TIDMPGH

RNS Number : 7105A

Personal Group Holdings PLC

27 September 2022

 
 27 September 2022 
 
 

PERSONAL GROUP HOLDINGS PLC

("Personal Group", "Company" or "Group")

Interim Results & Interim Dividend for the six months ended 30 June 2022

Underlying growth, a strong balance sheet, and products that resonate in a challenging market for both employers and their employees, positions the Group well for future uplift in EBITDA. On track to meet full year market expectations.

Personal Group Holdings Plc (AIM: PGH), the workforce benefits and services provider is pleased to announce its interim results for the six months ended 30 June 2022.

Financial Highlights

   --    Group revenue increased 5.8% to GBP34.7m (H1 2021: GBP32.8m) 

-- Annualised Premium Income for the Group's largest division, Affordable Insurance, rebuilding post-pandemic, up 7% to GBP26.2m, providing a strong basis for future growth

-- Adjusted EBITDA* of GBP1.5m (H1 2021: GBP4.1m), in line with management expectations reflecting the anticipated reduced contribution from insurance due to investment in policyholder acquisition and increased claims costs, offset by strong growth from other divisions

   --    Profit before tax of GBP0.5m (H1 2021: GBP3.2m) in line with adjusted EBITDA 
   --    Basic EPS of 1.7p (H1 2021: 8.4p) 

-- Strong balance sheet and liquidity with cash and deposits at period end of GBP21.8m (Dec 2021: GBP22.9m), and debt free

-- Interim dividend of 5.3p (H1 2021: 5.3p) to be paid, reflecting continued confidence in the Group's business model and prospects

Operational Highlights

   --    52 new client wins secured in the period including Vinci, Renfrewshire Council and BSI Group 

-- Strong retention and new insurance sales across Affordable Insurance segment, successfully building back towards pre-pandemic levels

-- Continued substantial increase in contribution from SME channel via Sage Employee Benefits; Annual Recurring Revenue of GBP2.1m at 30 June 22 (GBP1.6m at 31 December 21, GBP1.2m at June 21)

-- Hapi platform subscriptions showing growth; ARR of GBP1.7m at 30 June 22 (GBP1.5m at 31 December 21), with significant investment into the platform, driving immediate and ongoing cost savings

   --    Strong organic growth in Pay & Reward 

Post-Period Trading and Outlook

-- New client gains continue with notable wins with Secure Trust Bank and Aston University choosing HapiFlex as their benefit platform

-- Insurance sales and retention rates in H2 to date remain positive despite the macroeconomic environment and cost of living crisis, demonstrating the continued relevance of the Group's product offering in the current economic environment

-- Strategic acquisition of Quintige Consulting Group ("QCG") post period end brings new clients to the Group with cross-sell opportunities for Hapi, Insurance and Innecto Digital products

   --    Trading remains in line to meet market's full year expectations 
   --    Board is confident in longer-term outlook for the business 

* Adjusted EBITDA is defined as earnings before interest, tax, depreciation, amortisation of intangible assets, goodwill impairment, share-based payment expenses, corporate acquisition costs and restructuring costs.

Deborah Frost, Chief Executive of Personal Group, commented:

"These half-year results are a demonstration of the resilience of our business model and product offering. We have made significant progress in executing our strategy and meeting the goals we set ourselves in the first six months of the year and we are starting to see new sales driving future growth.

Despite the challenges in the economic environment the Group has continued to successfully rebuild the Affordable Insurance side of the business, which will drive growth in a weighted second half, underpinning our confidence in meeting full-year targets for FY 2022.

Our relationship with Sage has gathered further momentum and gives us access to the previously untapped market of the UK's SME sector. We have also maintained significant investment into the business to support further innovation across our offering, including the new and improved Hapi 2.0 which, once launched, we expect will add significant value for clients and their employees.

Whilst we are cognisant of the macro environment and potential challenges it may bring, we believe that our products are valued by customers, as evidenced by the retention rates we've seen so far, across all of our product set, and which assures us that the million-plus employees using them share our views. We are seeing growth across the breadth of the business, which reinforces our belief in the relevance and importance of our product in these difficult times. These results are a credit to the hard work of our dedicated team and the Board is excited to see what we can achieve over the next twelve months."

An overview of the interim results from Deborah Frost, Chief Executive, is available to watch here:

www.fmp-tv.co.uk/2022/09/27/personal-group-interim-results-tv-interview/

Personal Group Holdings will be hosting a webinar for private investors on Friday 30 September at 12.00. If you would like to register for the webinar, please follow this link: https://www.investormeetcompany.com/personal-group-holdings-plc/register-investor

-S-

For more information please contact:

 
Personal Group Holdings Plc 
Deborah Frost / Sarah Mace       +44 (0)1908 605 000 
 
Cenkos Securities Plc 
Camilla Hume / Callum Davidson 
 (Nominated Adviser)             +44 (0)20 7397 8900 
Russell Kerr (Sales) 
Alma PR 
Caroline Forde / Lily Soares     +44 (0)20 3405 0205 
 Smith /                          personalgroup@almapr.co.uk 
 Joe Pederzolli 
 

Notes to Editors

Personal Group Holdings Plc (AIM: PGH) is a workforce benefits and services provider. The Group enables employers across the UK to improve employee engagement and support their people's physical, mental, social and financial wellbeing. Its vision is to create a brighter future for the UK workforce.

Personal Group provides health insurance services and a broad range of employee benefits, engagement, and wellbeing products. Its offerings can also be delivered through its proprietary app, Hapi, and the recently developed extension to the platform, Hapiflex.

The Group's growth strategy is centred around widening the footprint of the business into the SME, talent-led & Public Sectors, thereby expanding the addressable customer base. In addition, it aims to grow in its existing industrial heartlands, to re-invigorate growth in insurance policyholders and to drive the use of its SaaS offerings.

Group Clients include: Airbus, B & Q, Barchester Healthcare, British Transport Police, The Prince's Trust, Randstad, Royal Mail Group, The Royal Mint, the Sandwell & Birmingham NHS Trust, Stagecoach Group plc, and The University of York.

For further information on the Group please see www.personalgroup.com

CEO STATEMENT

I am pleased to report that over the first six months we have seen all our underlying growth drivers moving in the right direction and we reflect on a period of good momentum and clear strategic progress.

As anticipated, year-on-year profit comparison is lower, reflecting the lagged impact of the pandemic and 17 months of lockdowns on the insurance business. However this comparison masks the underlying growth and important achievements, at an operational level, across the Group and which will underpin future profitable growth.

Over the period I am particularly pleased to have seen the insurance book re-building substantially, a very strong period for Pay & Reward, and acceleration in our offering to the small and mid-sized business market. All of this reflects the continued high demand for workforce benefits and services and the relevance of our product offering.

With workers throughout the country becoming increasingly exposed to challenging macroeconomic trends, such as the cost-of-living crisis, the value of our offering has never been more apparent as is demonstrated by new client wins and positive insurance sales and retention rates during the period. We continue to enable employers across the UK to improve employee engagement and support their people's physical, mental, social and financial wellbeing, priorities which have all become more important in times of uncertainty.

Performance against Growth Strategy

Our overarching strategy is to build workforce resilience for clients, helping employees thrive in work and in life. With our preliminary results, I announced our refreshed strategy, focusing on three core pillars:

   --    Driving insurance 
   --    Transforming Reward & Benefits 
   --    Accelerating our SME offer 

In H1 we've made clear progress against each of these pillars. Our insurance book continues to build back towards pre-Pandemic levels, with Annualised Premium Income seeing real growth from the end of last year. Subscriptions for our market-leading employee engagement platform, Hapi, also grew across the first six months of the year, and we are planning significant investment into the platform. This investment into 'Hapi 2.0' is expected to further drive growth, with immediate and ongoing savings across the platform and a better user experience for clients. The acquisition of QCG, alongside organic growth for Innecto, strengthens our strategic reward offer and allows for cross-sell of Innecto Digital products and other benefit products. Our strategic development into the SME sector continues to show significant growth in terms of Annualised Recurring Revenue.

Divisional H1 Segmental Analysis

Affordable Insurance

Our traditional face-to-face insurance sales' model was significantly affected by the series of lockdowns seen in 2020 and 2021 and we have witnessed the expected lagged impact of this over the past few reporting periods. However, with the field sales team now up to full strength, we continue to successfully rebuild the insurance book and in June 2022 we recorded the highest amount of new business signed in a single month since November 2018. This, combined with retention rates remaining above the Group's historical averages, has helped to drive the Annualised Premium Income (API) value up to GBP26.2m (December 2021: GBP24.4m).

The level of claims in H1, and particularly in Q1, was higher than anticipated, although this has subsequently returned to projected levels. This, in combination with a smaller insurance book and the increased policy-holder acquisition costs associated with having a full sales team out in the field, resulted in an adjusted EBITDA contribution of GBP4.0m (H1 2021: GBP6.5m), which should now continue to build in line with our increasing API.

Pay and Reward

(Innecto)

Pay & Reward delivered strong organic growth during the period with overall revenue up 73%, consultancy fee income up 93% and annual subscription income from Innecto Digital products up 24% versus H1 2021. The acquisition of QCG and early wins achieved in H2 are anticipated to drive growth throughout the remainder of the year.

Benefits platform

Organic growth was seen in the period across the Company's Benefits Platform with the combined Annualised Recurring Revenue (ARR) standing at GBP3.8m as of June 2022 (December 2021: GBP3.2m). This growth was largely driven by the substantial contribution from the Group's partnership with Sage, where ARR via Sage Employee Benefits increased to GBP2.1m at the end of the period (December 2021: GBP1.6m), and where we continue to see good momentum. We are now also exploring further routes to market including reaching SMEs directly, as well as through other potential partnerships.

Other Owned Benefits

(Let's Connect)

Revenue for Let's Connect is down year-on-year, largely due to comparison with a strong H1 2021, where schemes were deferred from 2020. The division proves to be a popular benefit for employees, with order numbers up 10% on H1 2021, and one that we expect to remain highly relevant against the current macro backdrop as it moves into its peak period in Q4.

Interim Dividend

The Company is pleased to announce that an interim dividend for 2022 of 5.3p will be paid on 15 November 2022 to members on the register as at 7 October 2022 (the record date). Shares will be marked ex-dividend on 6 October 2022. The last day for elections will be on 25 October 2022. The Board has considered the level of dividend in the context of the full year results, reflecting continued confidence in the Group's business model and prospects.

Board Changes

As detailed in the RNS dated 1 June 2022, Liam McGrath stepped down from the Board, and left the Company, on 30 August 2022.

Current Trading and Outlook

Trading into July and August has remained robust, and in line with management's expectations, giving the Board confidence in meeting market expectations for the full year.

Operationally, the Company is full of activity, with the core business delivering well and new opportunities being driven forward by an energised workforce.

Despite the confidence and positivity that currently surrounds the business we are very aware of the difficult and uncertain macro-environment in which we are all living. Whilst we continually monitor our lead indicators for signs of impact to the business, we are pleased that, to date, all indicators remain positive thereby supporting the Board's current confidence in the full year outcome. We are mindful, too, of industrial action by unions which could become more widespread and affect our client base and will also continue to monitor this. That said, our insurance offer is good value and gives peace of mind, qualities which are highly sought after in the current challenging climate and our Benefits and Pay & Reward products are becoming ever more important as employers look at how they can best remunerate teams against an inflationary backdrop.

We will continue to monitor events carefully and remain committed to executing on our growth strategy and look forward to delivering for shareholders going forward.

Deborah Frost

Group Chief Executive

27 September 2022

Consolidated Income Statement

 
                                                                            Restated* 
                                                       6 months              6 months 
                                                          ended                 ended 
                                                   30 June 2022          30 June 2021 
                                                      Unaudited             Unaudited 
                                     Note               GBP'000               GBP'000 
 
 
Gross premiums written                                   12,360                12,752 
Outward reinsurance premiums                               (70)                  (79) 
Change in unearned premiums                                (59)                 (186) 
Change in reinsurers' share of 
 unearned premiums                                          (7)                   (8) 
                                                     (________)            (________) 
Earned premiums net of reinsurance                       12,224                12,479 
 
Employee benefits and services                            8,436                 8,108 
Voucher resale income                                    13,848                12,082 
Other income                                                128                   135 
Investment income                                            29                    13 
                                                     (________)            (________) 
Revenue                                                  34,665                32,817 
                                                     (________)            (________) 
 
Claims incurred                                         (3,663)               (2,713) 
Insurance operating expenses                            (3,227)               (1,888) 
Employee benefits and services 
 expenses                                               (8,268)               (8,417) 
Voucher resale expenses                                (13,872)              (12,135) 
Other expenses                                             (38)                   119 
Group administration expenses                           (4,679)               (4,410) 
Share based payment expenses                              (152)                  (81) 
Charitable donations                                       (50)                  (35) 
                                                     (________)            (________) 
Expenses                                               (33,949)              (29,560) 
                                                     (________)            (________) 
 
Operating profit                                            716                 3,257 
Finance costs                                              (13)                  (17) 
Loss on equity investments                                (244)                     - 
                                                     (________)            (________) 
Profit before tax                                           459                 3,240 
Tax                                   4                      73                 (602) 
                                                     (________)            (________) 
Profit for the period after tax                             532                 2,638 
                                                     (________)            (________) 
Total comprehensive income for 
 the period                                                 532                 2,638 
                                                     (________)            (________) 
 
 
Earnings per share     Pence  Pence 
Basic                    1.7    8.4 
Diluted                  1.7    8.4 
 

The total comprehensive income for the period is attributable to equity holders of Personal Group Holdings Plc.

*While the results remain unchanged, the presentation of the prior year has been restated to add clarity to the reader. For further details on the nature and rationale of the restatement, please refer to the consolidated financial statements of the Group for the year ended 31 December 2021.

Consolidated Balance Sheet

 
                                                  At 30 June 2022              At 31 Dec 2021 
                                                        Unaudited                     Audited 
 
                                 Note                     GBP'000                     GBP'000 
 ASSETS 
 Non-current assets 
 Goodwill                         6                        12,696                      12,696 
 Intangible assets                7                         1,746                       1,637 
 Property, plant and equipment    8                         4,988                       5,033 
                                                        (_______)                   (_______) 
                                                           19,430                      19,366 
                                                       (________)                  (________) 
Current assets 
 Financial assets                 9                         2,989                       2,596 
 Trade and other receivables                                8,361                      14,035 
 Reinsurance assets                                           107                         108 
 Inventories                                                1,059                         898 
 Cash and cash equivalents                                 20,102                      20,291 
 Current tax assets                                           441                         310 
                                                       (________)                  (________) 
                                                           33,059                      38,238 
                                                       (________)                  (________) 
 Total assets                                              52,489                      57,604 
                                                       (________)                  (________) 
 
 
 

Consolidated Balance Sheet

 
 
                                              At 30 June 2022               At 31 Dec 2021 
                                                    Unaudited                      Audited 
                                      Note            GBP'000                      GBP'000 
 
EQUITY 
 
Equity attributable to equity 
 holders of Personal Group Holdings 
 plc 
Share capital                                           1,562                        1,561 
Share premium                                           1,134                        1,134 
Capital redemption reserve                                 24                           24 
Other reserve                                            (61)                         (32) 
Share based payment reserve                               247                          158 
Profit and loss reserve                                37,379                       38,436 
                                                   (________)                   (________) 
Total equity                                           40,285                       41,281 
                                                   (________)                   (________) 
 
 
LIABILITIES 
Non-current liabilities 
Deferred tax liabilities                 455         478 
Trade and other payables                 254         402 
                                  (________)  (________) 
                                         709         880 
                                  (________)  (________) 
 
Current liabilities 
Trade and other payables               8,272      12,356 
Insurance contract liabilities         3,223       3,087 
                                  (________)  (________) 
                                      11,495      15,443 
                                  (________)  (________) 
 
                                  (________)  (________) 
Total liabilities                     12,204      16,323 
                                  (________)  (________) 
 
                                  (________)  (________) 
Total equity and liabilities          52,489      57,604 
                                  (________)  (________) 
 

Consolidated Statement of Changes in Equity for the six months ended 30 June 2022

 
                               Share                          Share                        Capital        Other                    Share       Profit        Total 
                             capital                        Premium                     redemption      reserve                    Based       & loss       equity 
                                                                                           reserve                               Payment      reserve 
                                                                                                                                 Reserve 
                             GBP'000                        GBP'000                        GBP'000      GBP'000                  GBP'000      GBP'000      GBP'000 
 
 Balance as at 
  1 January 
  2022                         1,561                          1,134                             24         (32)                      158       38,436       41,281 
                          (________)                     (________)                     (________)   (________)               (________)   (________)   (________) 
 Dividends                         -                              -                              -            -                        -      (1,654)      (1,654) 
 Employee 
  share-based 
  compensation                     -                              -                              -            -                      152            -          152 
 Proceeds of 
  SIP* 
  share sales                      -                              -                              -            -                        -           11           11 
 Cost of SIP 
  shares 
  sold                             -                              -                              -            9                        -          (9)            - 
 Cost of SIP 
  shares 
  purchased                        -                              -                              -         (18)                        -            -         (18) 
 Purchase of 
  New 
  shares                                                          -                              -         (20)                        -            -         (20) 
 Shares issued 
  in year - 
  LTIP 
  exercise                         1                              -                              -            -                     (63)           63            1 
                          (________)                     (________)                     (________)   (________)               (________)   (________)   (________) 
 Transactions 
  with owners                      1                              -                              -         (29)                       89      (1,589)      (1,528) 
                          (________)                     (________)                     (________)   (________)               (________)   (________)   (________) 
 Profit for the 
  period                           -                              -                              -            -                        -          532          532 
                          (________)                     (________)                     (________)   (________)               (________)   (________)   (________) 
 Total 
  comprehensive 
  income for 
  the 
  period                           -                              -                              -            -                        -          532          532 
                          (________)                     (________)                      (_______)    (_______)                (_______)    (_______)    (_______) 
 Balance as at 
  30 June 2022                 1,562                          1,134                             24         (61)                      247       37,379       40,285 
                          (________)                     (________)                     (________)   (________)               (________)   (________)   (________) 
 

* PG Share Ownership Plan (SIP)

Consolidated Statement of Changes in Equity for the six months ended 30 June 2021

 
                                                                                   Share 
                                                       Capital                     Based       Profit 
                              Share        Share    redemption        Other      Payment       & loss        Total 
                            capital      Premium       reserve      reserve      Reserve      reserve       equity 
                            GBP'000      GBP'000       GBP'000      GBP'000      GBP'000      GBP'000      GBP'000 
 
 Balance as at 
  1 January 2021              1,561        1,134            24         (21)            -       38,076       40,774 
                         (________)   (________)    (________)   (________)   (________)   (________)   (________) 
 Dividends                        -            -             -            -            -      (1,592)      (1,592) 
 Employee share-based 
  compensation                    -            -             -            -           76            5           81 
 Proceeds of SIP* 
  share sales                     -            -             -            -            -           19           19 
 Cost of SIP shares 
  sold                            -            -             -           13            -         (13)            - 
 Cost of SIP shares 
  purchased                       -            -             -         (24)            -            -         (24) 
                         (________)   (________)    (________)   (________)   (________)   (________)   (________) 
 Transactions 
  with owners                     -            -             -         (11)           76      (1,581)      (1,516) 
                         (________)   (________)    (________)   (________)   (________)   (________)   (________) 
 Profit for the 
  period                          -            -             -            -            -        2,638        2,638 
                         (________)   (________)    (________)   (________)   (________)   (________)   (________) 
 Total comprehensive 
  income for the 
  period                          -            -             -            -            -        2,638        2,638 
                         (________)   (________)     (_______)    (_______)    (_______)    (_______)    (_______) 
 Balance as at 
  30 June 2021                1,561        1,134            24         (32)           76       39,133       41,896 
                         (________)   (________)    (________)   (________)   (________)   (________)   (________) 
 

* PG Share Ownership Plan (SIP)

Consolidated Statement of Cash Flows

 
                                                                 6 months 
                                                  6 months          ended 
                                                     ended   30 June 2021 
                                              30 June 2022      Unaudited 
                                                 Unaudited 
                                                   GBP'000        GBP'000 
 
Net cash from operating activities (see 
 opposite)                                           3,023          3,930 
                                                  (______)       (______) 
Investing activities 
Additions to property, plant and equipment           (222)           (69) 
Additions to intangible assets                       (473)          (122) 
Purchase of financial assets                       (1,509)            (1) 
Sale of financial assets                               871              - 
Interest received                                       29             13 
                                                  (______)       (______) 
Net cash from investing activities                 (1,304)          (179) 
                                                  (______)       (______) 
Financing activities 
Proceeds from issue of shares                            1              - 
Purchase of own shares by the SIP                     (31)           (16) 
Proceeds from disposal of own shares 
 by the SIP                                              6              8 
Interest paid                                          (4)            (2) 
Payment of lease liabilities                         (226)          (233) 
Dividends paid                                     (1,654)        (1,592) 
                                                  (______)       (______) 
Net cash used in financing activities              (1,908)        (1,835) 
                                                  (______)       (______) 
Net change in cash and cash equivalents              (189)          1,916 
Cash and cash equivalents, beginning 
 of period                                          20,291         17,589 
                                                 (_______)      (_______) 
Cash and cash equivalents, end of period            20,102         19,505 
                                                (________)     (________) 
 

Consolidated Statement of Cash Flows

 
                                                                        6 months 
                                                         6 months          ended 
                                                            ended   30 June 2021 
                                                     30 June 2022      Unaudited 
                                                        Unaudited 
                                                          GBP'000        GBP'000 
Operating activities 
Profit after tax                                              532          2,638 
Adjustment for: 
Depreciation                                                  493            480 
Amortisation of intangible assets                             364            266 
Loss on disposal of property, plant and equipment              24              - 
Interest received                                            (29)           (13) 
Realised and unrealised investment losses                     244              - 
Interest charge                                                13             17 
Share-based payment expenses                                  152             81 
Taxation expense recognised in income statement              (73)            602 
 
Changes in working capital: 
Trade and other receivables                                 5,675          4,658 
Trade and other payables                                  (4,129)        (4,420) 
Inventories                                                 (161)             64 
Taxes paid                                                   (82)          (443) 
                                                       (________)     (________) 
Net cash from operating activities                          3,023          3,930 
                                                       (________)     (________) 
 

Notes to the Consolidated Financial Statements

   1           General information 

The principal activities of Personal Group Holdings Plc ('the Company') and subsidiaries (together 'the Group') include transacting short-term accident and health insurance and providing employee services 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 the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2021.

The financial information for the year ended 31 December 2021 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 2021 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 27 September 2022.

   2          Accounting policies 

These June 2022 interim consolidated financial statements of Personal Group Holdings Plc are for the six months ended 30 June 2022. 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 2021.

These financial statements have been prepared in accordance with IFRS standards and IFRIC interpretations as adopted by the EU, issued and effective as at 30 June 2022.

The principal accounting policies remain unchanged from the year ended 31 December 2021. No new standards have become applicable for accounting periods commencing on or after 1 January 2022.

Notes to the Consolidated Financial Statements

   3          Segment analysis 

The format of the segmental analysis was changed in for the year ended 31 December 2022 and a full explanation of this change can be found in those financial statements. The segments used by management to review the operations of the business are disclosed below.

   1)         Affordable Insurance 

Personal Assurance Plc (PA), a subsidiary within the Group, is a PRA regulated general insurance Company and is authorised to transact accident and sickness insurance. It was established in 1984 and has been underwriting business since 1985. In 1997 Personal Group Holdings Plc (PGH) was created and became the

ultimate parent undertaking of the Group.

Personal Assurance (Guernsey) Limited (PAGL), a subsidiary within the Group, is regulated by the Guernsey Financial Services Commission and has been underwriting death benefit policies since March 2015.

This operating segment derives the majority of its revenue from the underwriting by PA and PAGL of insurance policies that have been bought by employees of host companies via bespoke benefit programmes. During 2020 PAGL began underwriting employee default insurance for a proportion of LC customers.

   2)         Other Owned Benefits 

This segment constitutes any goods or services in the benefits platform supply chain which are owned by the Group. At present this is made up of a technology salary sacrifice business trading as PG Let's Connect, purchased by the Group in 2014.

   3)         Benefits Platform 

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)         Pay and Reward 

Pay and Reward refers to the trade of Innecto, a pay and reward consultancy Company purchased in 2019. Revenue in this segment relates to consultancy and license income derived from selling Innecto digital platform subscriptions.

   5)         Other 

The other operating segment includes revenue generated from the resale of vouchers. This segment also consists of revenue generated by Berkeley Morgan Group (BMG) and its subsidiary undertakings along with any investment and rental income obtained by the Group.

Notes to the Consolidated Financial Statements

The revenue and net result generated by each of the Group's operating segments are summarised as follows,

 
                                            6 months          6 months 
                                              ended              ended 
                                           30 June 2022   30 June 2021 
                                            Unaudited        Unaudited 
                                                GBP'000        GBP'000 
Revenue by Segment 
----------------------------------------  -------------  ------------- 
Insurance (Earned Premium)                       12,224         12,477 
IT Salary Sacrifice                               5,387          6,203 
Benefits Platform                                 3,574          2,759 
Platform - Group Elimination                    (1,425)        (1,374) 
Pay & Reward                                        900            520 
----------------------------------------  -------------  ------------- 
Other Income: 
Voucher resale                                   13,848         12,082 
Other                                               128            135 
Investment income                                    29             13 
----------------------------------------  -------------  ------------- 
Group Revenue                                    34,665         32,815 
----------------------------------------  -------------  ------------- 
 
Adjusted EBITDA contribution by segment 
----------------------------------------  -------------  ------------- 
Insurance (Earned Premium)                        3,970          6,514 
IT Salary Sacrifice                                (32)           (40) 
Benefits Platform                                 1,298          1,003 
Pay & Reward                                        282            107 
----------------------------------------  -------------  ------------- 
Other                                             (149)            214 
Administrative Expenses                         (3,798)        (3,683) 
Charitable donations                               (50)           (35) 
----------------------------------------  -------------  ------------- 
Adjusted EBITDA                                   1,521          4,080 
----------------------------------------  -------------  ------------- 
Depreciation                                      (493)          (479) 
Amortisation                                      (364)          (266) 
Interest                                           (13)           (17) 
Share Based Payments Expenses                     (152)           (81) 
----------------------------------------  -------------  ------------- 
Acquisition Costs (Note 11)                        (40)              - 
----------------------------------------  -------------  ------------- 
Profit before tax                                   459          3,237 
----------------------------------------  -------------  ------------- 
 
 

All 2022 income was derived from customers that are based in the UK.

Notes to the Consolidated Financial Statements

   4          Taxation 

The tax expense recognised is based on the weighted average annual 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-month period ended 30 June 2022 was a credit of 15.9% (six-month period ended 30 June 2021: 18.6% charge). The tax income recognised in the period is mostly as a result of the application of the super-deduction capital allowances tax relief, eligible until 31 March 2023.

   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 ended     EPS  6 months ended     EPS 
            30 June 2022   Pence    30 June 2021   Pence 
 
Basic         31,210,686     1.7      31,213,128     8.4 
          --------------  ------  --------------  ------ 
Diluted       31,218,953     1.7      31,214,981     8.4 
          --------------  ------  --------------  ------ 
 

During the first six months of 2022 Personal Group Holdings Plc paid dividends of GBP1,654,000 to its equity shareholders (2021: GBP1,592,000). This represents a payment of 5.30p per share (2021: 5.10p).

 
                                                       6 months ended                        6 months ended 
                                                         30 June 2022                          30 June 2021 
                                                              GBP'000                               GBP'000 
 
Dividends paid or provided for 
 during the period                                              1,654                                 1,592 
                                                              (_____)                               (_____) 
 
   6         Goodwill 
 
                                              PG Let's           Innecto             Total 
                                               Connect 
                                               GBP'000           GBP'000           GBP'000 
 Cost 
 At 1 January 2022                              10,575             2,121            12,696 
 Additions in the year                               -                 -                 - 
                                            (________)        (________) 
                                             _________           _______        (________) 
 At 30 June 2022                                10,575             2,121            12,696 
                                            (________)        (________) 
                                             _________         _________        (________) 
 Amortisation and impairment 
 At 1 January 2022                                   -                 -                 - 
 Impairment charge for year                          -                 -                 - 
                                            (________)        (________)        (________) 
                                             _________         _________         _________ 
 At 30 June 2022                                     -                 -                 - 
                                            (________)        (________)        (________) 
 Net book value at 30 June 2022                 10,575             2,121            12,696 
                                            (________)        (________)        (________) 
 Net book value at 31 December 2021             10,575             2,121            12,696 
                                            (________)        (________)        (________) 
 

Notes to the Consolidated Financial Statements

   7        Intangible assets 
 
                          Customer           Computer       Innecto   Internally           Work        Total 
                             Value           software    Technology    Generated    in Progress 
                                      and development                   Computer 
                                                                        Software 
                           GBP'000            GBP'000       GBP'000      GBP'000        GBP'000      GBP'000 
 Cost 
 At 1 January 2022           2,374              2,287           298          506            198        5,663 
 Transfers                       -                  -             -            -              -            - 
 Additions                       -                191             -            -            282          473 
 Disposals                       -                  -             -            -              -            - 
                        (________)         (________)    (________)   (________)     (________)   (________) 
 At 30 June 2022             2,374              2,478           298          506            480        6,136 
                        (________)         (________)    (________)   (________)     (________)   (________) 
 Amortisation 
 At 1 January 2021           2,059              1,293           170          504              -        4,026 
 Amortisation charge 
  for the year                  73                259            30            2              -          364 
 Provided in the                 -                  -             -            -              -            - 
  period 
 Disposals in the                -                  -             -            -              -            - 
  period 
                        (________)         (________)    (________)   (________)     (________)   (________) 
 At 30 June 2022             2,132              1,552           200          506              -        4,390 
                        (________)         (________)    (________)   (________)     (________)   (________) 
 Net book amount 
  at 30 June 2022              242                926            98            -            480        1,746 
                        (________)         (________)    (________)   (________)     (________)   (________) 
 Net book amount 
  at 31 December 
  2021                         315                994           128            2            198        1,637 
                        (________)         (________)    (________)   (________)     (________)   (________) 
 
   8          Property, plant and equipment 
 
                     Freehold    Motor vehicles   Computer    Furniture   Leasehold   Right of        Total 
                      land and                    equipment    fixtures    improve-   use Assets 
                     properties                               & fittings    ments 
                      GBP'000       GBP'000       GBP'000      GBP'000     GBP'000     GBP'000       GBP'000 
Cost 
At 1 January 2022         5,037             157       1,112        2,310         38        1,204          9,858 
Additions                     -               -         221            1          -          250            472 
Disposals                     -               -           -            -          -         (36)           (36) 
                       (______)        (______)    (______)     (______)   (______)     (______)       (______) 
At 30 June 2022           5,037             157       1,333        2,311         38        1,418         10,294 
                       (______)        (______)    (______)     (______)   (______)     (______)       (______) 
Depreciation 
At 1 January 2022         1,828             125         786        1,265         37          784          4,825 
Provided in the 
 period                      43               5         131          108          1          205            493 
Disposals                     -               -           -            -          -         (12)           (12) 
                       (______)        (______)    (______)     (______)   (______)     (______)       (______) 
At 30 June 2022           1,871             130         917        1,373         38          977          5,306 
                       (______)        (______)    (______)     (______)   (______)     (______)       (______) 
Net book amount 
 at 
 30 June 2022             3,166              27         416          938          -          441          4,988 
                       (______)        (______)    (______)     (______)   (______)     (______)       (______) 
Net book amount 
 at 
 31 December 2021         3,209              32         326        1,045          1          420          5,033 
                       (______)        (______)    (______)     (______)   (______)     (______)       (______) 
 

Notes to the Consolidated Financial Statements

   9   Financial Investments 
 
                        At 30 June   At 31 December 
                              2022             2021 
                         Unaudited          Audited 
                           GBP'000          GBP'000 
 Bank deposits               1,733            2,596 
 Equity Investments          1,256                - 
                        (________)       (________) 
                             2,989            2,596 
                       (_________)      (_________) 
 

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).

Bank deposits, held at amortised cost, are due within 6 months and the amortised cost is a reasonable approximation of the fair value. These would be included within Level 2 of the fair value hierarchy.

Equity Investments are held at fair value and are considered Level 1 financial assets.

   10         Long Term Incentive Plan (LTIP) 

LTIP 2021

During the period, the Remuneration Committee approved a second tranche of share awards under the existing LTIP approved on 6 April 2021. Further details of the award can be found in the RNS announcement from 20 April 2022.

Under the scheme share options of Personal Group Holdings Plc are granted to senior executives with an Exercise Price of 5p (nominal value of the shares). The share options have various market and non-market performance conditions which are required to be achieved for the options to vest. The options also contain service conditions that require option holders to remain in employment of the Group. The market and non-market performance conditions are set out below.

Total Shareholder Return (Market condition)

50% of the awards vest under this condition. Subject to Compound Annual Growth Rate (CAGR) of the Total Shareholder Return (TSR) over the Performance Period.

EBITDA Targets (Non-market condition)

35% of the awards vest under this condition. Subject to cumulative EBITDA over the Performance Period.

Environmental, social and governance targets ("ESG") Targets (Non-market condition)

Up to 15% of the awards vest under this condition. The awards shall vest upon the Remuneration Committee determining that all ESG targets have been met.

The fair value of the of the share options is estimated at the grant date using a Monte-Carlo binomial option pricing model for the market conditions, and a Black-Scholes pricing model for non-market conditions.

Notes to the Consolidated Financial Statements

However, the above performance condition is only considered in determining the number of instruments that will ultimately vest.

There are no cash settlements alternatives. The Group does not have a past practice of cash settlement for these share options. The Group accounts for the LTIP as an equity-settled plan.

In total, GBP142,000 of employee share-based compensation has been included in the consolidated income statement to 30 June 2022 (2021: GBP76,000). The corresponding credit is taken to equity. No liabilities were recognised from share-based transactions. The remaining GBP10,000 of share-based compensation expense relates to the Company Share Option Plan (CSOP).

   11         Post balance sheet events 

On 1(st) July 2022 Personal Group Holdings Plc acquired 100% of Quintige Consulting Group Limited ("QCG") for GBP965,652.

Included within the half year financial statements are GBP40,000 of acquisition costs incurred in the purchase of QCG.

   12         Financial calendar for the year ending 31 December 2022 

The Company announces the following dates in its financial calendar for the year ending 31 December 2022:

-- Preliminary results for the year ending 31 December 2022 - March 2023

-- Publication of Report and Accounts for 2022 - March 2023

   --      AGM 
-           April/May 2023 

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END

IR EAPNKAFFAEFA

(END) Dow Jones Newswires

September 27, 2022 02:01 ET (06:01 GMT)

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