TIDMPGH
RNS Number : 2630K
Personal Group Holdings PLC
21 April 2020
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
PERSONAL GROUP HOLDINGS PLC
("Personal Group", "Company" or "Group")
Preliminary Results for the Year Ended 31 December 2019
Another solid year with revenue and pre-tax profit 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 2019 together with comments on the impact of the
coronavirus pandemic (COVID-19) on the business.
2019 Highlights
Financial
-- Group revenue of GBP70.9m (2018: GBP55.3m) increased by 28%
o Includes GBP18.4m transactional spend and commission on Hapi
(2018: GBP6.9m)
-- Adjusted EBITDA of GBP11.0m (2018: GBP11.4m) down 4%
-- Profit before tax of GBP10.5m (2018: GBP10.2m) increased 3%
-- Basic EPS of 28.4p (2018: 27.2p) up 4%
-- Balance sheet remains strong with cash and deposits of GBP17.0m and no debt
-- Surplus capital resources of GBP13.8m over required resources of GBP4.9m
-- Dividend per share paid in the period up 1.3% to 23.3p (2018: 23.0p)
Operational
-- Group's refined strategy proving effective
-- Accessed new insurance markets, enabling people on a
contingent worker basis to benefit from our insurance products
-- PG Let's Connect revenue up 26% to GBP18.8m with adjusted
EBITDA up 43% to GBP1.7m without any headcount increase
-- SaaS revenue of GBP21.5m is up 146% fuelled by an increase in
transactional spend from GBP6.9m to GBP18.4m
o Hapi users up 28% to 410,000 active employees with over 175
organisations using the platform
o Successful acquisition of Innecto enables Personal Group to
engage with a greater variety of employers
o Sage Employee Benefits launched in September 2019 and Sage
have launched a new marketing campaign in Q1 2020
-- Marketing team overhauled and new website launched
-- ISO 27001 accreditation for the Group
Conronavirus Pandemic (COVID-19)
-- Safety and welfare of staff has been a priority, with almost
all employees working from home in accordance with UK Government
advice
-- Business continuity plans put in place - the Group has near
full capability to support customers and policyholders and maintain
business operations
-- Detailed operational plans in place across the business
including furloughing c22% of employees and developing alternative
sales and retention strategies
-- Financial impact on 2020 and 2021 modelled and stressed,
considering the potential impact on premiums and claims, solvency
ratios, liquidity and non-insurance activities
-- 2020 will be adversely impacted but confident business will
remain profitable supported by strong balance sheet
-- Q2 dividend to be reduced to 1.5p per share; this shortfall
and the remaining 2020 dividends will be revisited later in the
year once the situation is clearer
Deborah Frost, Chief Executive of Personal Group, commented:
"2019 saw a strong performance across the Group amidst a
challenging market backdrop, with adjusted EBITDA of GBP11.0m -
ahead of market expectations, reflecting the strength of the
underlying business. Our refreshed strategy, announced in September
2019, is starting to show positive signs.
The impact of COVID-19 on the UK and world-wide economy is very
far reaching. It is clearly too early to accurately assess the
final impact of the outbreak on our customers and our business.
However, we have a robust recurring revenue model across different
parts of the Group, including insurance, our benefits platform
Hapi, and Innecto Digital products. Long-established client
relationships and repeat business forms the core of the Innecto and
Let's Connect business models.
The effect of COVID-19 is likely to have short as well as long
term implications for the Group - we anticipate our insurance
claims ratios could increase this year but our messages about
protecting the unprotected, being dependable and paying claims are
well received by clients and build on the trust we already have
with them, their employees and our policy-holders.
We also expect PG Let's Connect and Innecto revenues and profits
to be impacted over the short-term by the global slowdown, as
clients defer decisions about pay and benefits until later in the
year.
To mitigate these effects, we have put in place alternative
activities including switching our face to face team to telesales
and focussing on policy-holder retention. Whilst we expect that the
ongoing impacts of the virus could have a material impact on EBITDA
for 2020, and into 2021, we remain confident that the business will
be profitable with a strong balance sheet and no debt. In addition,
we have significant headroom and are taking actions to protect the
business.
Turning our attention to the next 6-12 months, we are confident
that our key messages around connecting and protecting workers,
both employed and contingent, continue to resonate strongly."
S
For more information please contact:
Personal Group Holdings Plc
Deborah Frost / Mike Dugdale +44 (0)1908 605 000
Cenkos Securities Plc
Max Hartley / Callum Davidson (Nomad) +44 (0)20 7397 8900
Russell Kerr (Sales)
Hudson Sandler
Nick Lyon / Lucy Wollam +44 (0)20 7796 4133
Notes to Editors
Personal Group Holdings Plc (AIM: PGH) is a technology enabled
employee services business, working with employers to drive
productivity though better employee engagement and a more motivated
workforce. With over 35 years' experience, the Company provides
employee benefits and services to a large number of 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),
the provision of e-payslips, and pay and reward consulting via
Innecto, the leading independent UK consultancy acquired in 2019.
Third party services include retail discounts, employee assistance
programmes, wellbeing programmes and salary sacrifice cars and
bikes.
The product 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 to the majority of the working
population in the UK; 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, in combination with its face-to-face method
of communicating with employees, delivers a compelling offer 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 diverse range
of sectors. Clients include: Arsenal F.C., Barchester Healthcare
Ltd, DHL Supply Chain Limited, The Go-Ahead Group plc, Samworth
Brothers Ltd, Independent Television News, Stagecoach Group plc and
Wincanton plc.
For further information, please see www.personalgroup.com
Chairman's Introduction:
Personal Group has a rare consistency - we have again delivered
a good profit from our operations and, once again, increased our
dividend to shareholders. We continue to deliver benefits, both in
financial terms and in peace of mind, to individual employees, many
of whom make up the working backbone of the UK. This is reflected
in our refreshed mission to connect the unconnected, protect the
unprotected and equip employers to engage and reward their
employees.
Underneath this consistency, things are changing within our
market. Our clients are more thoughtful in how they engage with
their workforce to improve their wellbeing. Many have more involved
and sophisticated procurement approaches to tackle this.
Consequently, our engagement with our existing and prospective
clients is changing. We are becoming more targeted and consistent
in our account management. We have a much more integrated style
which takes advantage of a more able marketing function within the
Group and the strengths of our combined business propositions and
salesforce. All of which is led by a new dynamic Chief Executive,
Deborah Frost who, having been a Non-Executive Director of the
Group since September 2015, was appointed on 28 February 2019.
Overall, our business delivered revenue up GBP16m (28%) from
last year and profit before tax slightly improved. However, we
consider Adjusted EBITDA to be a more appropriate measure of our
performance as it has a consistent composition and does not include
one-off elements that might distract from the underlying
performance.
Adjusted EBITDA for 2019 was lower than 2018. This reduction was
less than 4%, reflecting that the growth in revenue came
predominantly from those areas of the business where the margin is,
by nature, lower and costs that, whilst below budget, were higher
than 2018. Increased investment also helped improve the marketing
and sales capabilities and introduced some necessary credentials in
system security - recognised by our ISO 27001 accreditation.
Many people have contributed to the Personal Group throughout
2019, I and the Board thank all our colleagues for their continued
enthusiasm and efforts. In addition, we do not take for granted the
continued support of our shareholders large and small. Thank you
all.
Fairness is an often-stated aspiration by companies, but making
it happen is rarely discussed. Making aspects of financial security
accessible to more people at a fair price is what Personal Group
does, consistently. Our insurance products have been providing
benefits for people in their time of need for over 35 years. Our
hospital, convalescence and death benefit plans are designed to
offer support and assurance and the discounts offered through our
benefit platform help reduce the burden of cost on a daily basis.
I'm confident our strong financial position and operational
resilience will enable us to continue to fulfil these commitments
during the current challenges caused by COVID-19.
Chief Executive operational update
Core Insurance Business
Since my appointment we've spent time focussing on what is
important in Personal Group. We provide insurance and employee
benefits to hundreds of thousands of employees all over the UK, but
what is our key purpose and unique offer in a crowded
marketplace?
We have identified that the central purpose of the core
insurance business is to 'protect the unprotected' and 'connect the
unconnected'. Behind these two statements is a recognition that
many of our policyholders are the working backbone of the UK. In
their roles as bus drivers, food manufacture operatives, care home
staff or retail employees, not all have employer-paid benefits if
they are ill, need to attend hospital or, in the worst case, die.
Our field sales team sit down 1-2-1 with over 73,000 employees a
year to connect them to the benefits their employer offers them,
via Hapi on a mobile phone app, and over 64,000 employees to talk
about protecting themselves and their loved ones from the financial
impact of an unexpected event. Personal Group's insurance business
has been working with client organisations like these to ensure
that workers can have access to simple, fair-value insurance
products for over 35 years.
We believe in making it easy to claim, with our Milton Keynes
Customer Relations team handling over 32,000 claims from
policyholders in 2019. We've also been developing options for
employers to offer our insurance products to their staff on
temporary or zero-hours contracts and agency workers. In reflecting
the reality of the UK workforce and including workers as well as
employees on site visits, we can improve productivity of our field
sales team and protect more people.
When I took over the business our insurance segment was starting
to contract. Policyholder numbers have been reducing for a few
years but increases to premiums had meant that policy income
remained static. In 2019, for the first time, premium income shrank
slightly. I have made reversing this trend a major focus, and
whilst significant improvement in the financial performance will
not be immediate, we are very pleased with the foundations that we
are laying to widen our opportunities.
But we've also recognised that the long-term sustainability of
the business lies in expanding our footprint so that we compete
beyond our heartland clients. Some of these jobs may be replaced by
robots and AI over the next 15 years, so we're developing
propositions to cover a wider part of the economy such as the
public sector and talent-led businesses. My job has been to help my
management team breathe new energy into these developing areas and
set challenging goals to grow the business beyond our insurance
core.
SaaS
Our benefits platform Hapi provides a customisable platform
where employers can combine all their current provision (pension,
childcare vouchers etc) into our simple mobile and desktop product.
They can then select from an array of other products and services:
payslips, reward and recognition, salary sacrifice technology, cars
and cycles as well as our offers and discounts to build the right
benefit solution for their teams. Our technology, particularly the
mobile app, is outstanding and is a great solution for clients
whose teams aren't sitting behind a desk all day. We've had real
breakthroughs this year in working with new partners (ThinkMoney)
and new clients (Prince's Trust through Innecto). The SaaS revenue
from Hapi has grown significantly in 2019, from GBP1.8m to GBP3.1m,
and the success of the Hapi solution is shown by the massive growth
in our top-line revenue on discounts and offers. Our goal is to
reach 1 million Hapi users by 2025 and we're well on the way with
our active users up by 28% in 2019 to 410,139. Over 175
organisations use the Hapi platform for their employee benefits,
customising it to meet their own branding and employee
requirements. It's not always called Hapi - clients call it
different names from 'Smile', 'The Benefits Room', 'MyHub' to 'The
Pantry'.
Our access to the vast but fragmented SME market is primarily
through Sage's employee benefits product (Sage Employee Benefits)
for Sage customers. Sage's focus on Making Tax Digital for their
clients in 2019 meant our re-launched project suffered delays, but
a new management team within Sage, and significant internal
support, have driven progress in developing this growth
opportunity. A new marketing campaign in Q1 2020 by Sage should
drive awareness and Sage have agreed to underwrite our cost of the
platform for 2020 as part of their commitment to the roll-out.
Innecto have completed their first 10 months in the Personal
Group family. Innecto Digital, their digital pay management suite,
has been completely re-coded and re-launched on the Outsystems
platform, bringing the same level of scalability, security and
analytics as Hapi. Current clients are being migrated onto the new
system in early 2020 and new opportunities are being lined up. They
have continued to grow their consultancy business this year.
Innecto's drive, growth mindset and client focus have brought new
ideas into Personal Group too.
PG Let's Connect
Finally, PG Let's Connect have had a splendid year - both
delivering on their commitment to their adjusted EBITDA number
(+43% on 2018), with no increase in headcount, at the same time as
developing new products to meet the requirements of the NHS. We're
very excited about the opportunities we bring to NHS Trusts by
simplifying their benefits offer, putting everything in one place,
and into staff hands via the mobile app. The platform includes
access to salary sacrifice Home Technology through Let's Connect,
and cars and cycle to work schemes. We have also wrapped in access
to their pension scheme, the excellent NHS employee support line,
and their own discounts and offers. The NHS employs over 1 million
workers in the UK. We are in final contract discussions with two
Trusts and are working with others.
Team
Our Marketing team has been overhauled, with new faces and fresh
ideas. We have recently launched a new website which places our
'protect the unprotected' offer front and centre and includes real
policyholder and client case studies. I'm happy that it reflects
who we are and what we do.
Financials
Group revenue for the year increased by 28% to GBP70.9m (2018:
GBP55.3m). The Group saw strong revenue growth from SaaS and PG
Let's Connect whilst the insurance business was hindered by a
slowdown of new client business wins resulting in fewer new
policies written.
Group revenue growth in SaaS was driven by increased user spend
on Hapi and the fact that the provision of products such as
reloadable cards, e-vouchers and cinema tickets are now serviced
largely in-house. An increase in paid-for Hapi subscriptions and
the addition of consultancy income following the acquisition of
Innecto have also helped to drive this growth.
PG Let's Connect significantly improved its year-on-year
performance. The Company expects this growth to continue following
a positive reaction to the new proposition created for the NHS.
Adjusted EBITDA for the year has dropped to GBP11.0m (2018:
11.4m), despite increased revenue. The improved trading
performances from PG Let's Connect of GBP0.5m and SaaS of GBP0.4m
which, by nature, are lower margin businesses, were offset by the
insurance business being GBP1.5m down on last year. Insurance
continues to contribute the majority of Adjusted EBITDA* and the
reduced contribution reflects the reducing policy numbers.
The Group 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 includes the planned investment in sales and
marketing to drive additional sales opportunities to reverse the
current decline in the insurance business and additional legal
costs incurred in pursuing the damages from a long standing
judgement, awarded to the Group in October 2014, which is expected
to come to a successful conclusion early in 2021.
Profit before tax was GBP10.5m during the year (2018: GBP10.2m).
This increase was predominantly due to the GBP1.3m (2018: GBP0.6m)
release of the tax provision and the increase in trading
performance in PG Let's Connect and SaaS, offset by reduced
contribution from the insurance business. The tax charge for the
year was GBP1.6m (2018: GBP1.8m), resulting in profit after tax for
the year of GBP8.8m (2018: GBP8.4m). Basic EPS was 28.4p (2018:
27.2p).
The Company paid a total dividend of 23.3p per share over the
year (2018: 23.0p), representing a 1.3% increase over the prior
year. The Group's core insurance business retains its strong
profitability, despite facing new business challenges, and
continues to underpin the dividend and support investment across
the wider business. Whilst profits remain relatively flat, the
Company has sufficient distributable reserves to support a
progressive dividend policy as the Group works towards implementing
its strategy. The first quarterly dividend for 2020, of 5.9p per
share, reflects this policy and represents a 1.3% increase over the
corresponding period in 2019. The dividend was paid to shareholders
on 27 March 2020.
The Group's balance sheet remains strong, with cash and deposits
at the year-end of GBP17.0m (2018: GBP17.7m) and no debt.
The slight reduction in cash balances in the year was due to a
combination of Group trading, the decision to sell two properties
held by the Company, realising GBP0.5m, the purchase of Innecto for
a cash consideration of GBP3.2m and the receipt of GBP1.1m for
newly created shares purchased at fair market value by two
directors of Innecto, including Deborah Frost.
The Group's main underwriting subsidiary, Personal Assurance Plc
(PA), continues to maintain a conservative solvency ratio of 259%
(unaudited), with a surplus over its Solvency Capital Requirement
of GBP6.6m. The Company has consistently maintained a prudent
position in relation to its Solvency II requirement.
Outlook
Despite the substantial global impact of the COVID-19 virus,
which necessitates a significant degree of prudence for 2020, we
remain positive in terms of the longer-term outlook for the
business. We have implemented our contingency plans and almost all
of our employees are currently working from home, in accordance
with UK Government advice. We have considered the developing
COVID-19 situation in detail and have modelled numerous scenarios.
Whilst we expect that the ongoing impacts of the virus could have a
material impact on EBITDA for 2020, and into 2021, we remain
confident that the business will remain profitable with a strong
balance sheet and no debt. In addition, we have significant
headroom and are taking actions to protect the business.
These include furloughing a number of employees, setting up
outbound sales activity with our field sales teams whilst
continuing to process claims and serve our customers. The changes
we have implemented this year will undoubtedly take time to bear
fruit, and they will be joined by new developments in 2020, but at
the end of my first year, I recognise the strength, resilience and
determination of not just my senior team but the wider Personal
Group family to create and drive the business forward into new and
existing markets.
Whilst the current challenges being faced in the light of
COVID-19 may temporarily change our focus in the short term, they
may also present longer-term opportunities to reinforce our central
purpose of connecting the unconnected and protecting the
unprotected further.
Consolidated Income Statement
2019 2018
GBP'000 GBP'000
Continuing Operations
Gross premiums written 30,369 31,445
Outward reinsurance premiums (204) (231)
Change in unearned premiums 59 28
Change in reinsurers' share
of unearned premiums (10) (10)
(_________) (_________)
Earned premiums net of reinsurance 30,214 31,232
Other insurance related income 191 218
IT salary sacrifice income 18,794 14,970
SaaS income 21,459 8,729
Other non-insurance income 100 115
Investment income 131 83
(_________) (_________)
Revenue 70,889 55,347
(_________) (_________)
Claims incurred (6,670) (7,175)
Insurance operating expenses (15,964) (15,073)
Other insurance related expenses (210) (261)
IT salary sacrifice expenses (17,157) (13,851)
SaaS costs (20,930) (8,561)
Share-based payment expenses (19) (117)
Charitable donations (100) (100)
Amortisation of intangible assets (489) (661)
(___________) (___________)
Expenses (61,539) (45,799)
(___________) (___________)
Operating profit 9,350 9,548
Finance costs (131) (148)
Release of provisions 1,259 646
Share of profit/(loss) of equity-accounted
investee net of tax 9 164
(_________) (_________)
Profit before tax 10,487 10,210
Tax (1,649) (1,819)
(_________) (_________)
Profit for the year 8,838 8,391
The profit for the year is attributable to equity holders
of Personal Group Holdings Plc
Earnings per share Pence Pence
Basic 28.4 27.2
Diluted 28.4 27.2
There is no other comprehensive income for the year and, as a
result, no statement of comprehensive income has been produced. All
operations are classed as continuing activities.
Consolidated Balance Sheet at 31 December 2019
2019 2018
GBP'000 GBP'000
ASSETS
Non-current assets
Goodwill 12,696 10,575
Intangible assets 1,301 500
Property, plant and equipment 5,984 6,040
Investment property - 130
(_________) (_________)
19,981 17,245
(__) (______) (________)
Current assets
Financial assets 2,565 2,530
Trade and other receivables 18,549 16,532
Equity-accounted investee - 50
Reinsurance assets 121 187
Inventories - Finished Goods 746 643
Cash and cash equivalents 14,476 15,148
(_________) (_________)
36,457 35,090
(___) (______) (_________)
Total assets 56,438 52,335
(__________) (__________)
Consolidated Balance Sheet at 31 December 2019
2019 2018
GBP'000 GBP'000
EQUITY
Equity attributable to equity
holders
of Personal Group Holdings
Plc
Share capital 1,561 1,544
Share premium 1,134 -
Capital redemption reserve 24 24
Other reserve (230) (210)
Profit and loss reserve 35,526 33,937
(_________) (_________)
Total equity 38,015 35,295
(_________) (_________)
LIABILITIES
Non-current liabilities
Deferred tax liabilities 302 102
Trade and other payables 290 356
Current liabilities
Provisions - 1,259
Trade and other payables 15,043 12,233
Insurance contract liabilities 2,104 2,376
Current tax liabilities 684 714
(_________) (_________)
17,831 16,582
(_________) (_________)
(_________) (_________)
Total liabilities 18,423 17,040
(_________) (_________)
(_________) (_________)
Total equity and liabilities 56,438 52,335
(_________) (_________)
Consolidated Statement of Changes in Equity for the year ended
31 December 2019
Equity attributable to equity holders of Personal Group Holdings
Plc
Share Share Capital Other Profit Total
capital Premium redemption reserve and loss equity
Reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 January
2019 1,544 - 24 (210) 33,937 35,295
(________) (______) (______) (______) (________) (________)
Dividends - - - - (7,244) (7,244)
Employee share-based
compensation - - - - 19 19
Proceeds of SIP* share
sales - - - - 20 20
Cost of SIP shares sold - - - 44 (44) -
Cost of SIP shares purchased - - - (64) - (64)
Shares issued in the
year 17 1,134 - - - 1,151
(________) (________) (________) (________) (________) (________)
Transactions with owners 17 1,134 - (20) (7,249) (6,118)
(________) (________) (________) (________) (________) (________)
Profit for the year - - - - 8,838 8,838
(________) (________) (________) (________) (________) (________)
Total comprehensive income for
the year - - - - 8,838 8,838
(________) (_______) (________) (________) (________) (________)
Balance as at 31 December
2019 1,561 1,134 24 (230) 35,526 38,015
(________) (______) (______) (________) (__________) (_________)
* PG Share Ownership Plan (SIP)
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 Capital Available Other Profit Total
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)
Consolidated Cash Flow Statement
2019 2018
GBP'000 GBP'000
Net cash from operating activities
(see next page) 8,668 8,325
(__________) (__________)
Investing activities
Additions to property, plant and equipment (734) (1,024)
Additions to intangible assets (266) (178)
Proceeds from disposal of property, plant and
equipment 398 9
Proceeds from disposal of investment property 188 -
Purchase of financial assets (34) (105)
Proceeds from disposal of financial
assets - 2,056
Interest received 131 82
Dividends received from equity accounted
investee 59 750
Dividends received - 8
Acquisition of subsidiary, net of cash
acquired (2,714) -
(__________) (__________)
Net cash used in investing activities (2,972) 1,598
(__________) (__________)
Financing activities
Proceeds from the issue of shares 1,151 -
Interest paid (2) (28)
Purchase of own shares by the SIP (64) (79)
Proceeds from disposal of own shares
by the SIP 20 132
Payment of lease liabilities (229) (354)
Dividends paid (7,244) (7,087)
(__________) (__________)
Net cash used in financing activities (6,368) (7,416)
(__________) (__________)
Net change in cash and cash equivalents (672) 2,507
Cash and cash equivalents, beginning
of year 15,148 12,641
Cash and cash equivalents, end of year 14,476 15,148
(_________) (_________)
Consolidated Cash Flow Statement 2019 2018
GBP'000 GBP'000
Operating activities
Profit after tax 8,838 8,391
Adjustments for
Depreciation 970 797
Amortisation of intangible assets 489 661
(Profit) / loss on disposal of property,
plant and equipment (127) 59
Profit on disposal of investment property (60) -
Realised net investment loss - 10
Interest received (131) (82)
Dividends received - (8)
Interest charge 131 148
Share of profit of equity-accounted
investee, net of tax (9) (164)
Share-based payment expenses 19 94
Taxation expense recognised in income
statement 1,649 1,819
Changes in working capital
Trade and other receivables (1,520) (1,920)
Trade and other payables 1,406 865
Provisions (1,259) (646)
Inventories (103) (83)
Taxes paid (1,625) (1,616)
(__________) (__________)
Net cash from operating activities 8,668 8,325
(__________) (__________)
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. Also included in this segment,
from 1 March 2019, is consultancy and license income derived from
selling Innecto digital platform subscriptions.
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.
IT Salary
Core Insurance Sacrifice SaaS Other Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating segments
2019
Revenue
Earned premiums net
of reinsurance 30,205 - 9 - 30,214
Other income - Insurance
Related 3 - - 188 191
Other income - IT Salary
Sacrifice - 18,794 - - 18,794
Other income - Platform - - 3,104 - 3,104
Other income - Transactional
and commission - - 18,355 - 18,355
Other income - - - 100 100
Investment income - - - 131 131
(_________) (_________) (_________) (_________) (_________)
30,208 18,794 21,468 419 70,889
Total revenue (_________) (_________) (_________) (_________) (_________)
Net result for year
before tax 7,322 2,764 219 182 10,487
PG Let's Connect -
Tax provision - (1,259) - - (1,259)
Amortisation - Acquisition
intangibles - 53 171 - 224
Acquisition costs - - - 145 145
Interest 91 23 17 - 131
Share based payments - - - 19 19
Depreciation 791 112 58 9 970
Amortisation (other) 79 55 131 - 265
Adjusted EBITDA* 8,283 1,748 596 355 10,982
(_________) (_________) (_________) (_________) (_________)
Segment assets 25,195 12,023 4,669 14,551 56,438
Segment liabilities 7,948 7,045 3,430 - 18,423
Depreciation and amortisation 870 220 360 9 1,459
* Adjusted EBITDA is defined as earnings before interest, tax,
depreciation, amortisation of intangible assets, goodwill
impairment, share-based payment expenses, corporate acquisition
costs, restructuring costs, write-back of contingent consideration
and release of tax provision.
IT Salary
Core Insurance Sacrifice SaaS Other Group
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
2. Taxation comprises United Kingdom corporation tax of
GBP1,600,000 (2018: GBP1,650,000) and a deferred tax charge of
GBP49,000 (2018: GBP169,000)
3. The basic and diluted earnings per share are based on profit
for the financial year of GBP8,838,000 (2018: GBP8,391,000) and on
31,118,589 basic (2018: 30,798,840) and 31,122,136 diluted (2018:
30,806,261) ordinary shares, the weighted average number of shares
in issue during the year.
4. The total dividend paid in the year was GBP7,244,000 (2018: GBP7,087,000)
This preliminary statement has been extracted from the 2019
audited financial statements that will be posted to shareholders in
due course. The statutory accounts for each of the two years to 31
December 2018 and 31 December 2017 received audit reports, which
were unqualified and did not contain statements under section 498
(2) or (3) of the Companies Act 2006. The 2018 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 SEUFWSESSELL
(END) Dow Jones Newswires
April 21, 2020 02:00 ET (06:00 GMT)
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