Half-yearly Report
Personal Group Holdings Plc - Interim Statement
For the 6 months ended 30 June 2008
Enquiries:
Personal Group Holdings Plc Tel: 0207 367 8888(on 29/9/08)
Christopher Johnston, Chairman 01908 605000 ext 235 (thereafter)
Ken Rooney, Managing Director
John Barber, Finance Director
Cenkos Securities
Stephen Keys Tel: 0207 397 8900
Bankside Consultants
Simon Rothschild Tel: 0207 367 8888
Interim statement for the six months to 30 June 2008
Personal Group Holdings Plc is one of the UK's leading providers of employee
benefits insurance and consultancy.
Highlights
2008 2007 %
£m £m
Profit before tax 4.4 4.2 +5
Total revenue 13.2 13.2 -
2008 2007 %
pence pence
Earnings per share (basic) 10.2 9.8 +4
Dividends per share paid in 2008 9.9 9.5 +4
Ken Rooney, Chief Executive, commented:
"Thirteen new benefit programmes were launched in the first half of 2008
including those for Vision Express,
UK Mail and Barchester Healthcare. This new business will begin to show through
in revenue in the second half of 2008 and in 2009. In addition, renewal
programmes for our established host employers generated significant new
insurance sales opportunities. Our core hospital plan and death benefit
policies have continued to perform very strongly.
Although progress for our Voluntary Group Income Protection project has not
gathered momentum as fast as anticipated we have introduced seven new host
companies to the scheme in the first full year of operation.
Our Perflex software continues to attract more users with 320,000 employees now
having access to the system from 88 companies."
Chairman's Statement
Group profit before tax (PBT) for the period was £4.4m (2007: £4.2m).
Revenues from our Personal Hospital Plan (PHP) and Death Benefit (DB), our core
employee benefit related business policies, increased to £8.1m and £1.1m
respectively (2007: £7.9m and £0.9m respectively) as the improved new business
production achieved in 2007 began to feed into 2008.
New business in the first half of 2008 showed an improvement over the
corresponding period in 2007 and exceeded our all time first half year record
set in 2005. Expenses, in particular travel and accommodation costs, for our
expanded field based employed sales team increased from £2.3m in 2007 to £2.6m
in 2008.
PBT generated from investment income and our Berkeley Morgan (BM) operation
totalled £1.0m (2007: £1.1m). Our loan interest charge was reduced from £0.2m
in the first half of 2007 to less than £0.1m in the current period as a result
of repayments made in 2007.
Our Voluntary Group Income Protection (VGIP) sales have not moved ahead as fast
originally anticipated. Productivity and penetration has improved for VGIP but
availability of suitable host companies for this product
has come through more slowly than expected.
We are already seeing more candidates wanting to join our field sales operation
as other companies cut back
on their sales budgets and reduce the size of their sales teams. Our voluntary
schemes and low cost employee benefit programmes are improving their appeal to
employers faced with increasing staff costs and reduced profit margins.
We continue to hold a substantial proportion of our tangible assets in cash and
cash equivalents £7.4m (31 December 2007: £9.2m) and UK treasury loan stock £
3.0m (31 December 2007: £3.0m). The bid market valuation of our portfolio of
quoted UK equities totalled £0.9m (31 December 2007: £0.9m). Unrealised losses
recognised directly into equity were less than £0.1m. Our freehold property in
Blackburn, previously occupied by our BM operation, has now been let on a 10
year lease at an initial rent of £100,000 per annum.
After provision for taxation there is a surplus for the period of £3.1m (2007:
£3.0m) which has been added to equity. Shareholders' funds at 30 June 2008 were
£26.5m (2007: £24.1m) which represents 87p per share (2007: 79p per share).
As reported in my chairman's statement for the year ended 31 December 2007 the
directors have chosen to pay four dividends a year. The third quarterly
dividend for 2008 of 3.3 pence per share was declared on 21 August 2008 and was
paid today. I anticipate that the final quarterly dividend for 2008 will be
declared in November 2008 and will be paid in December 2008.
We have had an excellent first half of 2008 and there is every indication that
the momentum created will continue in line with directors' expectations.
My thanks to all policyholders, employees, agents, consultants and host
companies for their contribution to our continuing success.
Christopher W T Johnston
Chairman
26th September
Personal Group Holdings Plc - Interim Statement
For the 6 months ended 30 June 2008
Condensed consolidated interim income statement
Note 6 months 6 months 12 months
ended 30 ended 30 ended 31
June 2008 June 2007 December 2007
Unaudited Unaudited Audited
£000 £000 £000
Gross premiums written 8,081 7,946 16,007
Change in unearned premiums (28) (31) 31
______ ______ ______
Net premiums written 8,053 7,915 16,038
Other income:
Insurance related 3,850 3,987 7,769
Non-insurance related 867 811 1,746
Investment income 392 512 848
______ ______ ______
Revenue 13,162 13,225 26,401
______ ______ ______
Claims incurred (1,611) (1,658) (3,080)
Insurance operating expenses (3,655) (3,492) (7,084)
Other expenses:
Insurance related (2,504) (2,738) (5,495)
Non-insurance related (882) (867) (1,736)
Charitable donations (40) (40) (80)
______ ______ ______
Expenses (8,692) (8,795) (17,475)
______ ______ ______
Results of operating activities 4,470 4,430 8,926
Finance costs (67) (189) (355)
______ ______ ______
Profit before tax 4,403 4,241 8,571
Tax (1,320) (1,275) (2,213)
______ ______ ______
Profit for the period 3,083 2,966 6,358
______ ____ ______
The profit for the period is attributable to equity holders of Personal Group
Holdings Plc
Earnings per share as arising Pence Pence Pence
from total and continuing
operations
Basic 4 10.2 9.8 21.0
Diluted 4 10.2 9.8 21.0
Consensed consolidated interim balance sheet at 30 June 2008
At 30 At 30 At 31
June 2008 June 2007 December 2007
Unaudited Unaudited Audited
Note £000 £000 £000
ASSETS
Non-current assets 9,433 9,247 9,433
Goodwill
Property, plant and equipment 5 5,389 6,612 5,449
Investment property 2,091 2,073 2,091
Financial assets 6,230 6,266 6,075
______ ______ ______
23,143 24,198 23,048
______ ______ ______
Current assets 3,354 3,414 3,570
Trade and other receivables
Cash and cash equivalents 7,383 9,204 7,728
______ ______ ______
10,737 12,618 11,298
______ ______ ______
Non-current assets classified as held
for sale
Property, plant and equipment 1,068 - 1,068
______ ______ ______
______ ______ ______
Total assets 34,948 36,816 35,414
______ ______ ______
EQUITY
Equity attributable to equity holders of
Personal Group Holdings Plc
Share capital 1,527 1,528 1,527
Other reserve (848) (551) (570)
Treasury shares reserve - (2) -
Retained earnings 25,855 23,094 25,752
______ ______ ______
Total equity 26,534 24,069 26,709
______ ______ ______
LIABILITIES
Non-current liabilities
Deferred tax liabilities 256 147 143
______ ______ ______
Current liabilities
Provisions 376 294 345
Trade and other payables 4,260 5,043 5,020
Current tax liabilities 1,207 1,134 1,092
Borrowings 2,315 6,129 2,105
______ ______ ______
8,158 12,600 8,562
______ ______ ______
Total liabilities 8,414 12,747 8,705
______ ______ ______
Total equity and liabilities 34,948 36,816 35,414
______ ______ ______
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2008
Equity attributable to equity holders of Personal Group Holdings Plc
Share Other Profit & Total
capital reserve loss equity
reserve
£000 £000 £000 £000
Balance as at 1 January 1,527 (570) 25,752 26,709
2008
______ ______ ______ ______
Available for sale
investments:
Transfer to income - 2 - 2
statement
Valuation changes taken - (48) - (48)
to equity
______ ______ ______ ______
Net expense recognised - (46) - (46)
directly into equity
Profit for the period - - 3,083 3,083
______ ______ ______ ______
Total recognised income - (46) 3,083 3,037
and expense for the
period
______ ______ ______ ______
Employee share based - - 22 22
compensation
Dividends - - (2,996) (2,996)
Proceeds of AESOP share - - 108 108
sales
Cost of AESOP shares sold - 114 (114) -
Cost of AESOP shares - (346) - (346)
purchased
______ ______ ______ ______
Balance as at 30 June 1,527 (848) 25,855 26,534
2008
______ ______ ______ ______
Condensed consolidated statement of changes in equity
for the year ended 31 December 2007
Equity attributable to equity holders of Personal Group Holdings Plc
Share Shares Other Treasury Profit & Total
capital to be reserve shares loss equity
issued reserve reserve
£000 £000 £000 £000 £000 £000
Balance as at 1 January 1,528 298 (685) (298) 22,957 23,800
2007
______ ______ ______ ______ ______ ______
Available for sale
investments:
Transfer to income - - (10) - - (10)
statement
Valuation changes taken to - - 5 - - 5
equity
______ ______ ______ ______ ______ ______
Net expense recognised - - (5) - - (5)
directly into equity
Profit for the year - - - - 6,358 6,358
______ ______ ______ ______ ______ ______
Total recognised income - - (5) - 6,358 6,353
and expense for the year
______ ______ ______ ______ ______ ______
Employee share based - - - - 43 43
compensation
Dividends - - - - (3,627) (3,627)
Proceeds of AESOP share - - - - 555 555
sales
Cost of AESOP shares sold - - 534 - (534) -
Cost of AESOP shares - - (415) - - (415)
purchased
Shares issued from - (298) - 298 - -
treasury
Cancellation of treasury (1) - 1 - - -
shares
______ ______ ______ ______ ______ ______
Balance as at 31 December 1,527 - (570) - 25,752 26,709
2007
______ ______ ______ ______ ______ ______
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2007
Equity attributable to equity holders of Personal Group Holdings Plc
Share Shares Other Treasury Profit & Total
capital to be reserve shares loss equity
issued reserve reserve
£000 £000 £000 £000 £000 £000
Balance as at 1 January 1,528 298 (685) (298) 22,957 23,800
2007
______ ______ ______ ______ ______ ______
Available for sale
investments:
Transfer to income - - (9) - - (9)
statement
Valuation changes taken to - - 35 - - 35
equity
______ ______ ______ ______ ______ ______
Net expense recognised - - 26 - - 26
directly into equity
Profit for the period - - - - 2,966 2,966
______ ______ ______ ______ ______ ______
Total recognised income - - 26 - 2,966 2,992
and expense for the period
______ ______ ______ ______ ______ ______
Employee share based - - - - 27 27
compensation
Dividends - - - - (2,868) (2,868)
Proceeds of AESOP share - - - - 523 523
sales
Cost of AESOP shares sold - - 509 - (509) -
Cost of AESOP shares - - (401) - - (401)
purchased
Shares issued from - (298) - 296 (2) (4)
treasury
______ ______ ______ ______ ______ ______
Balance as at 30 June 2007 1,528 - (551) (2) 23,094 24,069
______ ______ ______ ______ ______ ______
Condensed consolidated interim cashflow statement
6 months 6 months 12 months
ended 30 ended 30 ended 31
June 2008 June 2007 December 2007
Unaudited Unaudited Audited
£000 £000 £000
Operating activities
Profit after tax 3,083 2,966 6,358
Adjustments for 223 213 439
Depreciation
Profit on disposal of property, plant (3) (4) (14)
and equipment
Realised and unrealised net investment 12 (93) 25
losses/(gains)
Interest received (389) (410) (847)
Dividends received (27) (11) (18)
Interest paid 73 189 366
Share based payments 22 27 43
Taxation expense recognised in income 1,320 1,275 2,213
statement
Changes in working capital
Trade and other receivables 212 675 464
Trade and other payables (728) (868) (793)
Taxes paid (1,092) (1,471) (2,641)
_______ _______ _______
Net cash from operating 2,706 2,488 5,595
activities
_______ _______ _______
Investing activities
Additions to property, plant and (177) (221) (362)
equipment
Additions to investment property - - (18)
Proceeds from disposal of property 20 34 62
plant and equipment
Purchase of own shares (346) (401) (415)
Proceeds from disposal of own 108 523 555
shares
Purchase of financial assets (225) - (95)
Proceeds from disposal of 12 87 228
financial assets
Interest received 389 410 847
Dividends received 27 11 18
_______ _______ _______
Net cash (used)/gained in (192) 443 820
investing activities
_______ _______ _______
Financing activities
Proceeds from bank loans 346 402 415
Repayment of bank loans (136) (558) (4,595)
Interest paid (73) (189) (366)
Dividends paid (2,996) (2,868) (3,627)
______ ______ ______
Net cash used in financing (2,859) (3,213) (8,173)
activities
______ ______ ______
Net change in cash and cash (345) (282) (1,758)
equivalents
Cash and cash equivalents, beginning of 7,728 9,486 9,486
period
______ ______ ______
Cash and cash equivalents, end of 7,383 9,204 7,728
period
______ ______ ______
Notes to the condensed consolidated interim financial statements
1 General information
The principal activities of Personal Group Holdings Plc (`the company') and
subsidiaries (`the group') include transacting short-term accident and health
insurance, and providing employee benefits related business and financial
services in the UK.
The company is a public limited 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's shares trade on the Alternative Investment Market of the London
Stock Exchange.
The condensed consolidated financial statements do not include all of the
information required for full annual financial statements, and should be read
in conjunction with the consolidated financial statements of the group
as at and for the year ended 31 December 2007.
The financial information set out in this interim report does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985. The
group's statutory financial statements for the year ended 31 December 2007,
prepared under UK GAAP, 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 237 (2) or (3) of the Companies Act 1985.
These consolidated interim financial statements have been approved for issue by
the board of directors on
2 Accounting policies
These June 2008 condensed consolidated financial statements of Personal Group
Holdings Plc are for the six months ended 30 June 2008. They have been prepared
in accordance with International Accounting Standard
34 Interim Financial Reporting. These financial statements have been prepared
on the basis of the recognition and measurement requirements of those IFRS
standards and IFRIC interpretations as adopted by the EU, issued and effective
or issued and early adopted as at 31 December 2008. The principal accounting
policies have remained unchanged from the year ended 31 December 2007.
3 Segment analysis
The group operates three main trading business segments: insurance
underwriting; insurance and financial services related business; and
non-insurance related business. In addition investment income (net of finance
costs) is classified as a separate business segment. Personal Assurance Plc, a
subsidiary within the group, is
an FSA regulated general insurance company and is authorised to transact
accident and sickness insurance.
Insurance and financial services related business income includes insurance
brokerage commissions generated from insurance underwriting agencies, general
insurance and reinsurance brokerage commission and the provision of financial
services. All of this income is generated from subsidiary companies that are
also regulated by the FSA. Non-insurance related business consists of income
derived from the sale of benefit books, non-FSA regulated commission and
property rental income.
The revenue and net result generated by each of the group's business segments
are summarised as follows:
Business segments Insurance Insurance Non-insurance Net Group
investment
underwriting related related income £000
£000 £000 £000 £000
6 months to 30 June 2008
Revenue 8,053 3,850 867 392 13,162
Net result for the period 2,787 1,306 (15) 325 4,403
before tax
6 months to 30 June 2007
Revenue 7,915 3,987 811 512 13,225
Net result for the period 2,765 1,209 (56) 323 4,241
before tax
4 Earnings per share and dividends
The weighted average numbers of outstanding shares used for basic and diluted
earnings per share are as follows:
Six months to Six months to Twelve months to
30 June 2008 30 June 2007 31 December 2007
Basic 30,289,858 30,227,184 30,260,729
Diluted 30,310,421 30,261,956 30,297,146
During the first six months of 2008, Personal Group Holdings Plc paid dividends
of £3,024,000 to its equity shareholders (six months to 30 June 2007: £
2,902,000, twelve months to 31 December 2007: £3,666,000). This represents a
payment of 9.9p per share (six months to 30 June 2007: 9.5p, twelve months to
31 December 2007: 12.0p).
In the statement of changes in equity and the cash flow statement dividends are
stated net of amounts paid on treasury shares and unallocated shares held by
Personal Group Trustees Limited.
5 Additions and disposals of property, plant and equipment
For the six months period ended 30 June 2008
Freehold Motor Computer Furniture Total
land and vehicles fixtures
properties equipment & £000
£000 fittings
£000 £000
£000
Cost
At 1 January 2008 5,225 530 452 1,935 8,142
Additions - 94 14 68 176
Disposals - (37) (1) - (38)
_______ _____ _____ _______ ______
At 30 June 2008 5,225 587 465 2,003 8,280
_______ _____ _____ _______ ______
Depreciation
At 1 January 2008 657 207 330 1,499 2,693
Provided in the period 44 68 55 56 223
Eliminated on disposals - (24) (1) - (25)
_______ _____ _____ _______ ______
At 30 June 2008 701 251 384 1,555 2,891
_______ _____ _____ _______ ______
Net book amount at 30 June 4,524 336 81 448 5,389
2008
_______ _____ _____ _______ ______
Net book amount at 1 4,568 323 122 436 5,449
January 2008
_______ _____ _____ _______ ______
For the year ended 31 December 2007
Freehold land Motor Computer Furniture Total
and vehicles fixtures
properties equipment & £000
£000 fittings
£000 £000
£000
Cost
At 1 January 2007 6,365 477 406 1,915 9,163
Transfer to assets
classified as held
for sale (1,140) - - - (1,140)
Additions - 225 105 21 351
Disposals - (172) (59) (1) (232)
_______ _____ ____ _______ _______
At 31 December 2007 5,225 530 452 1,935 8,142
_______ _____ _____ _______ _______
Depreciation
At 1 January 2007 616 204 290 1,399 2,509
Eliminated on transfer to
assets
classified as held for (72) - - - (72)
sale
Provided in the year 113 127 99 100 439
Eliminated on disposals - (124) (59) - (183)
_______ _____ _____ _______ _______
At 31 December 2007 657 207 330 1,499 2,693
_______ _____ _____ _______ _______
Net book amount at 31 December 4,568 323 122 436 5,449
2007
_______ _____ _____ _______ _______
Net book amount at 1 5,749 273 116 516 6,654
January 2007
_______ _____ _____ _______ _______
For the six months period ended 30 June 2007
Freehold land Motor Computer Furniture Total
and properties vehicles fixtures
equipment & £000
£000 £000 fittings
£000
£000
Cost
At 1 January 2007 6,365 477 406 1,915 9,163
Additions - 120 77 4 201
Disposals - (94) (1) (1) (96)
_______ _____ _____ _______ _______
At 30 June 2007 6,365 503 482 1,918 9,268
_______ _____ _____ _______ _______
Depreciation
At 1 January 2007 616 204 290 1,399 2,509
Provided in the period 56 62 42 53 213
Eliminated on disposals - (64) (1) (1) (66)
_______ _____ _____ _______ _______
At 30 June 2007 672 202 331 1,451 2,656
_______ _____ _____ _______ _______
Net book amount at 30 5,693 301 151 467 6,612
June 2007
_______ _____ _____ _______ _______
Net book amount at 1 5,749 273 116 516 6,654
January 2007
_______ _____ _____ _______ _______
Financial calendar for the year ending 31 December 2008
The company announces the following dates in its financial calendar for the
year ending 31 December 2008:
* Preliminary results for the year ending 31 December - March 2009
2008
* Publication of Report and Accounts for 2008 - March 2009
* AGM - April 2009