividends - - - - (3,338) (3,338)
Employee share-based
compensation - - - - 296 296
Proceeds of AESOP*
share sales - - - - 66 66
Cost of AESOP
shares sold - - - 95 (95) -
Cost of AESOP
shares purchased - - - (18) - (18)
Nominal value
of LTIP** shares
issued 9 - - - (9) -
(________) (________) (________) (________) (________) (________)
Transactions with
owners 9 - - 77 (3,080) (2,994)
(________) (________) (________) (________) (________) (________)
Profit for the
period - - - - 1,463 1,463
Other comprehensive
income
Available for
sale financial
assets:
Change in fair
value of assets
classified as
held for sale - - (81) - - (81)
Transfer to income
statement - - 19 - - 19
Current tax on
unrealised valuation
changes taken
to
equity - - 8 - - 8
(________) (________) (________) (________) (________) (________)
Total comprehensive
income for the
period - - (54) - 1,463 1,409
(________) (_______) (_______) (_______) (_______) (_______)
Balance as at
30 June 2016 1,527 24 (34) (309) 29,070 30,278
(________) (________) (________) (________) (________) (________)
* All Employee Share Option Plan (AESOP)
** Long Term Incentive Plan (LTIP)
Consolidated cash flow statement
6 months 6 months 12 months
ended ended ended 31
30 30 December
June 2017 June 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Net cash from operating
activities (see opposite) 7,489 4,810 6,395
(______) (______) (______)
Investing activities
Additions to property,
plant and equipment (70) (412) (828)
Additions to intangible
assets (85) (214) (624)
Proceeds from disposal
of property, plant and
equipment 17 117 231
Purchase of financial
assets (97) (35) (139)
Proceeds from disposal
of financial assets 105 984 3,177
Interest received 14 47 53
Dividends received 20 10 20
(______) (______) (______)
Net cash from investing
activities (96) 497 1,890
(______) (______) (______)
Financing activities
Purchase of own shares
by the AESOP (25) (18) (39)
Proceeds from disposal
of own shares by the
AESOP 28 66 66
Dividends paid (3,490) (3,338) (6,697)
(______) (______) (______)
Net cash used in financing
activities (3,487) (3,290) (6,670)
(______) (______) (______)
Net change in cash
and cash equivalents 3,906 2,017 1,615
Cash and cash equivalents,
beginning of period 7,206 5,591 5,591
(_______) (_______) (_______)
Cash and cash equivalents,
end of period 11,112 7,608 7,206
Consolidated cash flow statement
6 months 6 months 12 months
ended ended ended 31
30 30 December
June 2017 June 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Operating activities
Profit after tax 2,534 1,463 7,284
Adjustment for:
Depreciation 225 215 448
Amortisation of intangible
assets 329 253 505
Profit on disposal of
property, plant and equipment 2 7 61
Realised and unrealised
net investment losses/(profits) (60) 31 17
Interest received (14) (47) (53)
Dividends received (20) (10) (20)
Share of (profit) / loss
of equity-accounted investee,
net of tax 12 12 6
Share-based payments 85 296 222
Taxation expense recognised
in income statement 516 474 1,479
Changes in working
capital:
Trade and other receivables 14,191 12,264 1,772
Trade and other payables (10,269) (8,816) (4,171)
Inventories 259 (914) (38)
Taxes paid (301) (418) (1,117)
(______) (______) (______)
Net cash from operating
activities 7,489 4,810 6,395
(______) (______) (______)
Notes to the consolidated financial statements
1 General information
The Group is principally engaged in transaction employee
services, including insurance products and the provision of salary
sacrifice technology products in the UK.
The Company is a limited liability 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 is listed on the Alternative Investment Market 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 2016.
The financial information for the year ended 31 December 2016
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 2016
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 25 September
2017.
2 Accounting policies
These June 2017 interim consolidated financial statements of
Personal Group Holdings Plc are for the six months ended 30 June
2017. 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 2016.
Notes to the consolidated financial statements
These financial statements have been prepared in accordance with
IFRS standards and IFRIC interpretations as adopted by the EU,
issued and effective as at 31 December 2016.
The principal accounting policies have remained unchanged from
the year ended 31 December 2016.
3 Segment analysis
The Group operates the following four continuing operating
segments:
1) Core 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.
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.
2) IT Salary Sacrifice
IT salary sacrifice refers to the trade of Lets Connect, a
salary sacrifice technology company purchased in 2014.
3) SME
SME has been classified as a separate segment as the development
and expansion into the SME market is currently managed and
maintained as a separate activity to Core Insurance and Other.
Revenue in this sector is based on a SaaS model for products that
combines insurance and employee benefit platform income or employee
benefit platform income only.
4) Other
The other operating segment consists exclusively of revenue
generated by Personal Management Solutions (PMS) and Berkeley
Morgan Group (BMG) and its subsidiary undertakings.
PMS is an employee benefit company that offers a variety of
employee incentive schemes normally via annual subscriptions and
includes income generated from the Hapi platform.
BMG was acquired by PGH in January 2005 and generates commission
via financial services and private medical insurance. On 9 February
2016 the Group signed an agreement with AXA PPP healthcare to
transfer the PMI business over to them in a phased approach between
July 2016 and June 2017. The group continued to underwrite policies
until each policy's renewal date, from which date AXA PPP
healthcare now provides continuous cover.
Notes to the consolidated financial statements
The discontinued segment is:
Mobile
Mobile refers to the trade of Personal Group Mobile Limited, a
mobile phone salary sacrifice company set up from the trade and
assets of shebang Technologies purchased in 2015.
The revenue and net result generated by each of the Group's
operating segments are summarised as follows,
Group
IT Salary Continuing Discontinued
Core Insurance Sacrifice SME Other Operations - Mobile
Operating segments GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
6 months to June
2017
Revenue
Earned premiums
net of reinsurance 15,321 - - - 15,321 -
Other insurance
related income (28) - - 187 159 -
Non-insurance
related income - 3,141 14 949 4,104 56
Investment property - - - - - -
Investment income - - - 60 60 -
(_________) (_________) (_________) (_________) (_________) (_________)
15,293 3,141 14 1,196 19,644 56
Total revenue (_________) (_________) (_________) (_________) (_________) (_________)
Net result for
period before
tax 3,641 (949) (340) 675 3,027 23
LC - Amortisation
of intangibles - 165 - - 165 -
Share based payments - - - 156 156 -
Depreciation 127 14 75 9 225 -
Amortisation (other) 147 17 - - 164 -
EBITDA 3,915 (753) (265) 840 3,737 23
(_________) (_________) (_________) (_________) (_________) (_________)
Segment assets 22,748 4,707 - 14,788 42,243 29
(_________) (_________) (_________) (_________) (_________) (_________)
Segment liabilities 6,190 3,113 - 1,223 10,526 265
(_________) (_________) (_________) (_________) (_________) (_________)
Depreciation and
amortisation 274 196 75 9 554 -
(_________) (_________) (_________) (_________) (_________) (_________)
Notes to the consolidated financial statements
IT Salary Continuing Discontinued
Core Insurance Sacrifice SME Other - Group - Mobile
Operating segments GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2016
Revenue
Earned premiums
net of reinsurance 31,223 - - - 31,223 -
Other insurance
related income (14) - - 569 555 -
Non-insurance related
income - 20,069 - 1,621 21,690 2,024
Investment property - - - 59 59 -
Investment income - - - 93 93 -
(_________) (_________) (_________) (_________) (_________) (_________)
31,209 20,069 - 2,342 53,620 2,024
Total revenue (_________) (_________) (_________) (_________) (_________) (_________)
Net result for
year before tax 8,399 1,712 (741) 1,151 10,521 (1,758)
PG mobile - Reorganisation
costs - - - - - 571
LC - Tax provision - (270) - - (270) -
LC - Amortisation
of intangibles - 330 - - 330 -
Share based payments - - - 222 222 -
Depreciation 376 18 4 21 419 30
Amortisation (other) 136 16 22 - 174 -
EBITDA 8,911 1,806 (715) 1,394 11,396 (1,157)
(_________) (_________) (_________) (_________) (_________) (_________)
Segment assets 21,931 16,345 521 14,320 53,117 125
(_________) (_________) (_________) (_________) (_________) (_________)
Segment liabilities 6,483 13,353 - 899 20,735 139
(_________) (_________) (_________) (_________) (_________) (_________)
Depreciation and
amortisation 512 364 26 21 923 30
(_________) (_________) (_________) (_________) (_________) (_________)
Notes to the consolidated financial statements
IT Salary Discontinued
Sacrifice SME Continuing -
Core Insurance GBP'000 GBP'000 Other - Group Mobile
Operating segments GBP'000 GBP'000 GBP'000 GBP'000
6 months to June
2016
Revenue
Earned premiums
net of reinsurance 15,498 - - - 15,498 -
Other insurance
related income (5) - - 269 264 -
Non-insurance
related income - 3,196 - 749 3,945 1,165
Investment property - - - 30 30 -
Investment income - - - 61 61 -
(_________) (_________) (_________) (_________) (_________) (_________)
15,493 3,196 - 1,109 19,798 1,165
Total revenue (_________) (_________) (_________) (_________) (_________) (_________)
Net result for
period before
tax 3,769 (426) - (226) 3,117 (1,181)
PG mobile - Reorganisation
costs - - - - - 260
LC - Amortisation
of intangibles - 165 - - 165 -
Share based payments - - - 540 540 -
Depreciation 177 9 - 10 196 19
Amortisation (other) 82 6 - - 88 -
EBITDA 4,028 (246) - 324 4,106 (902)
(_________) (_________) (_________) (_________) (_________) (_________)
Segment assets 24,371 6,219 - 14,573 45,163 1,136
(_________) (_________) (_________) (_________) (_________) (_________)
Segment liabilities 7,406 6,069 - 1,809 15,284 705
(_________) (_________) (_________) (_________) (_________) (_________)
Depreciation and
amortisation 259 180 - 10 449 19
(_________) (_________) (_________) (_________) (_________) (_________)
Income is derived from the UK and Guernsey
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 period ended 30 June 2017
was 17.0% (six months period ended 30 June 2016: 15.2%).
Notes to the consolidated financial statements
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 6 months 12 months
ended 30 EPS ended 30 EPS ended 31 EPS
June 2017 Pence June 2016 Pence December 2016 Pence
-------- ---------- ------ ---------- ------ -------------- ------
Basic 30,741,056 8.2 30,350,608 4.8 30,442,426 23.9
-------- ---------- ------ ---------- ------ -------------- ------
Diluted 31,397,670 8.1 32,790,147 4.5 31,189,872 23.4
-------- ---------- ------ ---------- ------ -------------- ------
During the first six months of 2017, Personal Group Holdings Plc
paid dividends of GBP3,490,000 to its equity shareholders (six
months to 30 June 2016: GBP3,338,000, twelve months to 31 December
2016: GBP6,697,090). This represents a payment of 11.35p per share
(six months to 30 June 2016: 11.00p, twelve months to 31 December
2016: 22.00p).
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 6 months 12 months 12 months
ended ended ended 6 months 6 months ended
30 June 30 June 31 December ended 30 ended 30 31 December
2017 2016 2016 June 2017 June 2016 2016
Pence per share GBP'000 GBP'000 GBP'000
Equity dividends
Ordinary shares
paid in period
March 5.675 5.500 5.50 1,748 1,670 1,671
June 5.675 5.500 5.50 1,748 1,675 1,674
September - - 5.50 - - 1,683
December - - 5.50 - - 1,683
(______) (______) (______)
3,496 3,345 6,711
Less: amounts
paid on own
shares (6) (7) (14)
(_____) (_____) (______) (______) (______) (______)
11.35 11.00 22.00 3,490 3,338 6,697
(_____) (_____) (______) (______) (______) (______)
Notes to the consolidated financial statements
6 Goodwill
For the six months ending 30 June 2017
Let's
BMG Connect Total
GBP'000 GBP'000 GBP'000
Cost
At 1 January 2017 9,433 10,575 20,008
Additions in the
year - - -
(________) ________ (________)
At 30 June 2017 9,433 10,575 20,008
(________) (________) (________)
Amortisation and
impairment
At 1 January 2017 9,433 - 9,433
Impairment charge
for year - - -
________ ________ ________
At 30 June 2017 9,433 - 9,433
(________) (________) (________)
Net book value at
30 June 2017 - 10,575 10,575
(________) (________) (________)
Net book value at
31 December 2016 - 10,575 10,575
(________) (________) (________)
7 Intangible assets
For the six months ending 30 June 2017
Computer Internally
software Generated
LC Customer and website Computer
Value development Software Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January
2017 1,648 665 428 2,741
Additions in
the year - 85 - 85
Disposals - (89) - (89)
(________) (________) (________) (________)
At 30 June 2017 1,648 661 428 2,737
(________) (________) (________) (________)
Amortisation
and impairment
At 1 January
2017 935 316 12 1,263
Amortisation
charge for period 165 93 71 329
Disposals in
the Period - (88) - (88)
(________) (________) (________) (________)
At 30 June 2017 1,100 321 83 1,504
(________) (________) (________) (________)
Net book value
at 30 June 2017 548 340 345 1,233
(________) (________) (________) (________)
Net book value
at 31 December
2016 713 349 416 1,478
(________) (________) (________) (________)
Notes to the consolidated financial statements
8 Property, plant and equipment
For the six months ended 30 June 2017
Freehold Furniture Leasehold
land and Motor Computer fixtures improve-
properties vehicles equipment & fittings ments Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January
2017 5,478 214 1,090 1,179 31 7,992
Additions - - 26 44 - 70
Disposals - - (272) (12) - (284)
(______) (______) (______) (______) (______) (______)
At 30 June 2017 5,478 214 844 1,211 31 7,778
(______) (______) (______) (______) (______) (______)
Depreciation
At 1 January
2017 1,505 42 754 580 15 2,896
Provided in the
period 47 18 95 63 2 225
Eliminated on
disposals - - (255) (9) - (264)
(______) (______) (______) (______) (______) (______)
At 30 June 2017 1,552 60 594 634 17 2,857
(______) (______) (______) (______) (______) (______)
Net book amount
at 30 June 2017 3,926 154 250 577 14 4,921
(______) (______) (______) (______) (______) (______)
Net book amount
at 31 December
2016 3,973 172 336 599 16 5,096
(______) (______) (______) (______) (______) (______)
Notes to the consolidated financial statements
9 Financial assets
At 30 At 30 At 31 December
June June 2016
2017 2016 Audited
Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Bank deposits 5,386 7,449 5,365
Investment Bond 100 100 100
Financial assets:
Available for sale 733 590 672
(________) (________) (________)
6,219 8,139 6,137
(_________) (_________) (_________)
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.
Bank deposits, also held at amortised cost, are due within 6
months.
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.
Notes to the consolidated financial statements
10 Long Term Incentive Plan (LTIP)
LTIP 1:
During 2012 the company adopted a discretionary Long Term
Incentive Plan (LTIP 1) for the benefit of selected Directors and
senior employees of Personal Group.
The Plan provided 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 are satisfied in shares or at the
discretion of the Remuneration Committee, wholly or partly in cash
in accordance with the Plan rules. It is the Remuneration
Committee's intention to settle these awards in shares.
A participant is 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 was
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 is 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 of the relevant %
entitlement. The number of shares awarded will be determined by
dividing the amount of appropriate payment by the market value (as
defined by the Plan rules) of the shares on the relevant
anniversary date.
As LTIP 1 started to mature at the end of 2016, in July 2015 a
further scheme (LTIP 2) was put in place from 30 July 2015 (see
below). In conjunction with the introduction of this scheme LTIP 1
was amended to:
- Include a maximum cap on market capitalisation of GBP183.7m
- Grant options rather than shares at each vesting date such
that the PAYE and NI liabilities will only arise at the date of the
exercise of the option.
A further amendment to the scheme was made in November 2016 when
the duration was extended from 5 years to 6 years for Mark Scanlon
and Andy Lothian, who had entered the scheme in November 2011. In
addition, during 2017, the end date of the scheme was extended to
30 April 2018 for both Andy Lothian and a further senior employee
who entered the scheme in July 2012.
An amount of GBPnil has been charged to the profit and loss
account for this scheme in the six months ended 30 June 2017 (six
months ended 30 June 2016: GBP296,000) 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. The corresponding credit
is taken to equity. No liabilities were recognised as this is an
equity settled share-based payment.
Notes to the consolidated financial statements
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 reduced by
GBP147,000
- If the share price were to increase at a slower rate than
assumed the charge for the period would have increased by
GBPnil
LTIP 2:
As with LTIP 1, LTIP 2 is designed to reward Directors and
certain other senior employees in a way that aligns the interest of
the LTIP participants with the interests of shareholders, as well
as with the Group's long term strategic plan. As is the case with
LTIP 1, LTIP 2 is Market Capitalisation based and becomes reward
bearing above a Company Market Capitalisation of GBP183.7m. It also
has a yearly EPS performance criterion through its life which can
be adjusted by the Remuneration Committee.
Under the LTIP2 incentive arrangements 36,000 employee
shareholder status shares in Personal Group Limited were awarded
during 2015 (ESS Shares). Participants had immediate PAYE and NIC
charges on the associated market value of the ESS Shares. A further
4,000 shares are available for allocation.
The ESS Shares are split equally into four classes, namely A,B,C
and D shares, each of which carry a put option which allows the
participants to exchange their ESS Shares for Personal Group
Holdings Plc ordinary shares in tranches on reaching or exceeding
the hurdles of market capitalisation and Annual EPS. Awards can be
made annually starting in March 2017 (A shares) through to March
2020 (D shares) based on market capitalisation growth of the
Company up to a market capitalisation of GBP350m and upon achieving
the Annual EPS growth targets. The awards will be paid out as 20%,
40%, 70% and 100% cumulatively of the eligible share of growth in
market capitalisation for A, B, C and D shares respectively.
An amount of GBP76K has been charged to the profit and loss
account in the six months ended June 2017 (six months ended June
2016: GBP90,000) for this scheme based on the fair values
determined by using a Log-normal Monte-Carlo stochastic model.
Significant inputs to the model include the closing share price at
grant date, a risk free rate of return of 1.32%, a dividend yield
of 4.49% and a share price volatility of 15.78%. 10,000 iterations
of the model were run to accurately represent the log-normal nature
of returns to equity investments. The corresponding credit is taken
to equity. No liabilities were recognised as this is an equity
settled share based payment.
In addition to the charges above the related employers national
insurance charge has been classified as share based expenses on the
face of the profit and loss account.
Notes to the consolidated financial statements
11 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 profit and loss account and balance sheet for this joint
venture company are as follows:
Profit and loss account 12 months
6 months 6 months ended 31
ended 30 ended 30 December
June 2017 June 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Rent receivable 24 11 38
Administration expenses (58) (35) (55)
(________) (________) (________)
Operating loss (34) (24) (17)
(________) (________) (________)
Loss on ordinary activities
before taxation (34) (24) (17)
Tax on profit on ordinary
activities - - 4
(________) (________) (________)
Loss for the financial
period retained (34) (24) (13)
(________) (________) (________)
Personal Group Holdings
share of loss (17) (12) (6)
(________) (________) (________)
Notes to the consolidated financial statements
Balance sheet 12 months
6 months 6 months ended 31
ended 30 ended 30 December
June 2017 June 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Current assets
Inventories 1,082 1,126 1,123
Debtors 198 338 183
(________) (________) (________)
1,280 1,464 1,306
Creditors: amounts
falling due within
one year (27) (197) (28)
(________) (________) (________)
Net current assets 1,253 1,267 1,278
(________) (________) (________)
Capital and reserves
Called up share capital - - -
Profit and loss account 1,253 1,267 1,278
(________) (________) (________)
Shareholders' funds 1,253 1,267 1,278
(________) (________) (________)
Personal Group Holdings
share of net assets 627 634 639
(________) (________) (________)
12 Financial calendar for the year ending 31 December 2017
The company announces the following dates in its financial
calendar for the year ending 31 December 2017:
-- Preliminary results for the year ending 31 December 2017 - March 2018
-- Publication of Report and Accounts for 2017 - March 2018
-- AGM - April 2018
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAXNSAALXEFF
(END) Dow Jones Newswires
September 26, 2017 02:00 ET (06:00 GMT)
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