Interim Results

RNS Number : 1644P

Personal Group Holdings PLC

30 September 2013

 



Press Release

30 September 2013

PERSONAL GROUP HOLDINGS PLC

                                                         ("Personal Group" or "the Group")

Interim Results

Personal Group Holdings Plc (AIM: PGH), a leading provider of employee benefits, employee related insurance products and financial services in the UK, is pleased to report its results for the six months to 30 June 2013:

Highlights

●	Revenue increased by 2.1% to £13.9m (2012: £13.7m)
●	New business generation increased 21% to £4.9m (2012: £4.1m)
●	Profit before tax and before share based payment expenses and goodwill impairment decreased to £3.7m (2012: £4.9m), largely as a result of increased investment and claims costs
●	Total equity (shareholders' funds) increased to £26.9m (31 December 2012: £26.7m)
●	Dividends per share paid in the period up 4.5% to 9.3 pence per share (2012: 8.9p)
●	Contract secured with Network Rail in May 2013, one of the largest tender wins in the Group's history

Mark Scanlon, Chief Executive of Personal Group, commented: 

"Profit in the six months to 30 June 2013 has, as expected, been impacted by the Group's continuing investment programme, which is now centred on increasing sales capacity, improving our technology offering to policyholders and driving further operational efficiencies. In consequence we have again generated record levels of new business, which should flow through into profit in later periods.

"The Group's pipeline of new business remains very strong, demonstrating the continuing attraction of our products and services both to employer companies, their employees and policyholders alike." 

Enquiries:

Personal Group Holdings Plc	Tel: [phone] (on 30/09/13)
Mark Scanlon / Mike Dugdale	Tel:[phone] (thereafter)
Abchurch Communications
Joanne Shears / Harriet Rae	Tel: [phone]
Cenkos Securities Plc
Stephen Keys / Max Hartley	Tel: [phone]

Notes to editors:

Personal Group Holdings Plc (AIM: PGH) is a leading provider of employee benefits and financial services, working with blue chip corporates across the UK since the Group was established in 1984. 

The Group's integrated benefits and insurance programmes offer employers a cost effective means of attracting, retaining and motivating employees.  Personal Group's tailored employee benefits packages include insurance products such as hospital and convalescence plans, death benefit and income protection plans; lifestyle benefits such as holiday and retail discounts; flexible benefit programmes; and a range of tax efficient benefits such as childcare vouchers. 

In total Personal Group offers access to benefits to over 1.2 million employees, and clients include 3663, Benfield Motor Group, Northumbrian Water Limited, Priory Group, Regatta, Road Chef, Spire Healthcare, TNT and Vinci Construction.  Against a backdrop of the government's focus on increasing the responsibility of the individual in terms of lifestyle protection and insurance products, Personal Group enables the employer to put the structure in place for their employees to achieve this more easily. 

The Group boasts considerable financial strength, with a track record of profitable organic growth since 1986, as well as a strong pipeline of new business. For the year to 31 December 2012 the Group reported revenue of over £27 million and underlying PBT of £9.4 million.  With a strong balance sheet and a progressive dividend policy, Personal Group is focused on increasing the momentum in its sales activity and investing in the business to drive future growth. 

Personal Group is headquartered in Milton Keynes, listed on AIM in 2000 and today employs over 175 people.

For further information, go to www.personal-group.com.

Chairman's Statement

Summary

The first half of 2013 has seen a step change in the level of new business generation from our core products - up 21% on the equivalent period last year - as we begin to see the benefits of the Group's investment programme.  As expected there have been higher overheads associated with the planned investment programme and profit has also been impacted by higher claims levels experienced during the period.  At the same time the Board is pleased to report that some marked efficiencies are already evident from the changes which we are making to the operational structure of the business.

Financial Performance

Group profit before tax and share-based payment expenses and goodwill impairment for the six months ended 30 June 2013 was £3.7m (2012: £4.9m). The reduction in profit is partly attributable to higher overheads as the investment programme continues ahead of the expected resulting upswing in revenue. The reduction also reflects a higher claims ratio in the period; although the Group's claims ratio has shown a strong consistency over many years, it has, as is the case with most other insurance products, seen certain periods of higher claims levels.

Annualised new business premiums from the Group's core employee benefits and insurance activities (namely our hospital cash, convalescence, death benefit and voluntary group income protection plans) reached £4.9m in the first half of 2013, some 21% ahead of the £4.1m achieved in the first half of 2012 - which was itself a record level at the time.

Total equity at 30 June 2013 was £26.9m (31 December 2012: £26.7m).  This includes net cash balances (including bank deposits classified under IFRS as financial assets) of £16.1m (31 December 2012: £15.3m).

Business Review

The Group is starting to gain real benefit from the business investment described in our Annual Report for the year ended 31 December 2012.  The strengthening of the business development and account management team has resulted in a number of significant new business wins, including Network Rail, one of the largest tender wins in the Company's history, Young's Seafood and Translink, as well as a strong pipeline of new and existing host company launches.

The now almost universal use of iPads in the "front-end" sales process is generating some material operational efficiencies and is enabling us to have closer contact with our policyholders.  Further refinements to the process have been introduced in the first six months of 2013.  We are continuing also to implement further improvements in the quality of our policyholder engagement: these changes have contributed to a significant reduction in the number of complaints received.

Personal Group's latest internal employee survey shows improvements in a number of key areas, following our reward and progression review last year.  We have further strengthened the senior management team through the recruitment of Ashley Doody as Chief Information Officer in April 2013.

Dividends

The first three dividends of 2013, each of 4.65p per share, have been paid in April and June and on 25 September.  The Directors expect that a fourth and final dividend for 2013 of the same amount will be paid in December.  This would give a total for the year of 18.6p per share (2012: 17.8p per share), an increase of 4.5%.

The Board

As indicated in the Annual Report for 2012, Roger Green retired as a non-executive Director on 30 April 2013.  We are delighted that Mark Winlow has joined the Group Board as a non-executive Director, subject to regulatory approval.  Mark has 30 years' wide experience in the insurance industry, including as a Partner at Ernst and Young leading their insurance and investment management consulting practices, and as a senior executive and non-executive Director in a number of major insurance companies.  He is currently non-executive Chairman of Ageas Insurance Limited and of Lloyd's broker RFIB, and he is a judge of the British Insurance awards.

Outlook

In my statement in the Annual Report for 2012 I stated that 2013 was intended to be a year of further investment for significant sales growth, which is expected to lead to enhanced profits in future years. The benefit of this investment is reflected in our increasing level of new business generation and by our pipeline of business for new as well as existing host companies, which is very strong.  Nevertheless the Board anticipates that full year results are likely to be impacted by the ongoing investment programme and by the increase in claims. 

Overlaying all this, however, is the high level of continuing interest in our products shown both by our existing clients and many new and potential customers across a wide range of sectors, which demonstrates that Personal Group is an exciting business with excellent prospects.

C J Curling

Non-Executive Chairman

27 September 2013

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated income statement

		6 months ended 30 June 2013 Unaudited	6 months ended 30 June 2012 Unaudited	12 months ended 31 December 2012 Audited
			(Restated)	(Restated)
	Note	£'000	£'000	£'000
Gross premiums written		11,208	10,683	22,332
Outward reinsurance premiums		(235)	(432)	(1,097)
Change in unearned premiums		184	42	(281)
Change in reinsurers' share of unearned premiums		(276)	(22)	(30)
Earned premiums net of reinsurance		10,881	10,271	20,924
Other income:
Insurance related		1,966	2,410	4,301
Non-insurance related		855	687	1,410
Investment property		69	57	115
Investment income		173	228	418
Revenue		13,944	13,653	27,168
Claims incurred		(2,786)	(2,125)	(4,211)
Insurance operating expenses		(4,751)	(3,901)	(9,190)
Impairment of non-financial assets		-	(800)	(800)
Other expenses:
Insurance related		(950)	(1,308)	(1,968)
Non-insurance related		(1,728)	(1,409)	(2,355)
Share based payment expenses		(410)	(11)	(301)
Charitable donations		(50)	(50)	(100)
Expenses		(10,675)	(9,604)	(18,925)
Results of operating activities		3,269	4,049	8,243
Finance costs		(1)	(1)	(3)
Share of profit of equity-accounted investee net of tax		44	42	64
Profit before tax		3,312	4,090	8,304
Tax	4	(826)	(1,258)	(2,280)
Profit for the period after tax		2,486	2,832	6,024

Earnings per share as arising from total and continuing operations		Pence	Pence	Pence
Basic	5	8.32	9.5	20.2
Diluted	5	8.31	9.5	20.1
Basic (before goodwill impairment)	5	8.32	12.2	22.8

All operations are considered to be continuing.

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated statement of comprehensive income

		6 months ended 30 June 2013 Unaudited	6 months ended 30 June 2012 Unaudited	12 months ended 31 December 2012 Audited
			(Restated)	(Restated)
		£'000	£'000	£'000
Profit for the period		2,486	2,832	6,024
Other comprehensive income
Available for sale financial assets:
Valuation changes taken to equity		54	17	19
Reclassification of gain on available for sale  financial assets on derecognition		(3)	(7)	(9)
Income tax on unrealised valuation changes taken to equity		(12)	(3)	(3)
Total comprehensive income for the period		2,525	2,839	6,031

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated balance sheet at 30 June 2013

		At 30 June 2013 Unaudited	At 30 June 2012 Unaudited	At 31 December 2012 Audited
			(Restated)	(Restated)
	Note	£'000	£'000	£'000
ASSETS
Non-current assets Goodwill		2,100	2,100	2,100
Property, plant and equipment	6	5,483	5,412	5,605
Investment property		1,068	1,068	1,068
Equity-accounted investee	10	316	250	272
Financial assets	7	16,574	16,400	16,488
		25,541	25,230	25,533
Current assets Trade and other receivables		4,388	4,321	4,240
Reinsurance assets		494	615	735
Cash and cash equivalents		3,474	2,599	3,015
		8,356	7,535	7,990
Total assets		33,897	32,765	33,523

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated balance sheet at 30 June 2013

		At 30 June 2013 Unaudited	At 30 June 2012 Unaudited	At 31 December 2012 Audited
			(Restated)	(Restated)
		£'000	£'000	£'000
EQUITY
Equity attributable to equity holders of Personal Group Holdings plc
Share capital		1,503	1,503	1,503
Capital redemption reserve		24	24	24
Amounts recognised directly into equity
relating to available for sale financial assets		18	(21)	(21)
Other reserve - own shares		(616)	(637)	(619)
Profit and loss reserve		25,938	24,975	25,805
Total equity		26,867	25,844	26,692

LIABILITIES
Non-current liabilities
Deferred tax liabilities		152	204	176
Current liabilities
Provisions		63	99	63
Trade and other payables		3,118	2,678	2,593
Insurance contract liabilities		2,809	2,572	2,895
Current tax liabilities		865	1,267	1,045
Borrowings	8	23	101	59
		6,878	6,717	6,655
Total liabilities		7,030	6,921	6,831
Total equity and liabilities		33,897	32,765	33,523

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated statement of changes in equity for the six months ended 30 June 2013

	Share capital	Capital redemption reserve	Available for sale financial assets	Other reserve	Profit & loss reserve	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 1 January 2013	1,503	24	(21)	(619)	25,805	26,692
Dividends	-	-	-	-	(2,776)	(2,776)
Employee share-based compensation	-	-	-	-	410	410
Proceeds of AESOP share sales	-	-	-	-	101	101
Cost of AESOP shares sold	-	-	-	88	(88)	-
Cost of AESOP shares purchased	-	-	-	(85)	-	(85)
Transactions with owners	-	-	-	3	(2,353)	(2,350)
Profit for the period	-	-	-	-	2,486	2,486
Other comprehensive income
Available for sale financial assets:
Valuation changes taken to equity	-	-	54	-	-	54
Reclassification adjustment    on derecognition	-	-	(3)	-	-	(3)
Current tax on unrealised   valuation changes taken to   equity	-	-	(12)	-	-	(12)
Total comprehensive income for the period	-	-	39	-	2,486	2,525
Balance as at 30 June 2013	1,503	24	18	(616)	25,938	26,867

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated statement of changes in equity for the year ended 31 December 2012

	Share capital	Capital redemption reserve	Available for sale financial assets	Other reserve	Profit & loss reserve	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 1 January 2012	1,503	24	(28)	(652)	24,810	25,657
Dividends	-	-	-	-	(5,312)	(5,312)
Employee share-based compensation	-	-	-	-	301	301
Proceeds of AESOP share sales	-	-	-	-	269	269
Cost of AESOP shares sold	-	-	-	287	(287)	-
Cost of AESOP shares purchased	-	-	-	(254)	-	(254)
Transactions with owners	-	-	-	33	(5,029)	(4,996)
Profit for the period	-	-	-	-	6,024	6,024
Other comprehensive income
Available for sale financial assets:
Valuation changes taken to equity	-	-	19	-	-	19
Reclassification adjustment on   derecognition	-	-	(9)	-	-	(9)
Current tax on unrealised   valuation changes taken to   equity	-	-	(3)	-	-	(3)
Total comprehensive income for the period	-	-	7	-	6,024	6,031
Balance as at 31 December 2012	1,503	24	(21)	(619)	25,805	26,692

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated statement of changes in equity for the six months ended 30 June 2012

	Share capital	Capital redemption reserve	Available for sale financial assets	Other reserve	Profit & loss reserve	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 1 January 2012	1,503	24	(28)	(652)	24,810	25,657
Dividends	-	-	-	-	(2,656)	(2,656)
Employee share-based compensation	-	-	-	-	11	11
Proceeds of AESOP share sales	-	-	-	-	103	103
Cost of AESOP shares sold	-	-	-	125	(125)	-
Cost of AESOP shares purchased	-	-	-	(110)	-	(110)
Transactions with owners	-	-	-	15	(2,667)	(2,652)
Profit for the period	-	-	-	-	2,832	2,832
Other comprehensive income
Available for sale financial assets:
Valuation changes taken to equity	-	-	17	-	-	17
Reclassification adjustment on   derecognition	-	-	(7)	-	-	(7)
Current tax on unrealised   valuation changes taken to   equity	-	-	(3)	-	-	(3)
Total comprehensive income for the period	-	-	7	-	2,832	2,839
Balance as at 30 June 2012	1,503	24	(21)	(637)	24,975	25,844

Personal Group Holdings Plc

For the 6 months ended 30 June 2013

Consolidated cash flow statement

		6 months ended 30 June 2013 Unaudited	6 months ended 30 June 2012 Unaudited	12 months ended 31 December 2012 Audited
			(Restated)	(Restated)
		£'000	£'000	£'000
Operating activities
Profit after tax		2,486	2,832	6,024
Adjustments for:   Goodwill impairment		-	800	800
Depreciation		291	231	496
Profit on disposal of property, plant and   equipment		(10)	(3)	(9)
Realised and unrealised net investment losses/(profits)		5	56	(17)
Interest received		(124)	(129)	(390)
Dividends received		(8)	(13)	(22)
Interest paid		1	1	3
Share of profit of equity-accounted investee, net of tax		(44)	(42)	(64)
Share-based payments		410	11	301
Taxation expense recognised in income statement		826	1,258	2,280
Changes in working capital:
Trade and other receivables		93	395	231
Trade and other payables		437	(776)	(574)
Taxes paid		(1,042)	(1,227)	(2,499)
Net cash from operating activities		3,321	3,394	6,560
Investing activities
Additions to property, plant and equipment		(200)	(345)	(735)
Proceeds from disposal of property, plant and equipment		43	48	111
Purchase of own shares by the AESOP		(85)	(110)	(254)
Proceeds from disposal of own shares by the AESOP		101	103	269
Purchase of financial assets		(3,848)	(4,682)	(11,880)
Proceeds from disposal of financial assets		3,808	4,676	11,859
Interest received		124	129	390
Dividends received		8	13	22
Net cash used in from investing activities		(49)	(168)	(218)
Financing activities
Proceeds from bank loans		85	110	254
Repayment of bank loans		(121)	(123)	(309)
Interest paid		(1)	(1)	(3)
Dividends paid		(2,776)	(2,656)	(5,312)
Net cash used in financing activities		(2,813)	(2,670)	(5,370)
Net change in cash and cash equivalents		459	556	972
Cash and cash equivalents, beginning of period		3,015	2,043	2,043
Cash and cash equivalents, end of period		3,474	2,599	3,015

Notes to the consolidated 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 AIM 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 2012.

The financial information for the year ended 31 December 2012 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 2012 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 2013.

2          Accounting policies

These June 2013 interim consolidated financial statements of Personal Group Holdings Plc are for the six months ended 30 June 2013.  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 2012.

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 in respect of periods beginning on or after 1 January 2013.  The Group has adopted early the requirements of IFRS 10, Consolidated Financial Statements and IFRS 11, Joint Arrangements (mandatory for periods commencing on or after 1 January 2014). With the exception of the implementation of IFRS 10 and 11, the principal accounting policies have remained unchanged from the year ended 31 December 2012.

Application of IFRS 11 has resulted in a change in recognition of the Group's joint venture from proportionate consolidation to the equity method. Under the transitional provisions within the standard, the change has been retrospectively applied from 1 January 2012. The effect of this change on the financial information as at 1 January 2012 and 31 December 2012 is disclosed in note 10.

3          Segment analysis

The group operates two trading operating segments, namely employee benefits insurance and consultancy; and financial services offered by Berkeley Morgan Group Limited (BMG) and its subsidiary undertakings.

1)         Employee benefits insurance and consultancy

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.

This operating segment derives the majority of its revenue from the underwriting by PA of insurance policies that have been bought by employees of host companies via bespoke benefit programmes.

Insurance related income includes insurance and reinsurance brokerage commission. Insurance brokerage commission includes that derived from voluntary group income protection plan sales.

Non-insurance related income includes income derived from the sale of benefit books, consultancy services and property rental income.

2)         Financial services

The financial services operating segment consists exclusively of revenue generated by BMG and its subsidiary undertakings. BMG was acquired by PGH in January 2005.

Financial services revenue consists mainly of commission generated by financial advisers and commission generated from insurance underwriting agencies.

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

	Employee benefits £'000	Financial services £'000	Unallocated £'000	Consolidation  adjustments £'000	Group £'000
Operating segments
For the 6 months ended 30 June 2013
Revenue
Earned premiums net of reinsurance Other income:	10,881	-	-	-	10,881
Insurance related	1,647	319	-	-	1,966
Non-insurance related	855	-	-	-	855
Investment property	-	-	69	-	69
Investment income	173	-	-	-	173
Total revenue	13,556	319	69	-	13,944
Net result for period before tax	3,429	184	69	(414)	3,268
Segment assets	29,773	640	1,068	2,100	33,581
Segment liabilities	6,365	665	-	-	7,030
Depreciation and goodwill impairment	285	2	4	-	291

	Employee benefits £'000	Financial services £'000	Unallocated £'000	Consolidation adjustments £'000	Group £'000
For the year ended 31 December 2012
Revenue
Earned premiums net of reinsurance Other income:	20,924	-	-	-	20,924
Insurance related	3,216	1,085	-	-	4,301
Non-insurance related	1,410	-	-	-	1,410
Investment property	-	-	115	-	115
Investment income	418	-	-	-	418
Total revenue	25,968	1,085	115	-	27,168
Net result for year before tax	8,848	387	115	(1,110)	8,240
Segment assets	29,617	466	1,068	2,100	33,251
Segment liabilities	6,373	458	-	-	6,831
Depreciation and goodwill impairment	479	8	9	-	496

	Employee benefits £'000	Financial services £'000	Unallocated £'000	Consolidation  adjustments £'000	Group £'000
For the 6 months ended 30 June 2012
Revenue
Earned premiums net of reinsurance Other income:	10,271	-	-	-	10,271
Insurance related	1,702	708	-	-	2,410
Non-insurance related	687	-	-	-	687
Investment property	-	-	57	-	57
Investment income	228	-	-	-	228
Total revenue	12,888	708	57	-	13,653
Net result for period before tax	4,662	144	57	(815)	4,048
Segment assets	28,578	769	1,068	2,100	32,515
Segment liabilities	6,197	724	-	-	6,921
Depreciation and goodwill impairment	222	4	5	800	1,031

All income is derived from the UK.

The figures shown above for employee benefits and financial services are from the management accounts that are not prepared under IFRS. Unallocated amounts relate to the investment properties.

4          Taxation

Tax expense is recognised based on management's best estimate of the weighted-average annual income tax rate expected for the full financial year multiplied by the pre-tax income of the interim reporting period.

The Group's consolidated effective tax rate in respect of continuing operations for the six months ended 30 June 2013 was 25.3% (six months ended 30 June 2012: 31.0%). The change in effective tax rate was caused mainly by the impairment of non-financial assets in the prior period.

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 30 June 2013	6 months ended 30 June 2012	12 months ended 31 December 2012
Basic	29,864,405	29,860,011	29,865,746
Diluted	29,931,423	29,860,011	29,882,672
Basic (before goodwill impairment)	29,864,405	29,860,011	29,865,746

During the first six months of 2013, Personal Group Holdings Plc paid dividends of £2,796,000 to its equity shareholders (six months to 30 June 2012: £2,676,000, twelve months to 31 December 2012: £5,352,000). This represents a payment of 9.3p per share (six months to 30 June 2012: 8.9p, twelve months to 31 December 2012: 17.8p).      

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 as follows:

	6 months ended 30 June 2013	6 months ended 30 June 2012	12 months ended 31 December 2012	6 months ended 30 June 2013	6 months ended 30 June 2012	12 months ended 31 December 2012
		Pence per share		£'000	£'000	£'000
Equity dividends
Ordinary shares paid in period
March	-	4.45	4.45	-	1,338	1,338
April	4.65	-	-	1,398	-	-
June	4.65	4.45	4.45	1,398	1,338	1,338
September	-	-	4.45	-	-	1,338
December	-	-	4.45	-	-	1,338
				2,796	2,676	5,352
Less: amounts paid on own shares				(20)	(20)	(40)
	9.30	8.90	17.80	2,776	2,656	5,312

6          Property, plant and equipment

For the six months ended 30 June 2013

	Freehold land and properties £'000	Motor vehicles £'000	Computer equipment £'000	Furniture fixtures & fittings £'000	Total £'000
Cost
At 1 January 2013	5,478	1,088	823	1,045	8,434
Additions	-	81	119	2	202
Disposals	-	(89)	-	-	(89)
At 30 June 2013	5,478	1,080	942	1,047	8,547
Depreciation
At 1 January 2013	1,128	433	448	820	2,829
Provided in the period	47	133	89	22	291
Eliminated on disposals	-	(56)	-	-	(56)
At 30 June 2013	1,175	510	537	842	3,064
Net book amount at 30 June 2013	4,303	570	405	205	5,483
Net book amount at 31 December 2012	4,350	655	375	225	5,605

For the year ended 31 December 2012

	Freehold land and properties £'000	Motor vehicles £'000	Computer equipment £'000	Furniture fixtures & fittings £'000	Total £'000
Cost
At 1 January 2012	5,478	960	524	1,033	7,995
Additions	-	424	299	12	735
Disposals	-	(296)	-	-	(296)
At 31 December 2012	5,478	1,088	823	1,045	8,434
Depreciation
At 1 January 2012	1,034	380	342	771	2,527
Provided in the year	94	247	106	49	496
Eliminated on disposals	-	(194)	-	-	(194)
At 31 December 2012	1,128	433	448	820	2,829
Net book amount at 31 December 2012	4,350	655	375	225	5,605
Net book amount at 31 December 2011	4,444	580	182	262	5,468

For the six months ended 30 June 2012

	Freehold land and properties £'000	Motor vehicles £'000	Computer equipment £'000	Furniture fixtures & fittings £'000	Total £'000
Cost
At 1 January 2012	5,478	960	524	1,033	7,995
Additions	-	150	70	-	220
Disposals	-	(117)	-	-	(117)
At 30 June 2012	5,478	993	594	1,033	8,098
Depreciation
At 1 January 2012	1,034	380	342	771	2,527
Provided in the period	47	120	39	25	231
Eliminated on disposals	-	(72)	-	-	(72)
At 30 June 2012	1,081	428	381	796	2,686
Net book amount at 30 June 2012	4,397	565	213	237	5,412
Net book amount at 31 December 2011	4,444	580	182	262	5,468

7         Financial Assets

	At 30 June 2013 Unaudited	At 30 June 2012 Unaudited	At 31 December 2012 Audited
	£'000	£'000	£'000
Bank deposits	12,612	12,215	12,309
Loans & receivables	3,328	3,703	3,616
Financial assets:
designated at fair value through profit & loss	60	95	70
available for sale	574	387	493
	________	________	________
	16,574	16,400	16,488
	_________	_________	_________

The loans and receivables are secured by a charge over the Milton Keynes property.

Quoted financial assets designated at fair value through profit or loss and available for sale assets are stated at their bid market price and are level 1 assets. There are no level 2 or 3 assets.

Unquoted financial assets designated at fair value through profit or loss are valued using an expected future cash flow basis. At 30 June 2013, 31 December 2012 and 30 June 2012 all unquoted financial assets were valued at £nil.  

8         Borrowings

At 30 June 2013 the borrowings shown in the consolidated balance sheet are in respect of the Personal Group Trustees Limited AESOP bank loan.

9         Long Term Incentive Plan (LTIP)

During 2012 the company adopted a discretionary LTIP for the benefit of selected directors and senior employees of Personal Group. The Plan provides for the grant of awards, entitling participants to the payment of a bonus related to the percentage increase in the market capitalisation of the company over a 5 year period. The awards will be satisfied in shares or in the discretion of the remuneration committee wholly or partly in cash in accordance with the plan rules. It is the directors' intention to settle these awards in shares.

A participant will be entitled to a payment in respect of their award on each of the second, third, fourth and fifth anniversaries of their commencement date in the plan or earlier if there is an exit event such as a sale before the fifth anniversary date. Each participant has been awarded a specified percentage of the value increase in the market capitalisation. If there is no increase in market capitalisation at the award dates then no payment will be made.

Where the market capitalisation has increased the level of payment will be 10%, 30%, 60% and 100% cumulatively of the participant's specified percentage of value increase on the second, third, fourth and fifth anniversaries respectively. The number of shares awarded will be determined by dividing the amount of the appropriate payment by the average of the closing bid price for the 20 business days immediately preceding the date of issue.

An amount of £398,000 has been charged to the profit and loss account in 2013 for this scheme based on estimating the future share price of the company over the duration of the plan. A share price of £4.00 has been used at each payment date to calculate the expense for each individual under each of the four tranches of the LTIP period.

The estimate is highly sensitive to share price and a 25% increase in the share price would result in an additional charge of approximately £273,000.

10         Equity-accounted investment

During 2004 the company entered into a joint venture agreement with Abbeygate Developments Limited to construct a freehold joint office and residential property development on land adjacent to John Ormond House. A joint venture company called Abbeygate Developments (Marlborough Gate 2) Limited was established to construct the property. This company is owned equally by Personal Group Holdings Plc and Abbeygate Developments Limited.

The development is funded by way of a loan from Personal Group Holdings Plc. The profit and loss account and balance sheet for this joint venture company are as follows:

Profit and loss account		6 months ended 30 June 2013	6 months ended 30 June 2012	12 months ended 31 December 2012
		Unaudited	Unaudited	Audited
		£'000	£'000	£'000
Rent receivable		193	202	393
Administration expenses		(25)	(33)	(122)
Operating profit		168	169	271
Interest payable		(52)	(56)	(111)
Profit on ordinary activities before taxation		116	113	160
Tax on profit on ordinary activities		(28)	(29)	(32)
Profit for the financial period retained		88	84	128

Balance sheet		6 months ended 30 June 2013	6 months ended 30 June 2012	12 months ended 31 December 2012
		Unaudited	Unaudited	Audited
		£'000	£'000	£'000
Current assets
Stocks		4,242	4,245	4,243
Debtors		-	49	38
		4,242	4,294	4,281
Creditors: amounts falling due within one year		(3,610)	(3,794)	(3,737)
Net current assets		632	500	544
Capital and reserves
Called up share capital		-	-	-
Profit and loss account		632	500	544
Shareholders' funds		632	500	544

Application of IFRS 11 has resulted in a change in recognition of the Group's joint venture from proportionate consolidation to the equity method. Under the transitional provisions within the standard, the change has been retrospectively applied from 1 January 2012. The effect of this change on the financial information as at 1 January 2012 and 31 December 2012 is disclosed below.

			31 December 2012	1 January 2012
			£'000	£'000
Decrease in non-current assets			42	12
Decrease in current assets			19	25
Decrease in current liabilities			61	36
Decrease in revenue			196	182
Decrease in administration and other expenses			116	91

Financial calendar for the year ending 31 December 2013

The company announces the following dates in its financial calendar for the year ending 31 December 2013:

●  Preliminary results for the year ending 31 December 2013	-           March 2014
●  Publication of Report and Accounts for 2013	-           March 2014
●  AGM	-          April 2014

- Ends -

 

END

 

 

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