TIDMHSD
RNS Number : 8158T
Hansard Global plc
23 July 2020
23 July 2020
Hansard Global plc
New business results for the year ended 30 June 2020
Hansard Global plc ("Hansard" or "the Group"), the specialist
long-term savings provider , issues its new business results for
the financial year ended 30 June 2020 ("FY 2020").
Summary
-- New business for the year ended 30 June 2020 was GBP159.8m in
PVNBP ("Present Value of New Business Premiums") terms, up 2.5%
from FY 2019 of GBP155.9m.
-- New business for Q4 2020 was GBP41.3m, 13.2% lower than Q4 2019 of GBP47.6m.
-- The Covid-19 environment presented challenges for our
distribution network to meet clients and conclude sales activity
during Q4 2020. While this impacted our Q4 2020 new business, our
technology-based processes
and business continuity preparedness helped greatly to mitigate against these challenges.
-- Our Latin American region was the highlight for new business
growth over the course of FY 2020, finishing up 44.0% compared to
FY 2019.
-- Assets under administration recovered in Q4 2020 after the
global stock market sell-off in March and totalled GBP1.09bn at 30
June 2020, up from GBP1.08bn at 30 June 2019.
-- The Group remains well capitalised with highly liquid shareholder funds.
Gordon Marr, Group Chief Executive Officer, commented:
"In one of the most challenging periods in living memory,
Hansard has delivered a resilient new business result for the year,
finishing 2.5% up on 2019. Our staff and distribution partners have
dealt admirably with the challenges presented and have shown that
with flexibility, innovation and technology, many hurdles can be
overcome.
While the outlook for new business depends largely on the
severity of on-going Covid-19 restrictions, our core strategic
projects of Japan and our systems upgrade continue to make
progress. Importantly, we still plan to launch our new proposition
in Japan before the end of this calendar year."
For further information:
Hansard Global plc +44 (0) 1624 688 000
Gordon Marr, Group Chief Executive Officer
Tim Davies, Chief Financial Officer
Email: investor-relations@hansard.com
Camarco +44 (0) 203 757 4980
Ben Woodford, Rebecca Noonan
Hansard Global plc
NEW BUSINESS RESULTS FOR THE YEARED 30 JUNE 2020
OVERVIEW
The Group continues to focus on the distribution of regular and
single premium products in a range of jurisdictions around the
world, seeking to achieve well diversified new business growth.
In light of the significant challenges presented by the Covid-19
pandemic, new business for Q4 2020 was down 13.2% to GBP41.3m in
Present Value of New Business Premiums ("PVNBP") terms. The result
for the full year to 30 June 2020 remained positive with new
business up 2.5% on FY 2019 to GBP159.8m. The primary area of
growth during the year came from increased sales of regular savings
products in Latin America.
COVID-19 UPDATE
We noted in our last trading update released on 7 May 2020 that
our workforce moved to working remotely during March and that
restrictions around the globe presented significant difficulties
for our Independent Financial Advisor ("IFA") network in meeting
clients, providing advice and concluding sales.
While Hansard is well supported by recurring income streams via
regular premium products and asset-based annual management charges,
the fourth quarter was, as expected, a challenging one for new
business.
Where possible we sought to deploy technology to navigate a
number of challenges. For example, we successfully rolled out
additional tools to allow customers and IFAs to provide and sign
documentation electronically. Our back-office systems and
infrastructure served us well. With a seamless transition to
homeworking, we were able to operate all our client servicing and
processing activities remotely, with little impact to turn-around
times.
The Isle of Man had significant success in containing and
eradicating all known cases of the Covid-19 virus during Q4 which
has meant a return of Isle of Man based employees to our
head-office in mid-June.
We are committed to supporting and working with our customers
where they may be experiencing personal financial difficulties, for
example by allowing for premium holidays without incurring any
additional charges or penalties.
We expect, like many industries, that a small number of IFAs
will experience financial difficulty. We are carefully monitoring
credit risk exposures with our IFA network and have not to date
seen any material concerns. We do plan however to make some modest
provisions in our year-end results for irrecoverable broker
balances, currently estimated to be in the region of GBP0.2m.
Assets under administration ("AuA") were impacted quite
significantly by the stock market declines in March 2020.
Encouragingly the markets have since recovered over the course of
Q4 and as at 30 June 2020 were slightly up on the level at 30 June
2019. Initial risks to asset-based fee income levels have therefore
subsided although clearly significant market risks will continue to
exist for the coming year.
New Business Flows
New business flows for FY 2020 are summarised as follows :
Three months Year ended
ended
30 June 30 June
2020 2019 % 2020 2019 %
Basis GBPm GBPm change GBPm GBPm change
------------------------------- ----- ----- -------- ------ ------ -------
Present Value of New Business
Premiums 41.3 47.6 (13.2%) 159.8 155.9 2.5%
Annualised Premium Equivalent 5.0 6.9 (27.5%) 24.0 24.7 (2.8%)
------------------------------- ----- ----- -------- ------ ------ -------
The present value of new business premiums is influenced, among
other factors, by the Group's expectations of future premium
collections on regular premium contracts issued during the year.
Where these expectations at year end are different from the
assumptions used in the calculation in prior quarters, the
assumptions are amended in Q4 to better report the cumulative value
of new business. This adjustment is reflected in the Q4 reported
new business figures.
The impact of assumption changes in the current year, the
largest of which relates to improved experience with paid-up
policies, has been to increase PVNBP for the year by GBP8.5m
compared with the assumptions used in the previous year. Excluding
those updated assumptions, cumulative new business flows for FY
2020 would have been reported as GBP151.3m (a decline of 3.0% from
FY 2019) and new business in Q4 2020 would have been reported as
GBP32.8m (a decline of 31.1% from Q4 2019).
In APE terms, new business was down 2.8% for the year and 27.5%
for the quarter. APE figures are unaffected by the updated
assumptions above.
New business flows on the basis of PVNBP are broken down as
follows:
Three months ended Year ended
30 June 30 June
2020 2019 % 2020 2019 %
PVNBP by product type GBPm GBPm change GBPm GBPm change
----------------------- ------ ----- -------- ------ ------ --------
Regular premium 26.0 28.5 (8.8%) 102.0 85.5 19.3%
Single premium 15.3 19.1 (19.9%) 57.8 70.4 (17.9%)
----------------------- ------ ----- -------- ------ ------ --------
Total 41.3 47.6 (13.2%) 159.8 155.9 2.5%
----------------------- ------ ----- -------- ------ ------ --------
Three months ended Year ended
30 June 30 June
2020 2019 % 2020 2019 %
change
--------
PVNBP by geographical area GBPm GBPm GBPm GBPm change
---------------------------- ------ ----- -------- ------ ------ --------
Middle East and Africa 18.6 18.2 2.2% 63.3 57.4 10.3%
Rest of World 12.4 14.8 (16.2%) 48.5 52.7 (8.0%)
Latin America 7.6 8.4 (9.5%) 37.3 25.9 44.0%
Far East 2.7 6.2 (56.5%) 10.7 19.9 (46.2%)
Total 41.3 47.6 (13.2%) 159.8 155.9 2.5%
---------------------------- ------ ----- -------- ------ ------ --------
Despite a challenging final quarter due to Covid-19, the year
finished 2.5% higher than FY 2019.
Our largest region, Middle East & Africa, proved resilient
despite the challenges of Covid-19 restrictions. New business was
up 2.2% in Q4 2020 compared to Q4 2019 and up 10.3% for the full
year.
The Rest of World region was down 16.2% in Q4 2020 compared to
Q4 2019 and down 8% for the full year. The reduction was primarily
due to a lower number of high value single premium cases.
New business in Latin America was down 9.5% in Q4 2020 compared
to Q4 2019 as the region was hit particularly hard by Covid-19.
Strong growth earlier in the year resulted in the full year still
being up an impressive 44%. Our subsidiary in The Bahamas, Hansard
Worldwide Limited, continues to be well received since its launch
in 2019 and has allowed us to build on our key distribution
relationships and deploy targeted initiatives to encourage
adoption.
As outlined in previous reports, our current focus in the Far
East region is to develop and bring our new Japanese proposition to
market. We are still planning to achieve this before the end of
calendar year 2020. We are also working with our existing
distribution network to develop additional new business via our
licence in Labuan, Malaysia.
In terms of business mix, we continue to focus on higher margin
regular premium savings while selectively pursuing single premiums
where the margin is acceptable. This has resulted in our regular
premiums rising 19.3% and single premiums falling 17.9% for the
year.
Assets under Administration ("AUA")
The composition and value of AuA is based upon the assets
selected by or on behalf of contract holders to meet their savings
and investment needs. Reflecting the wide geographical spread of
the Group's customer base, the majority of premium contributions
and of AuA are designated in currencies other than sterling. Over
60% of Group AuA are denominated in US dollars.
The total of such assets is affected by the level of new premium
contributions received from new and existing policy contracts, the
amount of assets withdrawn by contract holders, charges and the
effect of investment market and currency movements. These factors
ultimately affect the level of fund-based income earned by the
Group.
Net withdrawals are typically experienced in Hansard Europe dac
("Hansard Europe"), which closed to new business in 2013.
During Q4 2020 AuA increased by GBP131.7m or 14%, reflecting the
recovery of global stock markets since the sell-off experienced
during March 2020. Total AuA at 30 June 2020 were GBP1,085.2m, up
GBP5.5m since the start of the financial year, of which GBP987.5m
relates to Hansard International.
Three months Year ended
ended
30 June 30 June
2020 2019 2020 2019
GBPm GBPm GBPm GBPm
----------------------------------------- -------- -------- -------- --------
Deposits to investment contracts
- regular premiums 21.4 20.2 85.8 79.8
Deposits to investment contracts
- single premiums 14.7 13.5 57.2 64.6
Withdrawals from contracts and
charges (29.9) (31.0) (143.6) (147.9)
Effect of market and currency movements 125.5 50.9 6.1 47.2
----------------------------------------- -------- -------- -------- --------
Increase in period 131.7 53.6 5.5 43.7
Opening balance 953.5 1,026.1 1,079.7 1,036.0
----------------------------------------- -------- -------- -------- --------
Assets under Administration at
30 June 1,085.2 1,079.7 1,085.2 1,079.7
----------------------------------------- -------- -------- -------- --------
The movement in AuA is split as follows between Hansard
International and Hansard Europe:
Year ended
30 June
2020 2019
GBPm GBPm
----------------------- --- --------- -------
Hansard International 22.1 51.8
Hansard Europe (16.6) (8.1)
------------------------------ --------- -------
Increase in period 5.5 43.7
------------------------------ --------- -------
RESULTS FOR YEAR ENDED 30 JUNE 2020
Full trading results for the year are scheduled to be announced
on 24 September 2020.
Outlook
While restrictions related to Covid-19 have started to relax to
varying degrees around the world, the economic environment remains
uncertain and fragile. Although our technology-driven platform and
processes offer significant advantages, it remains challenging for
our distributors to sell international savings and investment
products without face to face meetings, especially when many
customers have concerns over their personal financial situation.
The range of outcomes for new business in financial year 2021 is
therefore particularly difficult to foresee . Our strong back-book
and assets-driven income streams do however provide offsetting
stability and cash flow during these challenging times and
encouragingly assets under administration were marginally higher at
30 June 2020 than the corresponding period last year.
We also continue to invest for the future through the on-going
development of our Japanese proposition and the upgrade of our
systems environment. We still plan to launch our new product in
Japan before the end of the calendar 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 via 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 scalable.
-- The principal geographic markets in which the Group currently
services contract holders and financial advisors are the Middle
East & Africa, the Far East and Latin America. These markets
are served by Hansard International Limited and Hansard Worldwide
Limited.
-- Hansard Europe dac previously operated in Western Europe but
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 scalability 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.
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.
This announcement contains inside information which is disclosed
in accordance with the Market Abuse Regime.
Legal Entity Identifier: 213800ZJ9F2EA3Q24K05
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END
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