Interim Results
Personal Group Holdings PLC
27 September 2004
27 September 2004
Enquiries:
Personal Group Holdings Plc Tel: 0207 444 4140 (on 27/09/04)
Christopher Johnston, Chairman 01908 605000 ext 235 (thereafter)
Ken Rooney, Chief Executive
John Barber, Finance Director
Bankside Consultants
Simon Rothschild Tel: 0207 444 4153
Personal Group Holdings Plc
Interim statement for the six months to 30 June 2004
Personal Group Holdings Plc is one of the UK's leading providers of employee
benefit insurance and consultancy.
HIGHLIGHTS
2004 2003 %
£m £m
Trading income* 6.81 6.59 +3.3
Pre-tax profit 2.82 2.92 -3.4
Earnings per share 6.6p 6.6p -
First interim dividend per share ** 2.1p 2.0p +5.0
* Trading income comprises earned premiums net of claims, claims
handling and reinsurance expenses, and other income from the on-going business
representing commission and fees earned on financial products and other related
services.
** The directors have recommended a first interim dividend of 2.1p
(2003: 2.0p) per share payable on 25 October 2004 to shareholders on the
register at the close of business on 8 October 2004. Shares will be marked
ex-dividend on 6 October 2004.
Ken Rooney, Chief Executive, commented:
'Fourteen new benefit programmes have been launched during the first half of
2004 compared with nineteen for the whole of 2003. Whilst not all new programmes
offer the same revenue earning opportunities some, such as Exel Logistics with
more than 25,000 employees and Brake Bros with 7,000 employees, have been
particularly welcome, promising high volumes and repeat income. This rise is
partly due to the reorganisation of our sales team and the appointment of a
sales director for Personal Group Benefits at the beginning of the year. Under
new leadership this team is going from strength to strength.
Our decision to create an alliance with the Lighthouse Group has meant we can
give Perflex, our web integrated benefits programme, a further boost. It also
allows the Group to maintain a smaller team of our own independent financial
advisers, whilst Lighthouse Corporate Benefits are able to follow up the
financial services enquiries now being generated from employees of our client
companies throughout the UK.'
CHAIRMAN'S STATEMENT
The first half of 2004 has proved to be one of our best for both new insurance
sales and new benefit programme wins. New business acquisition costs and claims
incurred have increased by £124,000 and £223,000 respectively compared with the
corresponding period for the prior year. As a result of the above profit before
tax for the period ended 30 June 2004 decreased by £103,000 to £2,819,000 whilst
earnings per share remained at 6.6p.
In view of our continuing profitable trading, the directors have declared a
first interim dividend of 2.1p per share (2003: 2.0p) payable on 25 October 2004
to shareholders on the register at the close of business on 8 October 2004.
After provision for taxation and dividends, there is a surplus for the period of
£1,361,000 (2003: £1,384,000) which has been added to reserves. Shareholders'
funds now stand at a total of £16,515,000 (54p per share) and include net cash
balances of approximately £8,917,000 in addition to £3,000,000 of 4% 2009
Treasury Loan Stock (market value £2,869,000 on 30 June 2004).
During the period net unrealised investment losses of £32,000 (2003: gains
£9,000) have been recorded, mostly due to the effect of the rise in interest
rates on the current market value of our Treasury Loan Stock.
In the first half of the year employee benefit programmes were launched for
Brake Bros, Travelodge & Little Chef, Game Stores, Universal Music, 118 118 The
Number, De Vere Hotels, Exel Logistics and seven other employers.
Revenue related to our flexible benefits software package Perflex continues to
grow with the addition so far during 2004 of contracts with Land Securities
Trillium and Granta Housing. Our recent strategic alliance with the Lighthouse
Group offers more opportunities to bring Perflex to a wider market.
Our joint venture property development adjacent to John Ormond House commenced
in April and is on schedule for practical completion in April 2005.
On 25 February 2004 the Group announced the acquisition of ParTake Services
Limited. This company developed the Perflex software and other software systems
serving the property market. The multiple listing service operated by ParTake
is currently being piloted in Milton Keynes.
The balance sheet is strong, and the business continues to generate excellent
profits. Current trading is in line with directors' expectations.
Our continuing success is wholly due to the enthusiasm, commitment and
professionalism of the Personal team. My thanks to everyone involved.
Christopher W T Johnston, Chairman
24 September 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the 6 months ended 30 June 2004
6 months ended 6 months ended 12 months ended
30 June 2004 30 June 2003 31 December 2003
Unaudited Unaudited Audited
£000 £000 £000 £000 £000 £000
TECHNICAL ACCOUNT - GENERAL
BUSINESS
Gross premiums written 6,638 6,363 12,911
Change in the gross provision
for unearned premiums (25) (48) 14
Earned premiums, net of
reinsurance 6,613 6,315 12,925
Claims paid
Gross amount (1,445) (1,290) (2,628)
Reinsurers' share - - -
Net of reinsurance (1,445) (1,290) (2,628)
Change in the
provision for claims
Gross amount (166) (98) 4
Reinsurers' share - - -
Net of reinsurance (166) (98) 4
Claims incurred, net of
reinsurance (1,611) (1,388) (2,624)
Net operating expenses:
Other (2,875) (2,770) (5,381)
Balance on the technical
account for general business 2,127 2,157 4,920
CONSOLIDATED PROFIT AND LOSS ACCOUNT (CONTINUED)
for the 6 months ended 30 June 2004
6 months ended 6 months ended 12 months ended
30 June 2004 30 June 2003 31 December 2003
Unaudited Unaudited Audited
Note £000 £000 £000 £000 £000 £000
NON-TECHNICAL ACCOUNT
Balance on the general
business technical
account 2,127 2,157 4,920
Investment income 312 250 512
Unrealised (losses)/
gains on investments (32) 9 (45)
Investment expenses and (87)
charges (68) -
Net investment return 212 259 380
Other income 1,812 1,661 3,387
Other charges (1,298) (1,123) (2,297)
Charitable donations (34) (32) (85)
Profit on ordinary
activities before tax 2,819 2,922 6,305
Tax on profit on
ordinary activities 1 (825) (940) (1,857)
Profit for the period 1,994 1,982 4,448
Dividends 2 (633) (598) (2,985)
Profits retained 1,361 1,384 1,463
Earnings per share
Basic 3 6.6p 6.6p 14.9p
Diluted 3 6.6p 6.6p 14.7p
There are no recognised gains or losses for the period other than the profit for
the financial period.
CONSOLIDATED BALANCE SHEET AT 30 JUNE 2004
At 30 June 2004 At 30 June 2003 At 31 December 2003
Unaudited Unaudited Audited
(Restated)
Note £000 £000 £000 £000 £000 £000
Assets
Intangible assets
Goodwill 4 233 - -
Investments
Investment in joint venture
Share of gross assets 585 - -
Share of gross liabilities (585) - -
Net investment - - -
Other financial investments 4,690 4,721 7,233
Debtors
Debtors arising out of direct
insurance operations 1,073 1,138 1,282
Other debtors due within one
year 697 539 614
1,770 1,677 1,896
Other assets
Tangible assets 5,846 6,149 5,933
Cash at bank and in hand 8,917 6,817 6,242
14,763 12,966 12,175
Prepayments and accrued income
Accrued interest and rent 49 20 58
Deferred acquisition costs 34 38 34
Other prepayments and accrued
income 103 111 162
186 169 254
Total assets 21,642 19,533 21,558
CONSOLIDATED BALANCE SHEET AT 30 JUNE 2004 (CONTINUED)
At 30 June 2004 At 30 June 2003 At 31 December 2003
Unaudited Unaudited Audited
(Restated)
Note £000 £000 £000 £000 £000 £000
Liabilities
Capital and reserves
Called up share capital 1,528 1,528 1,528
Shares to be issued 4 228 - -
Other reserve (574) (447) (917)
Profit and loss account 15,333 13,814 13,928
Equity shareholders' funds 16,515 14,895 14,539
Technical provisions
Provision for unearned premiums 297 334 272
Claims outstanding 1,028 965 862
1,325 1,299 1,134
Provision for other risks and
charges 201 202 201
Creditors
Current taxation 845 880 924
Other creditors including other
taxation and social security 504 433 435
Bank loan 337 340 783
Proposed dividend 633 600 2,380
2,319 2,253 4,522
Accruals and deferred income 1,282 884 1,162
Total liabilities 21,642 19,533 21,558
CONSOLIDATED CASH FLOW STATEMENT
for the 6 months ended 30 June 2004
6 months ended 6 months ended 12 months ended
30 June 2004 30 June 2003 31 December 2003
Unaudited Unaudited Audited
£000 £000 £000 £000 £000 £000
Net cash inflow from operating
activities 3,699 3,575 7,060
Loan interest paid (17) (8) (16)
Taxation paid (904) (939) (1,813)
Capital expenditure
Purchase of fixed assets (126) (406) (599)
Sale of fixed assets 68 29 221
Purchase of own shares - (94) (578)
Sale of own shares 343 28 63
285 (443) (893)
Acquisitions and disposals
(Acquisition)/disposal (30) - 77
Equity dividends paid (2,380) (1,859) (2,466)
Financing
Addition to bank loan - 94 578
Repayment of loan (446) (61) (102)
(446) 33 476
Net cash flows 207 359 2,425
Cash flows were invested as
follows:
Increase/(decrease) in cash
holdings 2,675 359 (216)
Net portfolio investment
Ordinary shares, loans, finance
leases, treasury loan stock (2,468) - 2,641
Net investment of cash flows 207 359 2,425
PERSONAL GROUP HOLDINGS PLC
Notes
1. Taxation comprises United Kingdom corporation tax of £825,000 (30 June
2003: £918,000, 31 December 2003: £1,836,000), and deferred taxation charge of
£nil (30 June 2003: £22,000, 31 December 2003: £21,000).
2. The directors have declared a dividend of 2.1p (30 June 2003: 2.0p, 31
December 2003 10.0p) per share payable on 25 October 2004 to shareholders on the
register at the close of business on 8 October 2004. Shares will be marked
ex-dividend on 6 October 2004.
3. The calculations of basic and diluted earnings per share are based on
the following:
30 June 2004 30 June 2003 31 December 2003
Earnings - basic and diluted £1,994,000 £1,982,000 £4,448,000
Weighted average number of shares
Basic 30,029,221 29,969,819 29,925,332
Diluted 30,151,442 30,162,413 30,170,478
4. The consideration for the acquisition of ParTake Services Limited is
to be satisfied by £30,000 in cash and the issue of 122,221 ordinary shares in
Personal Group to the vendors, provided certain key employees of ParTake remain
with Personal Group Holdings for 3 years following the acquisition.
Additionally a further 138,888 shares are payable, contingent on ParTake
achieving profits before tax of £100,000 in the year to 31 December 2006. The
maximum consideration, excluding the value of future dividends on the shares, is
£517,000 based on the average mid market closing share price of 186.5p at 30
June 2004. The consideration to be satisfied in shares may be from a new issue
or from shares currently held by Personal Group Trustees Limited, or a
combination of both.
It is reasonable to assume that the key employees will remain with the Group for
three years and therefore the fair value of the acquisition has been estimated
and stated at £258,000. Goodwill is being amortised over five years.
The interim results, which have not been audited, have been prepared on the same
basis and using the same accounting policies as those used in the preparation of
the full year's accounts to 31 December 2003. The interim accounts for the six
months ended 30 June 2003 have been restated as a result of the change in
accounting policy in respect of accounting for AESOP trusts where UITF Abstract
38 was adopted at 31 December 2003. Shareholders' funds at 30 June 2003 have
been reduced by £447,000 as a result of the change in accounting policy. There
has been no effect on group profit in that period.
The interim statement, which was approved by the Board on 24 September 2004, is
not the Company's statutory accounts. The statutory accounts for each of the
two years to 31 December 2002 and 31 December 2003 received audit reports, which
were unqualified and did not contain statements under section 237 (2) or (3) of
the Companies Act 1985. The 2002 and 2003 accounts have been filed with the
Registrar of Companies.
Financial calendar for the year ending 31 December 2004
The Company announces the following dates in its financial calendar for the year
ending 31st December 2004:
• Payment of 1st interim dividend - 25 October 2004
• Preliminary results for the year ending 31st December 2004 - March 2005
• Publication of Report and Accounts for 2004 - March 2005
• Payment of 2nd interim dividend - March 2005
• AGM - April 2005
• Payment of final dividend - May 2005
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 22nd November 2024
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