TIDMPGH
RNS Number : 9531T
Personal Group Holdings PLC
26 March 2019
PERSONAL GROUP HOLDINGS PLC
("Personal Group", "Company" or "Group")
Preliminary Results For the Year Ended 31 December 2018
Another year of solid growth
Personal Group Holdings Plc, a leading provider of employee
services in the UK, is pleased to announce its Preliminary Results
for the year to 31 December 2018.
Highlights
Financial
-- Group revenue increased by 22% to GBP55.3m (2017: GBP45.2m)
-- Adjusted EBITDA* increased by 5.8% to GBP11.4m (2017: GBP10.8m)
-- Profit before tax increased by 7.4% to GBP10.2m (2017: GBP9.5m)
-- Earnings per share of 27.2p (2017: 26.9p)
-- Dividend increased by 1.3% to 23.0p
-- Strong balance sheet and no debt
Operational
-- Further year of strong new insurance sales, despite performance being impacted by GDPR
-- PG Let's Connect revenue increased by 33%, with client numbers increasing by 36%
-- SaaS related revenue increased by 229%, driven by the
increase in customer spend through the Hapi platform combined with
several new client wins, including some SaaS-only
-- Launched the Sage Employee Benefits (SEB) product to Sage's wider client base in Q4
-- Invested in sales and marketing to drive additional revenue opportunities
-- Accelerated plans to bring the supply chain in-house
Post period end
-- On 28(th) February, the Company acquired Innecto People
Consulting Limited for a cash consideration of GBP3.0m
-- In February 2019, the Company received information from HMRC
in relation to the PG Let's Connect tax provision which will result
in a further GBP0.5m being released in 2019
*Adjusted EBITDA is defined as earnings before interest, tax,
depreciation, amortisation of intangible assets, goodwill
impairment, share-based expense payments, corporate acquisition
costs, restructuring costs, write back of contingent consideration
and release of tax provision.
A reconciliation from PBT to this adjusted EBITDA can be seen in
note 1
Deborah Frost, Chief Executive of Personal Group, commented:
"2018 saw a good performance across the Group, with adjusted
EBITDA* of GBP11.4m broadly in line with market expectations,
reflecting the strength of the underlying business. We achieved
another year of strong new insurance sales whilst PG Let's Connect
showing clear signs of recovery, combined with continued growth in
SaaS revenue. This performance reflects investments made by the
Group which have strengthened our client offer, supported by our
proven team and ability to innovate to meet market needs. As we
move into 2019, we continue to be well placed to respond to the
opportunities being created.
"I would like to take the opportunity to thank the team at
Personal Group, clients and investors for the welcome I've received
since taking over as CEO a few weeks ago. I am very much encouraged
by what I have seen and look forward to building on the tremendous
contribution Mark Scanlon has made to the business."
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 in-house services including
employee insurance products (hospital, convalescence plans and
death benefit), 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 digital
Saas product.
Through technology and select acquisitions, the Company has
grown its addressable market from 6m to over 27m 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. The acquisition of Innecto in February 2019
allows Personal Group to engage with clients earlier in their
thinking around Pay and Reward, and to interact with a new base of
blue-chip and fast growth clients typically at HR Director and CEO
level.
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
For more information please contact:
Personal Group Holdings Plc
Deborah Frost
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 (Financial PR)
Nick Lyon / Sophie Lister / Lucy Wollam +44 (0)20 7796 4133
Chairman's Introduction:
Personal Group was founded 35 years ago and continues to be
successful - we are profitable, growing and, once again, increasing
our dividend to shareholders.
Over the years, our market has changed, and we have faced
external challenges both of which have required thoughtful and
sometimes rapid response. 2018 was no different. We achieved
success in all three of our divisions, with trading ahead of that
for the previous year, despite facing some strong headwinds. The
change in the laws relating to personal data (GDPR) and a
subsequent security issue at one of our major third-party suppliers
led to a notable short term impact on our business, that was
swiftly and efficiently resolved. Despite such challenges, we were
able to deliver results for the year broadly in line with market
expectations.
Personal Group is well placed to respond to the opportunities
being created within our market. We believe that we have a market
proposition that is unrivalled amongst our peers and a team with a
depth of proven experience. Having invested substantially in the
business, we are well positioned to capitalise on opportunities
presented by an adapting labour market, which continues to increase
focus on a positive employment culture.
As a Board and Company, it is our job to unlock that opportunity
and value. To that end, in February 2019 we acquired Innecto, a
leading independent pay and reward consultancy. This acquisition
both broadens the services Personal Group has to offer, as well as
strengthening our position across all our services with clients. We
can now offer much more to each of our clients, be they Innecto
clients, Personal Group clients or those new to the Group. That
investment is now in place and we look forward to seeing the
benefits of it as 2019 progresses and beyond. Our focus is on
driving additional sales.
Personal Group entered 2019 in very good health and I thank
everyone for their hard work. I would particularly like to thank
Mark Scanlon, our departing CEO, who joined us in 2012. Mark has
provided leadership and drive that has materially reshaped Personal
Group. His personal energy and enthusiasm were infectious and I
thank him for his dedication, passion and overall tremendous
contribution. We have, in our new CEO, Deborah Frost, another
highly talented individual who is perfectly placed to lead the
company in its 35th year and beyond.
Our opportunity is to exploit Personal Group's strengths - old
and new - and make 2019 a year worthy of significant
celebration.
Business Divisions
The Company's core insurance business continued to perform well
with strong new insurance sales achieved throughout the year. This
reflects the strength of the Company's insurance offer which
continues to resonate well with clients' employees. Five of the
last six years have seen record new insurance sales results, with
2018 very close to a best-ever performance. The offer comprises a
core hospital cash plan, a convalescence plan and a death benefit
plan.
The impact of GDPR in May 2018 resulted in clients delaying
their decision making, both in terms of existing business and
winning new clients. As the year progressed, the impact lessened as
clients became more familiar and comfortable with the legislation.
The core platform, Hapi, requires pre-loading of employee data to
operate most efficiently and the sensitivity of employers to
providing this information was significantly heightened, making the
decision process longer and more convoluted. The positive to this
is that we have met a very high standard and established stronger
ties with our customers as we have become an even more trusted
partner.
The security issues in the Company's third-party supply chain in
late 2018 also impacted our client relationships. The team
undertook immediate and effective remedial action to rectify
these.
The Company's strong technological capability through Hapi, its
proprietary platform, meant that it could effectively deal with the
inbound issue but not without some client impact.
These challenges had a knock-on effect on the Company's
insurance sales team and as such the Company exited the year with
fewer frontline sales people in the field. A core focus early in
2019 has been to grow the team, with a goal of recruiting and
training several new sales people as early in the year as possible.
Despite this challenge the team still saw around 160,000 employees
face-to-face in 2018.
The Company's SaaS business achieved very strong growth in 2018,
with related revenues increasing by 229% during the year, this
follows a 77% increase the year before. Revenue is being driven by
the increase in customer spend through the Hapi platform, which now
has over 320,000 active users, combined with several key client
wins, including St John Ambulance and Randstad. The last quarter of
the year saw a record day and month for spend though the Hapi
platform.
The Company delivered on plans to launch a standalone version of
the Sage Employee Benefits (SEB) offer to Sage's wider client base
in the fourth quarter. This was later than initially planned, due
to conflicting priorities within Sage, but early indications are
encouraging. Sage has dedicated sales people to support the offer
and a team from Personal Group has been onsite to assist and
provide background support. In December, Sage undertook an email
marketing campaign of the product to some 1,800 clients, which saw
significantly higher click through rates and interest than they
would normally expect.
The revised version of SEB reflects our improved understanding
of working alongside Sage and a better appreciation of the SME
market. Sage has reaffirmed its commitment to the offer despite the
changes they've made to their overall proposition. Sage cite
Personal Group as the perfect example of how to work with a
third-party supplier and are recommending that similar initiatives
should follow our lead.
The value opportunity to both Personal Group and Sage of SEB
remains significant and well worth pursuing. Sage remains a natural
channel partner for the Company, with established direct
relationships covering a very large percentage of UK SMEs.
Targeting this market via a channel partner is a cost effective and
efficient approach which, in the fullness of time, will also
provide additional opportunity to our insurance business as those
SMEs seek to take on our products. Sage's target customers span
their Payroll, Accounting, Enterprise and Payments businesses which
collectively interface with companies who employ some 16 million
people in the UK.
PG Let's Connect saw revenue increase 33% and client numbers
increased by 36% year on year. The business had a very strong start
to the year, benefitting from Royal Mail's decision to run the
offer to its employees consistently from March, helping to
alleviate the traditional reliance on the Christmas period. We are
seeing this pattern again in 2019.
In addition to the impact of GDPR, in the fourth quarter, a
number of clients from within the Government's Crown Commercial
Services purchasing framework deferred running the offer to their
employees in 2018 for internal logistical reasons. The Company will
see the benefit of the deferred business in 2019 and enters the
year with improved visibility.
PG Let's Connect is recovering, post the impact of the HMRC
review into Salary Sacrifice, albeit more slowly than we had hoped.
Of those customers served in the fourth quarter many outperformed
their forecast which, post the legislative changes, bodes well for
the future. In addition to its direct financial contribution, the
business supports the wider Group. It strengthens the overall
market proposition, creates cross-selling opportunities, opens new
markets, particularly within the Public Sector, and encourages
client retention.
Operations
Technology is key to the Group. It drives internal productivity,
brings our offer together via the Hapi platform and supports SaaS
revenue. Over the last five years the Company's core insurance team
has seen a 34% increase in productivity through the introduction of
technology. Client feedback from the revised app has been very
positive. The app is also driving additional client engagement,
supporting client retention and creating additional potential sales
opportunities for products like video doctor services and Reward
and Recognition.
During 2018, a key initiative was to rationalise the Company's
supply chain. This was accelerated in the second half of the year.
Accelerating the Company's plans required additional investment
during 2018 but brings forward advantages including much reduced
system risk and far greater data security. Bringing the supply
chain in house is expected to provide commercial benefit, including
additional revenue and improved margin.
The Company has also continued to invest in system security,
having adopted the OutSystems technology on which Hapi was
developed. In 2019 we have continued to invest, with a significant
upgrade to the system early in 2019.
A key point of contact and client relationship is our claims
function. During the year, the team again performed extremely well,
paying 76% of insurance claims within 72 hours. The Company has an
enviable record, with minimal complaints, which are sufficiently
few in number that each one is reviewed by a member of the Senior
Management Team.
Sales and Marketing
The Company delivered on plans to invest in its sales and
marketing functions during the year. This included the addition of
several new sales individuals, all from blue-chip software and
sector specific backgrounds, and a 35% increase in the marketing
team budget.
With the Company's offer and backend systems in place, the
investment in sales and marketing is to drive additional market
opportunities. Building on initiatives in 2017 and with the
expanded team and budget in place, the sales message has evolved,
and the approach has become again more targeted. It has also
created the capacity to undertake wider direct marketing
initiatives.
In addition to direct sales and marketing, the Company also
invested in its customer relations function during the year. The
aim of the investment is to further support client retention and
create additional sales opportunities through broader client
engagement.
Team
The performance of the Company is underpinned by the strength of
its employees and their commitment. This was demonstrated during
2018 in the way they reacted to the challenges we faced. Their
speed of reaction and dedication to the success of the business was
key in minimising any negative impacts.
Our Senior Management Team is very experienced and effective in
both the operational and, most importantly, the strategic running
of the company. As Deborah Frost, our new Chief Executive, begins
her new role it is clear to me that she will be well supported in
her future endeavours.
As part of our initiative to invest in our people, a long
overdue refurbishment of the Company's head office was completed in
the early part of 2019. Supported by improvements in our IT
systems, the refreshed office space affords a far better working
environment.
Market
The market for employee services remains strong and there are
signs that momentum will continue. Key drivers have included a
restricted labour market, with the commercial value of investing in
and retaining staff becoming increasingly evident. The uncertainty
surrounding Brexit raises concerns regarding hiring and retention
of skilled labour and has further reinforced this view. Employers
cannot rely on pay alone, especially at National Living Wage
levels, which has created a completely level playing field. Extra
value for employees in the form of easy access to valuable
discounts, home technology and face-to-face presentations on 'fair
deal' insurance services, helps employers improve employee
retention rates. The Company's increased focus on 'financial
wellness' plays to the strength of Hapi and our fair deal insurance
products.
Financials
Group revenue for the year increased 22% to GBP55.3m (2017:
GBP45.2m) with growth in all three business segments, despite the
challenges the Company faced in the latter part of the year as
detailed above.
Adjusted EBITDA for the year was GBP11.4m (2017: GBP10.8m),
including a beneficial impact of GBP0.4m due to the application of
IFRS16, relating to leases. The Company elected to be an early
adopter of IFRS16 to coincide with the replacement of the majority
of the Company car fleet in January 2018.
The key driver for the increase in adjusted EBITDA* was the
improved trading performance from PG Let's Connect of GBP0.9m. The
insurance business, which continues to contribute the majority of
Adjusted EBITDA*, was GBP0.2m down on last year, following slight
increases in the claims' ratio and overheads.
The Company continued to retain a prudent focus on costs, which
were below budget for the year but up on the prior year. The
increase in costs primarily related to the planned investment in
sales and marketing to drive additional sales opportunities and the
unplanned costs associated with accelerating the plans to bring the
third-party supply chain in-house.
Profit before tax was GBP10.2m during the year (2017: GBP9.5m).
Basic EPS increased to 27.2p (2017: 26.9p), representing the second
year of EPS growth.
The Company again maintained its progressive dividend policy,
paying a total dividend of 23p per share over the year (2017:
22.7p), representing a 1.3% increase over the prior year. The first
dividend of 2019, of 5.825p per share, is again in line with the
Company's commitment to a progressive dividend policy and
represents a 1.3% increase over the corresponding period in 2018.
The dividend will be paid to shareholders on 29(th) March 2019.
The Group's balance sheet remains strong, with cash and deposits
at the year end of GBP17.7m and no debt. The Company's main
underwriting subsidiary, Personal Assurance Plc, has a conservative
solvency ratio of 260% (unaudited), with a surplus over its
Solvency Capital Requirement of GBP6.9m.
Outlook
The challenges the Company faced in the latter part of 2018 are
expected to have some further effect in 2019. We also face a more
uncertain business environment with the full impact of Brexit still
unknown, however, the Company remains confident we will see further
progress in the year ahead.
We have created near and long-term opportunities for growth
which we are well placed to exploit and see potential opportunity
in this less predictable business environment. We will continue to
take a prudent approach to costs and maintain and nurture those
parts of the business that underpin it, including our core
insurance division.
2018 2017
GBP'000 GBP'000
Continuing Operations
Gross premiums written 31,445 30,739
Outward reinsurance premiums (231) (272)
Change in unearned premiums 28 233
Change in reinsurers' share
of unearned premiums (10) (21)
(_________) (_________)
Earned premiums net of reinsurance 31,232 30,679
Other insurance related income 218 391
IT salary sacrifice income 14,970 11,292
SaaS income 8,729 2,648
Other non-insurance income 115 106
Investment income 83 117
(_________) (_________)
Revenue 55,347 45,233
(_________) (_________)
Claims incurred (7,175) (6,780)
Insurance operating expenses (15,073) (14,239)
Other insurance related expenses (261) (244)
IT salary sacrifice expenses (13,851) (11,034)
SaaS costs (8,561) (2,459)
Share-based payment expenses (117) (192)
Charitable donations (100) (100)
Amortisation of intangible assets (661) (673)
(___________) (___________)
Expenses (45,799) (35,721)
(___________) (___________)
Operating profit from continuing
operations 9,548 9,512
Finance costs (148) -
Release of provisions 646 -
Share of profit/(loss) of equity-accounted
investee net of tax 164 (2)
(_________) (_________)
Profit before tax from continuing
operations 10,210 9,510
Tax (1,819) (1,486)
(_________) (_________)
Profit for the year from continuing
operations 8,391 8,024
Profitfrom discontinued operation - 238
Profit 8,391 8,262
(_________) (_________)
The profit for the year is attributable to equity holders
of Personal Group Holdings Plc
Earnings per share Pence Pence
Basic 27.2 26.9
Diluted 27.2 26.4
Earnings per share - continuing operations Pence Pence
Basic 27.2 26.1
Diluted 27.2 25.7
Consolidated Statement of Comprehensive Income
2018 2017
GBP'000 GBP'000
Profit for the year 8,391 8,262
Items that may be reclassified subsequently to the income statement
Available for sale financial assets:
Valuation changes taken to equity - 106
Reclassification of gains on available for sale financial assets on
derecognition - (40)
Tax on unrealised valuation changes taken to equity - (11)
(________) (________)
Total comprehensive income for the year 8,391 8,317
(_________) (_________)
The total comprehensive income for the year is attributable to
equity holders of Personal Group Holdings Plc.
Consolidated Balance Sheet at 31 December 2018
2017 2017
GBP'000 GBP'000
ASSETS
Non-current assets
Goodwill 10,575 10,575
Intangible assets 500 986
Property, plant and equipment 6,040 4,747
Investment property 130 130
Equity-accounted investee - 638
(_________) (_________)
17,245 17,076
(__) (______) (________)
Current assets
Financial assets 2,530 4,492
Trade and other receivables 16,532 14,619
Equity-accounted investee 50 -
Reinsurance assets 187 180
Inventories - Finished Goods 643 560
Cash and cash equivalents 15,148 12,641
(_________) (_________)
35,090 32,492
(___) (______) (_________)
Total assets 52,335 49,568
(__________) (__________)
Consolidated Balance Sheet at 31 December 2018
2018 2017
GBP'000 GBP'000
EQUITY
Equity attributable to equity
holders
of Personal Group Holdings
Plc
Share capital 1,544 1,540
Capital redemption reserve 24 24
Amounts recognised directly
into equity
relating to non-current available
for sale assets - 85
Other reserve (210) (310)
Profit and loss reserve 33,937 32,417
(_________) (_________)
Total equity 35,295 33,756
(_________) (_________)
LIABILITIES
Non-current liabilities
Deferred tax liabilities 102 21
Trade and other payables 356 -
Current liabilities
Provisions 1,259 1,905
Trade and other payables 12,233 10,698
Insurance contract liabilities 2,376 2,507
Current tax liabilities 714 681
(_________) (_________)
16,582 15,791
(_________) (_________)
(_________) (_________)
Total liabilities 17,040 15,812
(_________) (_________)
(_________) (_________)
Total equity and liabilities 52,335 49,568
(_________) (_________)
Consolidated Statement of Changes in Equity for the year ended
31 December 2018
Equity attributable to equity holders of Personal Group Holdings
Plc
Share Capital Available Other Profit Total
capital redemption for sale reserve and loss equity
reserve financial reserve
assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 January
2018 as previously reported 1,540 24 85 (310) 32,417 33,756
Adjustment on initial
adoption IFRS 9 - - (85) - 85 -
Restated balance as
at 1 January 2018 1,540 24 - (310) 32,502 33,756
(________) (______) (______) (______) (________) (________)
Dividends - - - - (7,087) (7,087)
Employee share-based
compensation - - - - 94 94
Proceeds of SIP* share
sales - - - - 132 132
Cost of SIP shares sold - - - 179 (179) -
Cost of SIP shares purchased - - - (79) - (79)
Deferred tax reserve
movement - - - - 88 88
Nominal value of LTIP**
shares issued 4 - - - (4) -
(________) (________) (________) (________) (________) (________)
Transactions with owners 4 - - 100 (6,956) (6,940)
(________) (________) (________) (________) (________) (________)
Profit for the year - - - - 8,391 8,391
(________) (________) (________) (________) (________) (________)
Total comprehensive income for
the year - - - - 8,391 8,391
(________) (_______) (________) (________) (________) (________)
Balance as at 31 December
2018 1,544 24 - (210) 33,937 35,295
(________) (______) (______) (________) (__________) (_________)
*PG Share Ownership Plan (SIP)
**Long Term Incentive Plan (LTIP)
Equity attributable to equity holders of Personal Group Holdings
Plc
Share Capital Available Other Profit Total
capital redemption for sale reserve and loss equity
reserve financial reserve
assets
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 - - - - (6,979) (6,979)
Employee share-based
compensation - - - - 166 166
Proceeds of SIP*
share sales - - - - 51 51
Cost of SIP shares
sold - - - 94 (94) -
Cost of SIP shares
purchased - - - (74) - (74)
Deferred tax reserve
movement - - - - (50) (50)
(________) (________) (________) (________) (________) (________)
Transactions with
owners - - - 20 (6,906) (6,886)
(________) (________) (________) (________) (________) (________)
Profit for the year - - - - 8,262 8,262
Other comprehensive
income
Available for sale
financial assets:
Change in fair
value of assets
classified as held
for sale - - 106 - - 106
Transfer to income
statement - - (40) - - (40)
Current tax on
unrealised valuation
changes taken to
equity - - (11) - - (11)
(________) (________) (________) (________) (________) (________)
Total comprehensive
income for the
year - - 55 - 8,262 8,317
(________) (_______) (________) (________) (________) (________)
Balance as at 31
December 2017 1,540 24 85 (310) 32,417 33,756
(________) (______) (______) (________) (__________) (_________)
* PG Share Ownership Plan (SIP)
Consolidated Cash Flow Statement
2018 2017
GBP'000 GBP'000
Net cash from operating activities
(see next page) 8,325 9,928
(__________) (__________)
Investing activities
Additions to property, plant and equipment (1,024) (120)
Additions to intangible assets (178) (182)
Proceeds from disposal of property, plant and
equipment 9 25
Proceeds from disposal of investment property - 933
Purchase of financial assets (105) (195)
Proceeds from disposal of financial
assets 2,056 1,995
Interest received 82 30
Dividends received from equity accounted
investee 750 -
Dividends received 8 23
(__________) (__________)
Net cash used in investing activities 1,598 2,509
(__________) (__________)
Financing activities
Interest paid (28) -
Purchase of own shares by the SIP (79) (74)
Proceeds from disposal of own shares
by the SIP 132 51
Payment of lease liabilities (354) -
Dividends paid (7,087) (6,979)
(__________) (__________)
Net cash used in financing activities (7,416) (7,002)
(__________) (__________)
Net change in cash and cash equivalents 2,507 5,435
Cash and cash equivalents, beginning
of year 12,641 7,206
Cash and cash equivalents, end of year 15,148 12,641
(_________) (_________)
Consolidated Cash Flow Statement 2018 2017
GBP'000 GBP'000
Operating activities
Profit after tax 8,391 8,262
Adjustments for
Depreciation 797 437
Amortisation of intangible assets 661 673
Loss on disposal of property, plant
and equipment 59 7
Loss on disposal of investment property - 7
Realised net investment (profit) /
loss 10 (101)
Interest received (82) (30)
Dividends received (8) (23)
Interest charge 148 -
Share of (profit)/ loss of equity-accounted
investee, net of tax (164) 2
Share-based payment expenses 94 192
Taxation expense recognised in income
statement 1,819 1,543
Changes in working capital
Trade and other receivables (1,920) 5,711
Trade and other payables 865 (5,493)
Provisions (646) -
Inventories (83) (132)
Taxes paid (1,616) (1,127)
(__________) (__________)
Net cash from operating activities 8,325 9,928
(__________) (__________)
Notes to the Financial Statements
1 Segment analysis
The segments used by management to review the operations of the
business are disclosed below.
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.
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.
2) IT Salary Sacrifice
IT salary sacrifice refers to the trade of PG Let's Connect, a
salary sacrifice technology Company purchased in 2014.
3) SaaS
Revenue in 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) Other
The other operating segment consists exclusively of revenue
generated by Berkeley Morgan Group (BMG) and its subsidiary
undertakings along with any investment and rental income obtained
by the Group.
The discontinued segment is:
Mobile
Mobile refers to the trade of Personal Group Mobile a mobile
phone salary sacrifice Company set up from the trade and assets of
Shebang Technologies purchased in 2015, which ceased trading in
December 2016.
The revenue and net result generated by each of the Group's
operating segments are summarised as follows:
IT Salary Continuing Discontinued
Core Insurance Sacrifice SaaS Other - Group Mobile
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating segments
2018
Revenue
Earned premiums net
of reinsurance 31,219 - 13 - 31,232 -
Other income - Insurance
Related (9) - - 227 218 -
Other income - IT Salary
Sacrifice - 14,970 - - 14,970 -
Other income - Platform - - 1,800 - 1,800 -
Other income - Transactional
and commission - - 6,929 - 6,929 -
Other income - - - 114 114
Investment property - - - 1 1 -
Investment income - - - 83 83 -
(_________) (_________) (_________) (_________) (_________) (_________)
31,210 14,970 8,742 425 55,347 -
Total revenue (_________) (_________) (_________) (_________) (_________) (_________)
Net result for year
before tax 8,869 1,350 29 (38) 10,210 -
PG Let's Connect - Tax
provision - (646) - - (646) -
PG Let's Connect - Amortisation
of intangibles - 330 - - 330 -
Acquisition costs - - - 150 150 -
Interest 110 28 10 - 148 -
Share based payments - - - 117 117 -
Depreciation 665 108 15 9 797 -
Amortisation (other) 133 56 142 - 331 -
Adjusted EBITDA* 9,777 1,226 196 238 11,437 -
(_________) (_________) (_________) (_________) (_________) (_________)
Segment assets 25,403 12,567 2,612 11,753 52,335 -
Segment liabilities 6,947 8,035 1,883 175 17,040 -
Depreciation and amortisation 798 494 157 9 1,458 -
IT Salary Continuing Discontinued
Core Insurance Sacrifice SaaS Other - Group Mobile
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating segments
2017
Revenue
Earned premiums net
of reinsurance 30,670 - 9 - 30,679 -
Other income - Insurance
Related 57 - - 334 391 -
Other income - IT Salary
Sacrifice - 11,292 - - 14,045 63
Other income - Platform - - 1,528 - 1,528 -
Other income - Transactional
and commission - - 1,120 - 1,120 -
Other income - - - 105 105 -
Investment property - - - 1 1 -
Investment income - - - 117 117 -
(_________) (_________) (_________) (_________) (_________) (_________)
30,727 11,292 2,657 557 45,233 63
Total revenue (_________) (_________) (_________) (_________) (_________) (_________)
Net result for year
before tax 9,406 (111) 197 18 9,510 295
PG Mobile - Reorganisation
costs - - - - - (225)
PG Let's Connect - Amortisation
of intangibles - 330 - - 330 -
Share based payments - - - 192 192 -
Depreciation 392 30 5 10 437 -
Amortisation (other) 162 39 142 - 343 -
EBITDA* 9,960 288 344 220 10,812 70
(_________) (_________) (_________) (_________) (_________) (_________)
Segment assets 21,628 10,979 1,384 15,568 49,560 8
Segment liabilities 6,379 8,035 1,257 139 15,810 2
Depreciation and amortisation 554 399 147 10 1,110 -
2. Taxation comprises United Kingdom corporation tax of
GBP1,650,000 (2017: GBP1,569,000) and a deferred tax charge of
GBP169,000 (2017: credit of GBP26,000)
3. The basic and diluted earnings per share are based on profit
for the financial year of GBP8,391,000 (2017: GBP8,262,000) and on
30,798,840 basic (2017: 30,743,826) and 31,806,261 diluted (2016:
31,282,267) ordinary shares, the weighted average number of shares
in issue during the year.
4. The total dividend paid in the year was GBP7,087,000 (2017: GBP6,979,000)
This preliminary statement has been extracted from the 2018
audited financial statements that will be posted to shareholders in
due course. The statutory accounts for each of the two years to 31
December 2017 and 31 December 2016 received audit reports, which
were unqualified and did not contain statements under section 498
(2) or (3) of the Companies Act 2006. The 2017 accounts have been
filed with the Registrar of Companies but the 2018 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; and write-back of contingent
consideration and the movement in the PG Let's Connect tax
provision are both considered to be non-underlying items, relates
to a liability inherited on acquisition of that business and have
the potential to fluctuate and be of significant size.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SEDEFIFUSEFD
(END) Dow Jones Newswires
March 26, 2019 03:01 ET (07:01 GMT)
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