29 January 2015
Hansard Global plc
New business results for the six months ended 31 December 2014
Hansard Global plc ("Hansard" or "the Group"), the specialist long-term savings provider, issues its new business results for the six months ended 31 December 2014. All figures refer to the six months ended 31 December 2014 ("H1 2015"), except where indicated.
Summary
· In line with our strategic plan we have successfully entered into business relationships with a number of new significant IFA networks and other institutions in our target markets. Plans are being implemented which will provide a platform for sustainable and diversified new business flows;
· New business in Q2 2015 is approximately 13% higher than the £13.8m PVNBP reported in Q1 2015, reflecting increased interest in the Group's products;
· We have seen a particularly encouraging response in the Middle East and Africa region - which accounted for £4.0m PVNBP basis for the first half of the year;
· New business in H1 2015 is £29.4m PVNBP, which is approximately 47% lower than the prior year. The comparison is adversely affected by the business introduced by the Japanese distributor that suspended its operations in October 2013;
· Our estimate of the Group's exposure, including professional costs, in relation to the issue of Chargeable Events Certificates announced in FY 2014, remains unchanged at £5.0m;
· There has been no material change in the litigation against Hansard Europe. Writs totalling approximately £5.2m remain outstanding (30 June 2014: £5.2m).
Gordon Marr, Group Chief Executive Officer, commented:
"Since the launch of our strategic plan last year, we have entered into 53 new relationships with IFA networks. We anticipate that these new relationships will begin to deliver increased levels of profitable new business, and diversify our exposure across a range of distributors and countries, in the second half of the financial year."
For further information:
Hansard Global plc +44 (0) 1624 688000
Gordon Marr, Group Chief Executive Officer
Vince Watkins, Chief Financial Officer
Bell Pottinger +44 (0) 20 3772 2500
Daniel de Belder
Hansard Global plc
New business results for the six months ended 31 December 2014
OVERVIEW
The Group continues to invest in distribution resources, Hansard OnLine, and other infrastructure to support its strategic plans. There has been increased interest in our products from both existing and new intermediaries which we believe will provide a platform for sustainable diversified new business flows in the latter part of this financial year and beyond. This interest is reflected in increased new business levels and, as a result, new business in Q2 2015 is approximately 13% above the level of Q1 2015, on the basis of PVNBP. In particular we are pleased with progress in the Middle East and Africa region.
STRATEGY IMPLEMENTATION
Following the launch of our revised strategy and new products in Q4 2014, market development activities have generated encouraging interest among Independent Financial Advisors and contract holders around the world. We have entered into business relationships with a number of significant IFA networks and other institutions in our target markets and, as a result, have added 53 new Terms of Business with networks.
We are confident that our newly-introduced products are well-tailored to the requirements of our target clients and we intend to extend our range of single premium products in February 2015.
To support the Group's strategic plans we have continued to identify and recruit skilled distribution resources. We believe that we now have appropriate resources to deliver our strategy.
New Business Flows
We continue to explore new business opportunities and strategic initiatives in our target markets. These activities, supported by the introduction of product-based incentive arrangements, the launch of new products, and by enhancements to Hansard OnLine, have underpinned new business flows in H1 2015. As a result, new business in Q2 2015 is approximately 13% above the level of £13.8m PVNBP reported in Q1 2015. We have seen a particularly encouraging response in the Middle East and Africa region - which accounted for £4.0m PVNBP for the first half of the year.
New business flows for Hansard International for H1 2015 on a range of metrics are summarised as follows. The comparison to H1 2014 is adversely affected by the business introduced by the Japanese distributor that suspended its operations in October 2013.
|
Three months ended |
|
Six months ended |
|
31 December |
|
31 December |
|
2014 |
2013 |
% |
|
2014 |
2013 |
% |
Basis |
£m |
£m |
change |
|
£m |
£m |
change |
Compensation Credit |
1.5 |
2.2 |
(31.8)% |
|
2.7 |
5.7 |
(52.6)% |
Present Value of New Business Premiums |
15.6 |
20.8 |
(25.0)% |
|
29.4 |
55.2 |
(46.7)% |
Annualised Premium Equivalent |
2.6 |
3.4 |
(23.5)% |
|
4.7 |
8.7 |
(46.0)% |
· Present Value of New Business Premiums ("PVNBP")
New business flows for Hansard International for H1 2015 on the basis of PVNBP are summarised as follows:
|
Three months ended |
|
Six months ended |
|
31 December |
|
31 December |
|
2014 |
2013 |
% |
|
2014 |
2013 |
% |
PVNBP by product type |
£m |
£m |
change |
|
£m |
£m |
change |
Regular premium |
9.9 |
16.5 |
(40.0)% |
|
17.6 |
44.4 |
(60.4)% |
Single premium |
5.7 |
4.3 |
32.6% |
|
11.8 |
10.8 |
9.3% |
Total |
15.6 |
20.8 |
(25.0)% |
|
29.4 |
55.2 |
(46.7)% |
|
Three months ended |
|
Six months ended |
|
31 December |
|
31 December |
|
2014 |
2013 |
% |
|
2014 |
2013 |
% |
PVNBP by geographical area |
£m |
£m |
change |
|
£m |
£m |
change |
Latin America |
5.3 |
7.9 |
(32.9)% |
|
11.1 |
16.6 |
(33.1)% |
Far East Middle East and Africa |
3.4 3.0 |
7.6 0.8 |
(55.3)% 275.0% |
|
7.1 4.0 |
26.4 0.9 |
(73.1)% 344.4% |
Rest of World |
3.0 |
3.3 |
(9.1)% |
|
6.0 |
6.1 |
(1.6)% |
EU and EEA |
0.9 |
1.2 |
(25.0)% |
|
1.2 |
5.2 |
(76.9)% |
Total |
15.6 |
20.8 |
(25.0)% |
|
29.4 |
55.2 |
(46.7)% |
Regular premium new business reported above for the six months ended 31 December 2013 includes amounts totalling £10.9m introduced in Q1 2014 by the Japanese distributor that ceased its new business activities in October 2013.
· New business margins
Low volumes of new business impact directly on the Group's new business margins. The largely fixed nature of the expense base combined with low levels of new business resulted in a marginally negative new business margin in H1 2015.
Assets under Administration ("AUA")
The level of assets under administration of £0.92bn as at 31 December 2014is marginally below the position at 30 June 2014.
The value of AuA is based upon the assets selected by or on behalf of policyholders to meet their needs from time to time. Reflecting the wide geographical spread of the Group's policyholders, the majority of premium contributions and of AuA are designated in currencies other than sterling. The strengthening of those currencies against sterling in the quarter has contributed to market gains, despite recent weakening of global investment markets.
|
Three months ended |
|
Six months ended |
|
31 December |
|
31 December |
|
2014 |
2013 |
|
2014 |
2013 |
|
£m |
£m |
|
£m |
£m |
Deposits to investment contracts |
25.2 |
27.7 |
|
51.1 |
57.7 |
Withdrawals from contracts and charges |
(51.6) |
(54.4) |
|
(104.2) |
(101.9) |
Effect of market and currency movements |
16.6 |
12.3 |
|
33.2 |
2.0 |
|
(9.8) |
(14.4) |
|
(19.9) |
(42.2) |
Opening balance |
933.5 |
1,000.3 |
|
943.6 |
1,028.1 |
Assets under Administration at 31 December |
923.7 |
985.9 |
|
923.7 |
985.9 |
chargeable events certificates
Discussions with HMRC continue in order to finalise the Group's liability. We continue to estimate the Group's exposure, including professional costs, to be approximately £5.0m.
Litigation and policyholder complaints
The Group continues to carefully manage its litigation and other exposures in order to protect regulatory capital holdings and reduce uncertainty. Writs totalling approximately £5.2m remain outstanding against Hansard Europe at 31 December 2014 (30 June 2014: £5.2m).
Results for the half-year ENDED 31 December 2014
Trading results for the half-year are expected to be announced on 26 February 2015.
Outlook
Through the implementation of the Group's strategic plan and the introduction of new products, the Group will be better placed to deliver increased levels of profitable new business, and diversify its exposure across a range of distributors and countries, in the second half of this financial year.
Notes to editors:
· Hansard Global plc is the holding company of the Hansard Group of companies. The Company was listed on the London Stock Exchange in December 2006. The Group is a specialist long-term savings provider, based in the Isle of Man.
· The Group offers a range of flexible and tax-efficient investment products within a life assurance policy wrapper, designed to appeal to affluent, international investors.
· The Group utilises a controlled cost distribution model by selling policies exclusively through a network of independent financial advisors, and the retail operations of certain financial institutions who provide access to their clients in more than 170 countries. The Group's distribution model is supported by Hansard OnLine, a multi-language internet platform, and is scaleable.
· The principal geographic markets in which the Group currently services policyholders and financial advisors are the Far East, Latin America and the Middle East, in the case of Hansard International Limited, and Western Europe in the case of Hansard Europe Limited, the Group's two life assurance companies. Hansard Europe Limited closed to new business with effect from 30 June 2013.
· The Group's objective is to grow by attracting new business and positioning itself to adapt rapidly to market trends and conditions. The scaleability and flexibility of the Group's operations allow it to enter or develop new geographic markets and exploit growth opportunities within existing markets without the need for significant further investment.
· Following the closure of Hansard Europe Limited to new business with effect from 30 June 2013, the Group continues to report new business performance of Hansard International Limited alone within this document. Reporting of Assets under Administration incorporates cash flows relating to insurance policies issued by both Hansard International and Hansard Europe.
Forward-looking statements:
This announcement may contain certain forward-looking statements with respect to certain of Hansard Global plc's plans and its current goals and expectations relating to future financial condition, performance and results. By their nature forward-looking statements involve risk and uncertainties because they relate to future events and circumstances which are beyond Hansard Global plc's control. As a result, Hansard Global plc's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in Hansard Global plc's forward-looking statements. Hansard Global plc does not undertake to update forward-looking statements contained in this announcement or any other forward-looking statement it may make. No statement in this announcement is intended to be a profit forecast or be relied upon as a guide for future performance.
