Trading update for quarter ended 30 September 2020

RNS Number : 2894E

Hansard Global plc

05 November 2020

 

5 November 2020

Hansard Global plc

Trading update for the quarter ended 30 September 2020

Hansard Global plc ("Hansard" or "the Group"), the specialist long-term savings provider, issues its trading update for the first quarter of its financial year ended 30 June 2021 (Q1 2021), being the period from 1 July 2020 to 30 September 2020.

Summary

· New business for the quarter ended 30 September 2020 was £34.2m in PVNBP ("Present Value  of New Business Premiums") terms, 4.5% lower than Q1 of the prior financial year;

· Business remains resilient and well diversified in the face of the continued challenges of Covid-19 ;

· Assets under administration were £1.1 billion, up 1.8% from 30 June 2020;

· Launch of our Japanese proposition with our first distribution partner targeted for Spring 2021.

Gordon Marr, Group Chief Executive Officer, commented:

"The first quarter of our 2021 financial year has been in-line with our general experience to-date of the Covid-19 environment.  Sales activity remains challenging, but we continue to deploy and utilise our technology and customer service strengths in ways to assist our brokers and clients wherever possible.  It was particularly pleasing to receive outside recognition for this by winning recent industry awards for both our technology and customer service in the International Investment magazine 2020 Awards.

While we are confident our new business will continue to be resilient in the face of Covid-19 challenges, we expect it to continue to lag behind the levels achieved last year.  We continue to invest for the future through the on-going development of our Japanese proposition and the upgrade of our systems environment. The launch of our Japanese proposition with our first distribution partner is targeted for Spring 2021."

For further information:

Hansard Global plc  [phone]

Gordon Marr, Group Chief Executive Officer

Tim Davies, Chief Financial Officer

Email: [e-mail]

Camarco   [phone]

Ben Woodford, Rebecca Noonan

Hansard Global plc

NEW BUSINESS RESULTS FOR THE quarter ENDED 30 SEPTEMBER 2020

OVERVIEW

The Group continues to focus on the distribution of regular and single premium savings and investment products in a range of jurisdictions around the world.

In Present Value of New Business Premiums ("PVNBP") terms, levels of new business in Q1 2021 were 4.5% lower than Q1 2020, reflecting the challenges presented by Covid-19 across each of the regions in which we operate.   

New Business Flows

New business flows for Q1 2021 on our key internal metrics were as follows:  

					Quarter ended
					30 September
					2020	2019	%
Basis					£m	£m	change
Present Value of New Business Premiums					34.2	35.8	(4.5%)
Annualised Premium Equivalent					5.0	5.5	(9.1%)

· Present Value of New Business Premiums ("PVNBP")

New business flows for Q1 2021 on the basis of PVNBP are analysed in the following two tables as follows:

					Quarter ended
					30 September
					2020	2019	%
PVNBP by product type					£m	£m	change
Regular premium					23.1	22.6	2.2%
Single premium					11.1	13.2	(15.9%)
Total					34.2	35.8	(4.5%)

					Quarter ended
					30 September
					2020	2019	%
PVNBP by geographical area					£m	£m	change
Middle East and Africa					13.9	15.3	(9.2%)
Rest of World					10.5	9.6	9.4%
Latin America					7.4	8.7	(14.9%)
Far East					2.4	2.2	9.1%
Total					34.2	35.8	(4.5%)

Our current focus in terms of business mix continues to be directed towards higher margin regular premium savings while selectively pursuing single premiums where the margin is acceptable.  This resulted in our regular premiums rising 2.2% for Q1 2021 compared to Q1 2020, while single premiums fell 15.9%.

In our largest region, Middle East and Africa, new business was down 9.2% as Covid-19 restrictions reduced sales activity and brokers had to direct resources into putting in place new operating models to account for regulatory changes in the UAE which came into force in October 2020.

As a result of those regulatory changes, Hansard's strategic alliance partner in the UAE has elected to stop writing new savings business (which they reinsure to Hansard) while they assess the resultant impact of the new regulations on the market. They will continue to encourage increments to existing policyholders. Hansard has put in place alternative distribution structures in order to continue to source new business in the region.

The Rest of World region was up 9.4% primarily due to the successful development of a Key Account brokerage and the result of focused work with other brokers in the region.

Having grown rapidly last year, new business in Latin America was down 14.9% as the region was hit particularly hard by Covid-19. Underlying broker relationships in this region are very strong and we expect improvements in new business levels as and when the Covid-19 environment improves.

We saw an increase in new business in the Far East region of 9.1% as our continuing work to develop additional new business via our licence in Labuan, Malaysia starts to show some early promise. As outlined in previous reports, our main strategic focus in the Far East is to develop and bring our new Japanese proposition to market and we are targeting our launch for Spring 2021.

ASSETS UNDER ADMINISTRATION ("AuA")

The composition and value of AuA is based upon the assets selected by or on behalf of contract holders to meet their savings and investment needs.  Reflecting the wide geographical spread of the Group's customer base, the majority of premium contributions and of AuA are designated in currencies other than sterling. Over 60% of Group AuA are denominated in US dollars.

The total of such assets is affected by the level of new premium contributions received from new and existing policy contracts, the amount of assets withdrawn by contract holders, charges and the effect of investment market and currency movements. These factors ultimately affect the level of fund-based income earned by the Group.  Net withdrawals are typically experienced in Hansard Europe dac ("Hansard Europe"), which closed to new business in 2013.  

During Q1 2021 AuA increased by £19.1m (1.8%) to £1.1 billion, reflecting positive global stock markets offset by gains in sterling against the US dollar.  The following analysis shows the components of the movement in AuA during the quarter:

				Quarter ended
				30 September
				2020	2019
				£m	£m
Deposits to investment contracts - regular premiums				22.5	21.3
Deposits to investment contracts - single premiums				11.1	13.1
Withdrawals from contracts and charges				(38.3)	(38.8)
Effect of market and currency movements				23.8	17.1
Increase in period				19.1	12.7
Opening balance				1,080.5	1,079.7
Assets under Administration at 30 September				1,099.6	1,092.4

The movement in AuA is split as follows between Hansard International (incorporating business reinsured from Hansard Worldwide) and Hansard Europe:

				Quarter ended
				30 September
				2020	2019
				£m	£m
Hansard International				21.7	15.2
Hansard Europe				(2.6)	(2.5)
Increase in period				19.1	12.7

AWARDS

We were delighted to win industry awards during the period in the International Investment magazine 2020 Awards for "Excellence in Client Service" and "Excellence in Fintech".  These are two areas in which Hansard strives to differentiate itself and we believe are more important than ever during the challenges of the Covid-19 environment.

Results for the HALF-year ENDing 31 DECEMBER 2020

New business results for the half year ending 31 December 2020 are expected to be announced on 28 January 2021.  Trading results for the half year are expected to be announced on 4 March 2021.

Outlook

Our expectation is that the external global environment will continue to be challenging throughout the course of our financial year and that further regional lockdowns and travel restrictions can be expected over the winter months.  While we are confident our new business will continue to be resilient in the face of these challenges, we expect it to continue to lag behind the levels achieved last year. 

We continue to invest for the future through the on-going development of our Japanese proposition and the upgrade of our systems environment. The launch of our Japanese proposition with our first distribution partner is targeted for Spring 2021.
 

Notes to editors:

· Hansard Global plc is the holding company of the Hansard Group of companies. The Company was listed on the London Stock Exchange in December 2006. The Group is a specialist long-term savings provider, based in the Isle of Man.

· The Group offers a range of flexible and tax-efficient investment products within a life assurance contract wrapper, designed to appeal to affluent, international investors.

· The Group utilises a controlled cost distribution model via a network of independent financial advisors, and the retail operations of certain financial institutions who provide access to their clients in more than 170 countries. The Group's distribution model is supported by Hansard OnLine, a multi-language internet platform, and is scalable.

· The principal geographic markets in which the Group currently services contract holders and financial advisors are the Middle East & Africa, the Far East and Latin America.  These markets are served by Hansard International Limited and Hansard Worldwide Limited.

· Hansard Europe dac previously operated in Western Europe but closed to new business with effect from 30 June 2013.  

· The Group's objective is to grow by attracting new business and positioning itself to adapt rapidly to market trends and conditions. The scalability and flexibility of the Group's operations allow it to enter or develop new geographic markets and exploit growth opportunities within existing markets often without the need for significant further investment.

Forward-looking statements:

This announcement may contain certain forward-looking statements with respect to certain of Hansard Global plc's plans and its current goals and expectations relating to future financial condition, performance and results. By their nature, forward-looking statements involve risk and uncertainties because they relate to future events and circumstances which are beyond Hansard Global plc's control. As a result, Hansard Global plc's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in Hansard Global plc's forward-looking statements. Hansard Global plc does not undertake to update forward-looking statements contained in this announcement or any other forward-looking statement it may make. No statement in this announcement is intended to be a profit forecast or be relied upon as a guide for future performance.

This announcement contains inside information which is disclosed in accordance with the Market Abuse Regime.

Legal Entity Identifier: 213800ZJ9F2EA3Q24K05

 

END

 

 

TSTUPGBGGUPUGQC