Interim Results

RNS Number : 4649A

Personal Group Holdings PLC

29 September 2015

 

Press Release

29 September 2015

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 ended 30 June 2015:

Highlights

●	Revenue increased by 9.3% to £19.0m (2014: £17.4m) with like for like revenue increasing by 4.2% to £18.1m.
●	New core business generation increased 8.4% to £5.6m (2014: £5.1m)
●	Underlying EBITDA* increased by 2.1% to £4.5m (2014: £4.4m) with like for like EBITDA increasing by 9.5% to £4.9m, largely driven by core business
●	Profit before tax decreased by 15.8% to £2.9m (2014: £3.5m) with like for like profit before tax increasing by 15.3% to £4.0m.
●	Key financials: H1  2015 H1  2014 Profit before tax £2.9m £3.5m Interest - - Depreciation £0.2m £0.2m Amortisation of intangible assets £0.3m - Share based expenses £0.3m £0.4m Acquisition costs £0.3m £0.3m Restructuring costs £0.5m - EBITDA* £4.5m £4.4m * Earnings before interest, tax, depreciation, amortisation, share based related expenses, restructuring costs and acquisition costs
●	Group balance sheet remains strong with total equity (shareholders' funds) of £26.6m (31 December 2014: £27.0m) and no debt
●	Dividends per share paid in the period up 6.6% to 10.45 pence per share (2014: 9.8 pence)
●	Basic EPS decreased by 9.6% to 7.79p (2014: 8.62p)
●	Establishment of Personal Group Mobile Limited in April 2015 through the acquisition of certain assets and liabilities of shebang Technologies Group Limited out of administration
●	Major contract wins secured including Lookers, Northgate and multiple care sector companies

Mark Scanlon, Chief Executive of Personal Group, commented: 

"Our core business continues to perform consistently well with continued growth in new sales, top line revenue and bottom line profit.  In addition our Let's Connect business, operating alongside our core business, has given us the strength of conviction to develop it further by investing in our own Mobile Virtual Network Operator ("MVNO") named Personal Group Mobile ("PG Mobile") to provide smartphones and airtime on a salary sacrifice basis to our customer base.  This offers a 32-47% reduction in cost of a phone with airtime to our customers.

The first half of 2015 has seen the release of 'hapi' our new software platform on which all of our propositions reside.  This is now live with more than ten of our customers with many more rollouts planned.  This is a major step forward for us and fundamental to the development of our company."

- ENDS -

  For more information please contact:

Personal Group Holdings Plc
Mark Scanlon / Mike Dugdale	[phone]

Cenkos Securities Plc
Max Hartley / Stephen Keys (Nomad)	[phone]
Russell Kerr (Sales)

  Media enquiries:

Abchurch Communications
Quincy Allan / Alex Shaw	[phone]
[e-mail]	www.abchurch-group.com

Notes to Editors

With over 30 years' experience of looking after its customers' employees, Personal Group Holdings Plc (AIM: PGH) is a leading provider of employee benefits and employee related insurance products, offering benefits programmes to over 2 million employees across the UK.

Personal Group's innovative approach to using technology to deliver its programmes, combined with its face-to-face method of communicating with employees, makes its offering compelling to blue chip clients across the UK as a way of attracting, retaining and motivating employees.  The Group tailors its packages to include insurance products such as hospital and convalescence plans, death benefit and income protection plans, as well as lifestyle benefits such as holiday and retail discounts, health and wellbeing benefits and a range of tax efficient benefits.

Personal Group can also supply home technology via salary sacrifice through its subsidiary Let's Connect.  Offering the latest iPads and other tablets, home computers and laptops, smart phones and smart TVs is a highly engaging benefit from which both the employer and employee can profit. In April 2015 the Group established its own Mobile Virtual Network Operator (MVNO) called Personal Group Mobile Ltd. which was achieved through the acquisition of the assets of shebang Technologies Ltd. This means that home technology, including handsets and airtime, can be provided via salary sacrifice with a reduction of c10-47% on costs to its client's employees.

Personal Group has a strong client base across a range of sectors including transport, where it works with the likes of Network Rail, Stagecoach and EYMS Group Ltd, and healthcare, where clients include Four Seasons Health Care, Priory Group and Spire Healthcare. The Group also covers logistics, with companies such as TNT Express and Bibby, and motoring with Manheim and JCT600 as clients. In addition the Group also has a strong presence in food manufacturing and service and clients include 2 Sisters Food Group and Young's Seafood.

With over 520 clients the Group has grown considerably and provides engaging and effective benefits packages across a breadth of sectors.  

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

Chairman's Statement

Summary

The Group continued to perform well in the first half of 2015, with like for like revenue up 4.2% on the equivalent period in 2014 and record new business generation.  Underlying EBITDA increased by 2.1%.  During the first half we acquired certain assets and the trade of an existing mobile virtual network operator (MVNO) and established PG Mobile, aimed at providing salary sacrifice phones and airtime to our established and new customers.  We are pleased with the early indications of the development of this business both alongside Let's Connect and as an additional offering to the employees in our core business host company clients.

Financial Performance

Total Group revenue for the six months ended 30 June 2015 increased by 9.3% to £19.0m (2014: £17.4m).  This reflects a 15.1% increase in earned premiums net of reinsurance and the revenue contribution from Let's Connect.

Annualised new business premiums written during the period from the Group's core employee benefits and insurance activities were once again a half-year record, at £5.6m, 8.4% ahead of 2014 (£5.1m).

Underlying EBITDA was £4.5m (2014: £4.4m) and whilst this represents only a 2.1% improvement on the equivalent period in 2014, the Group's performance on a like for like basis (excluding the impact of setting up our own MVNO) was an increase of 9.5%.

Group Profit before tax was £2.9m (2014: £3.5m).  This reflects £0.3m of acquisition costs and £0.5m of restructuring costs associated with the establishment of PG Mobile.

Total equity at 30 June 2015 was £26.6m (31 December 2014: £27.0m).  The structure of the balance sheet at 30 June 2015 reflects the acquisition of the MVNO assets and trade described above.

Business Review

Our core business continues to operate in a consistent manner, with a steady increase in sales and topline performance. This is reflected in the continued improvement in our profitability as we constrain our cost levels and as our claims ratio continues to stabilise.

The continuing attraction of our core products is evidenced by the particularly high proportion of sales in the first half which came from entirely new host company clients: more than 35% of total new sales were to employees of companies which were new to the Group.

Our like for like sales in Let's Connect were up 29% on the equivalent period last year.  The turnover of Let's Connect is as always very strongly weighted to the fourth quarter of the year.

The establishment of PG Mobile is a further development of our strategy to broaden the Group's offering to include additional products of appeal to our policyholders, to other employees in our host company clients, and to our Let's Connect customers.  The Group acquired in April certain assets and the trade of shebang Technologies, an existing MVNO, and we have incorporated this business into PG Mobile so as to be able to offer airtime tax efficiently, both as part of our smartphone Let's Connect package and as a standalone benefit for our wider customer base.  Airtime provisioning is increasingly becoming a form of utility rather than an occasional purchase, and as such its cost-effective provision should appeal to anyone who pays for a mobile phone.

Our new technology platform called 'hapi' is now released for use by our customers.  This is a state-of-the-art platform which is very customer-friendly: simple to navigate and use.  The system gives us a strong digital connection with the end user and for the first time enables us to offer our full product range.  Smaller as well as larger companies will find this attractive, and so it is expected to open up access to the growing SME market.  The system also offers far greater visibility and management information reporting, which is of great attraction to our host company clients.  In addition it significantly reduces our dependency on third parties.

Through the budget announcement recently we have seen Insurance Premium Tax ("IPT") increase from 6% to 9.5%, due to be implemented in November this year.  Our premium collection method through payroll deduction makes it difficult to adjust premiums retrospectively and we have decided as part of our annual price review to adjust our pricing for new business only.

Dividends

The first two dividends of 2015, each of 5.225p per share, were paid in March and June, with the third dividend of the same amount being paid on 24th September 2015.  The Directors expect that the fourth and final dividend for 2015 of the same amount will be paid in December.  This would give a total for the year of 20.9p per share (2014: 19.6p per share), an increase of 6.6%.

The Board

As announced earlier in the year Ken Rooney retired from his executive position as Chief Operating Officer in June 2015.  We are pleased that he will remain on the Group Board as a Non-executive Director.

Outlook

The Group's core business continues to perform strongly and grow steadily.

The acquisition last year of Let's Connect and the establishment this year of PG Mobile reflect the Group's intention to widen the range of its own products forming part of our employee benefits offering and to make available to our host company clients and to others products and services which are complementary to our core products.

We remain confident about the added value which this strategy will continue to generate for the benefit of our shareholders.

C J Curling

Non-Executive Chairman

29 September 2015

Consolidated income statement

		6 months ended 30 June 2015 Unaudited	6 months ended 30 June 2014 Unaudited	12 months ended 31 December 2014 Audited
	Note	£'000	£'000	£'000
Gross premiums written		13,872	11,915	24,189
Outward reinsurance premiums		(79)	(176)	(359)
Change in unearned premiums		5	242	233
Change in reinsurers' share of unearned premiums		(30)	(20)	(9)
		________	________	________
Earned premiums net of reinsurance		13,768	11,961	24,054
Other income:
Insurance related		1,352	2,137	4,501
Non-insurance related		3,795	3,082	18,202
Investment property		33	33	67
Investment income		83	195	210
		________	________	________
Revenue		19,031	17,408	47,034
		________	________	________
Claims incurred		(3,440)	(3,384)	(6,551)
Insurance operating expenses		(5,504)	(5,478)	(10,525)
Other expenses:
Insurance related		(765)	(735)	(1,599)
Non-insurance related		(5,826)	(3,923)	(18,182)
Share based payment expenses		(291)	(446)	(797)
Charitable donations		(50)	(50)	(100)
Amortisation of intangible assets		(285)	(39)	(275)
		________	________	________
Expenses		(16,161)	(14,055)	(38,029)
		________	________	________
Results of operating activities		2,870	3,353	9,005
Share of profit of equity-accounted investee net of tax		41	106	192
		________	________	________
Profit before tax		2,911	3,459	9,197
Tax	4	(556)	(868)	(1,653)
		________	________	________
Profit for the period after tax		2,355	2,591	7,544
		________	________	________

Earnings per share as arising from total and continuing operations		Pence	Pence	Pence
Basic	5	7.79	8.62	25.1
Diluted	5	7.53	8.60	24.4

All operations are considered to be continuing.

Consolidated statement of comprehensive income

		6 months ended 30 June 2015 Unaudited	6 months ended 30 June 2014 Unaudited	12 months ended 31 December 2014 Audited
		£'000	£'000	£'000
Profit for the period		2,355	2,591	7,544
Other comprehensive income
Available for sale financial assets:
Valuation changes taken to equity		31	(21)	(65)
Reclassification of gain on available for sale  financial assets on derecognition		(5)	(22)	(34)
Income tax on unrealised valuation changes taken to equity		(6)	5	14
		_______	_______	_______
Total comprehensive income for the period		2,375	2,553	7,459
		_______	_______	_______

Consolidated balance sheet at 30 June 2015

			At 30 June 2015 Unaudited	At 30 June 2014 Unaudited	At 31 December 2014 Audited
		Note	£'000	£'000	£'000
	ASSETS
	Non-current assets
	Goodwill	10,12	10,670	11,189	10,575
	Intangible assets	11,12	2,399	666	1,373
	Property, plant and equipment	6	4,988	5,063	4,850
	Investment property		1,070	1,070	1,070
	Equity-accounted investee	9	631	505	591
	Financial assets	7	10,724	13,422	11,610
			________	________	________
			30,482	31,915	30,069
			________	________	________
Current assets Cash and cash equivalents			4,330	1,835	4,433
	Trade and other receivables		8,149	7,051	16,783
	Reinsurance assets		329	393	351
	Inventories		289	288	623
			________	________	________
			13,097	9,567	22,190
			________	________	________
	Total assets		43,579	41,482	52,259
			________	________	________

Consolidated balance sheet at 30 June 2015

		At 30 June 2015 Unaudited	At 30 June 2014 Unaudited	At 31 December 2014 Audited
		£'000	£'000	£'000
EQUITY
Equity attributable to equity holders of Personal Group Holdings plc
Share capital		1,517	1,507	1,516
Capital redemption reserve		24	24	24
Amounts recognised directly into equity relating to available for sale financial assets		(4)	23	(24)
Other reserve - own shares		(476)	(627)	(548)
Profit and loss reserve		25,513	23,772	26,080
		________	________	________
Total equity		26,574	24,699	27,048
		________	________	________

LIABILITIES
Non-current liabilities
Deferred tax liabilities		219	118	255
		________	________	________
Current liabilities
Provisions		23	33	23
Trade and other payables		13,296	12,837	21,313
Insurance contract liabilities		2,918	2,996	2,784
Current tax liabilities		549	799	836
		________	________	________
		16,786	16,665	24,956
		________	________	________
		________	________	________
Total liabilities		17,005	16,783	25,211
		________	________	________
		________	________	________
Total equity and liabilities		43,579	41,482	52,259
		________	________	________

Consolidated statement of changes in equity for the six months ended 30 June 2015

	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 2015	1,516	24	(24)	(548)	26,080	27,048
	________	________	________	________	________	________
Dividends	-	-	-	-	(3,160)	(3,160)
Employee share-based compensation	-	-	-	-	291	291
Proceeds of AESOP* share sales	-	-	-	-	90	90
Cost of AESOP shares sold	-	-	-	142	(142)	-
Cost of AESOP shares purchased	-	-	-	(70)	-	(70)
Nominal value of LTIP** shares issued	1	-	-	-	(1)	-
	________	________	________	________	________	________
Transactions with owners	1	-	-	72	(2,922)	(2,849)
	________	________	________	________	________	________
Profit for the period	-	-	-	-	2,355	2,355
Other comprehensive income
Available for sale financial assets:
Valuation changes taken to equity	-	-	31	-	-	31
Transfer to income statement	-	-	(5)	-	-	(5)
Current tax on unrealised   valuation changes taken to   equity	-	-	(6)	-	-	(6)
	________	________	________	________	________	________
Total comprehensive income for the period	-	-	20	-	2,355	2,375
	________	_______	_______	_______	_______	_______
Balance as at 30 June 2015	1,517	24	(4)	(476)	25,513	26,574
	________	________	________	________	________	________

·     All Employee Share Option Plan (AESOP) ** Long Term Incentive Plan (LTIP)

Consolidated statement of changes in equity for the year ended 31 December 2014

	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 2014	1,507	24	61	(264)	23,835	25,163
	________	________	________	________	________	________
Dividends	-	-	-	-	(5,899)	(5,899)
Employee share-based compensation	-	-	-	-	797	797
Proceeds of AESOP* share sales	-	-	-	-	349	349
Cost of AESOP shares sold	-	-	-	537	(537)	-
Cost of AESOP shares purchased	-	-	-	(821)	-	(821)
Nominal value of LTIP** shares issued	9	-	-	-	(9)	-
	________	________	________	________	________	________
Transactions with owners	9	-	-	(284)	(5,299)	(5,574)
	________	________	________	________	________	________
Profit for the period	-	-	-	-	7,544	7,544
Other comprehensive income
Available for sale financial assets:
Valuation changes taken to equity	-	-	(65)	-	-	(65)
Transfer to income statement	-	-	(34)	-	-	(34)
Current tax on unrealised   valuation changes taken to   equity	-	-	14	-	-	14
	________	________	________	________	________	________
Total comprehensive income for the period	-	-	(85)	-	7,544	7,459
	________	________	________	________	________	________
Balance as at 31 December 2014	1,516	24	(24)	(548)	26,080	27,048
	________	________	________	________	________	________

          Consolidated statement of changes in equity for the six months ended 30 June 2014

	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 2014	1,507	24	61	(264)	23,835	25,163
	________	________	________	________	________	________
Dividends	-	-	-	-	(2,947)	(2,947)
Employee share-based compensation	-	-	-	-	446	446
Proceeds of AESOP* share sales	-	-	-	-	288	288
Cost of AESOP shares sold	-	-	-	441	(441)	-
Cost of AESOP shares purchased	-	-	-	(804)	-	(804)
Nominal value of LTIP** shares issued	-	-	-	-	-	-
	________	________	________	________	________	________
Transactions with owners	-	-	-	(363)	(2,654)	(3,017)
	________	________	________	________	________	________
Profit for the period	-	-	-	-	2,591	2,591
Other comprehensive income
Available for sale financial assets:
Valuation changes taken to equity	-	-	(21)	-	-	21
Transfer to income statement	-	-	(22)	-	-	(22)
Current tax on unrealised valuation changes taken to equity	-	-	5	-	-	5
	________	________	________	________	________	________
Total comprehensive income for the period	-	-	(38)	-	2,591	2,553
	________	________	________	________	________	________
Balance as at 30 June 2014	1,507	24	23	(627)	23,772	24,699
	________	________	________	________	________	________

 

     Consolidated cash flow statement

		6 months ended 30 June 2015 Unaudited	6 months ended 30 June 2014 Unaudited	12 months ended 31 December 2014 Audited
Net cash from operating activities (see opposite)		3,745	2,333	5,998
		______	______	______
Investing activities
Additions to property, plant and equipment		(326)	(415)	(412)
Proceeds from disposal of property, plant and equipment		3	52	72
Purchase of own shares by the AESOP		(70)	(804)	(821)
Proceeds from disposal of own shares by the AESOP		90	288	349
Purchase of financial assets		(75)	(136)	(246)
Proceeds from disposal of financial assets		1,002	1,730	3,655
Additions to investment property		-	(130)	(130)
Interest received		66	140	131
Dividends received		12	9	21
		______	______	______
Net cash from investing activities		702	734	2,619
		______	______	______
Acquisition and disposal activities
Payment to acquire Let's Connect		-	(6,000)	(6,000)
Payment to acquire trade and assets of shebang		(1,390)	-	-
Net cash acquired with trading		-	724	724
		______	______	______
Net cash from acquisition and disposal activities		(1,390)	(5,276)	(5,276)
		______	______	______
Financing activities
Dividends paid		(3,160)	(2,947)	(5,899)
		______	______	______
Net cash used in financing activities		(3,160)	(2,947)	(5,899)
		______	______	______
Net change in cash and cash equivalents		(103)	(5,156)	(2,558)
Cash and cash equivalents, beginning of period		4,433	6,991	6,991
		_______	_______	_______
Cash and cash equivalents, end of period		4,330	1,835	4,433

Consolidated cash flow statement

		6 months ended 30 June 2015 Unaudited	6 months ended 30 June 2014 Unaudited	12 months ended 31 December 2014 Audited
Operating activities		£'000	£'000	£'000
Profit after tax		2,355	2,591	7,544
Adjustment for:
Depreciation		190	191	385
Goodwill impairment		-	39	-
Amortisation of intangible assets		285	-	275
Profit on disposal of property, plant and equipment		-	(30)	(34)
Realised and unrealised net investment losses/(profits)		(15)	(19)	(31)
Interest received		(66)	(140)	(131)
Dividends received		(12)	(9)	(21)
Share of profit of equity-accounted investee, net of tax		(41)	(106)	(192)
Share-based payments		291	446	797
Taxation expense recognised in income statement		556	868	1,653
Changes in working capital:
Trade and other receivables		8,676	(2,842)	(12,283)
Trade and other payables		(7,978)	2,393	10,366
Inventories		388	(137)	(472)
Taxes paid		(884)	(912)	(1,858)
		______	______	______
Net cash from operating activities		3,745	2,333	5,998
		______	______	______

 

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 2014.

The financial information for the year ended 31 December 2014 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 2014 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 28 September 2015.

2          Accounting policies

These June 2015 interim consolidated financial statements of Personal Group Holdings Plc are for the six months ended 30 June 2015.  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 2014.

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 2014. 

The principal accounting policies have remained unchanged from the year ended 31 December 2014.

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, the provision of salary sacrifice technology products and property rental income.  Non-insurance related expenses include costs relating to those sales, and also acquisition costs.  Non-insurance income and expenses have increased in 2015 due to the additional sales and purchases made subsequent to the acquisition of the trade and assets of Shebang.

Notes to the consolidated financial statements

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 2015
Revenue
Earned premiums net of reinsurance Other income:	13,768	-	-	-	13,768
Insurance related	1,154	198	-	-	1,352
Non-insurance related	3,795	-	-	-	3,795
Investment property	-	-	33	-	33
Investment income	83	-	-	-	83
	________	________	________	________	________
Total revenue	18,880  _______	198 ______	33 ______	- ______	19,031 _______
Net result for period before tax	2,976	132	33	(271)	2,870
	_______	_______	_______	_______	_______
Segment assets	28,756	799	940	13,084	43,579
	_______	_______	_______	_______	_______
Segment liabilities	16,398	607	-	-	17,005
	_______	_______	_______	_______	_______
Depreciation and amortisation	190	-	-	285	475
	_______	_______	_______	_______	_______

Notes to the consolidated financial statements

	Employee benefits £'000	Financial services £'000	Unallocated £'000	Consolidation adjustments £'000	Group £'000
For the year ended 31 December 2014
Revenue
Earned premiums net of reinsurance Other income:	24,054	-	-	-	24,054
Insurance related	4,007	494	-	-	4,501
Non-insurance related	18,202	-	-	-	18,202
Investment property	-	-	67	-	67
Investment income	210	-	-	-	210
	_______	_______	_______	_______	_______
Total revenue	46,473 _______	494 _______	67 _______	- _______	47,034 _______
Net result for year before tax	9,361	347	67	(770)	9,005
	_______	_______	_______	_______	_______
Segment assets	38,694	677	940	11,948	52,259
	_______	_______	_______	_______	_______
Segment liabilities	24,829	382	-	-	25,211
	_______	_______	_______	_______	_______
Depreciation and amortisation	376	-	-	284	660
	_______	_______	_______	_______	_______

	Employee benefits £'000	Financial services £'000	Unallocated £'000	Consolidation  adjustments £'000	Group £'000
For the 6 months ended 30 June 2014
Revenue
Earned premiums net of reinsurance Other income:	11,961	-	-	-	11,961
Insurance related	1,853	284	-	-	2,137
Non-insurance related	3,082	-	-	-	3,082
Investment property	-	-	33	-	33
Investment income	195	-	-	-	195
	________	________	________	________	________
Total revenue	17,091  _______	284 _______	33 _______	- _______	17,408 _______
Net result for period before tax	3,535	216	33	(431)	3,353
	_______	_______	_______	_______	_______
Segment assets	27,795	892	940	11,855	41,482
	_______	_______	_______	_______	_______
Segment liabilities	16,173	610	-	-	16,783
	_______	_______	_______	_______	_______
Depreciation and amortisation	230	-	-	-	230
	_______	_______	_______	_______	_______

Income is derived from the UK and Guernsey (Dec 2014 all income was derived from UK)

The figures shown above for employee benefits and financial services are from the group's management accounts. Unallocated amounts relate to the group's investment property.

 

Notes to the consolidated financial statements

4          Taxation

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

The Group's consolidated effective tax rate in respect of continuing operations for the six months ended 30 June 2015 was 19.4% (six months ended 30 June 2014: 25.9%).

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 2015	EPS Pence	6 months ended 30 June 2014	EPS Pence	12 months ended 31 December 2014	EPS Pence
Basic	30,229,332	7.79	30,066,146	8.62	30,066,390	25.1
Diluted	31,280,284	7.53	30,102,976	8.60	30,901,027	24.4

During the first six months of 2015, Personal Group Holdings Plc paid dividends of £3,160,000 to its equity shareholders (six months to 30 June 2014: £2,954,000, twelve months to 31 December 2014: £5,916,000). This represents a payment of 10.45p per share (six months to 30 June 2014: 9.8p, twelve months to 31 December 2014: 19.6p).      

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 2015	6 months ended 30 June 2014	12 months ended 31 December 2014	6 months ended 30 June 2015	6 months ended 30 June 2014	12 months ended 31 December 2014
		Pence per share		£'000	£'000	£'000
Equity dividends
Ordinary shares paid in period
March	5.225	4.90	4.90	1,580	1,477	1,477
June	5.225	4.90	4.90	1,580	1,477	1,477
September	-	-	4.90	-	-	1,477
December	-	-	4.90	-	-	1,485
				______	______	______
				3,160	2,954	5,916
Less: amounts paid on own shares				-	(7)	(17)
	_____	_____	______	______	______	______
	10.45	9.80	19.60	3,160	2,947	5,899
	_____	_____	______	______	______	______

Notes to the consolidated financial statements

6          Property, plant and equipment

For the six months ended 30 June 2015

	Freehold land and properties £'000	Motor vehicles £'000	Computer equipment £'000	Furniture fixtures & fittings £'000	Leasehold improve- ments  £'000	Other £'000	Total £'000
Cost
At 1 January 2015	5,478	169	1,060	970	15	59	7,751
Acquisition	-	-	-	5	-	-	5
Additions	-	-	309	17	-	-	326
Disposals	-	-	(3)	(2)	-	-	(5)
	______	______	______	______	______	______	______
At 30 June 2015	5,478	169	1,366	990	15	59	8,077
	______	______	______	______	______	______	______
Depreciation
At 1 January 2015	1,316	17	755	778	8	27	2,901
Acquisition	-	-	-	-	-	-	-
Provided in the period	47	14	101	21	2	5	190
Eliminated on disposals	-	-	(1)	(1)	-	-	(2)
	______	______	______	______	______	______	______
At 30 June 2015	1,363	31	855	798	10	32	3,089
	______	______	______	______	______	______	______
Net book amount at 30 June 2015	4,115	138	511	192	5	27	4,988
	______	______	______	______	______	______	______
Net book amount at 31 December 2014	4,162	152	305	192	7	32	4,850
	______	______	______	______	______	______	______

For the year ended 31 December 2014

	Freehold land and properties £'000	Motor vehicles £'000	Computer equipment £'000	Furniture fixtures & fittings £'000	Leasehold improve- ments  £'000	Other £'000	Total £'000
Cost
At 1 January 2014	5,478	145	841	931	-	-	7,395
Acquisition	-	1	29	7	15	59	111
Additions	-	168	206	38	-	-	412
Disposals	-	(145)	(16)	(6)	-	-	(67)
	_____	_____	_____	_____	_____	_____	_____
At 31 December 2014	5,478	169	1,060	970	15	59	7,751
	_____	_____	_____	_____	_____	_____	_____
Depreciation
At 1 January 2014	1,222	103	536	744	-	-	2,605
Acquisition	-	1	13	4	4	19	41
Provided in the year	94	22	221	36	4	8	385
Eliminated on disposals	-	(109)	(15)	(6)	-	-	(130)
	_____	_____	_____	_____	_____	_____	_____
At 31 December 2014	1,316	17	755	778	8	27	2,901
	_____	_____	_____	_____	_____	_____	_____
Net book amount at 31 December 2014	4,162	152	305	192	7	32	4,850
	______	______	______	______	______	______	______
Net book amount at 31 December 2013	4,256	42	305	187	-	-	4,790
	______	______	______	______	______	______	______

Notes to the consolidated financial statements

For the six months ended 30 June 2014

	Freehold land and properties £'000	Motor vehicles £'000	Computer equipment £'000	Furniture fixtures & fittings £'000	Leasehold improve- ments  £'000	Other £'000	Total £'000
Cost
At 1 January 2014	5,478	145	841	931	-	-	7,395
Acquisition	-	-	15	3	10	42	70
Additions	-	92	299	24	-	-	415
Disposals	-	(119)	-	-	-	-	(119)
	______	______	______	______	______	______	______
At 30 June 2014	5,478	118	1,155	958	10	-	7,761
	______	______	______	______	______	______	______
Depreciation
At 1 January 2014	1,222	103	536	744	-	-	2,605
Acquisition	-	-	2	-	1	3	6
Provided in the period	49	7	112	17	-	-	185
Eliminated on disposals	-	(98)	-	-	-	-	(98)
	______	______	______	______	______	______	______
At 30 June 2014	1,271	12	650	761	1	3	2,698
	______	______	______	______	______	______	______
Net book amount at 30 June 2014	4,207	106	505	197	9	39	5,063
	______	______	______	______	______	______	______
Net book amount at 31 December 2013	4,256	42	305	187	-	-	4,790
	______	______	______	______	______	______	______

7         Financial assets

	At 30 June 2015 Unaudited	At 30 June 2014 Unaudited	At 31 December 2014 Audited
	£'000	£'000	£'000
Bank deposits	9,914	11,802	10,859
Loans & receivables	-	922	-
Investment Bond	100	-	100
Financial assets:
Available for sale	710	698	651
	________	________	________
	10,724	13,422	11,610
	_________	_________	_________

IFRS 13 Fair Value Measurement establishes a fair value hierarchy that categorises into three levels the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs)

·      Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

·      Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

·      Level 3: inputs for the asset or liability that are not based on observable market data (unobservable input).

The available for sale financial assets are stated at their bid market price, these are all based on level 1 inputs.

Notes to the consolidated financial statements

Loans and receivables (as at 30 June 2014), held at amortised cost, were short-term trade receivables and the carrying amount is a reasonable approximation of fair value. The loans and receivables were secured by a charge over the Milton Keynes property shown within note 9.

Bank deposits, also held at amortised cost, are due within 6 months and the carrying amount is a reasonable approximation of fair value.

Trade receivables arising out of direct insurance operations and other receivables are also held at amortised cost and the carrying amount is a reasonable approximation of fair value.

The investment bond subscribed to during 2014 is held in Criticaleye Investments plc and has a fixed three-year initial term. Interest is paid at 8% gross per annum. The bond was acquired late in 2014 and the carrying value is a reasonable approximation of fair value.

8         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 relating to the percentage increase in the market capitalisation of the company over a specified 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 management's intention to settle these awards in shares.

A participant would be entitled to a payment in respect of their award on each of the second, third, fourth and fifth anniversary of their commencement date in the plan or 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 on the second, third, fourth and fifth anniversary respectively. The number of shares awarded will be determined by dividing the amount of appropriate payment by the average of the closing bid price for the 20 business days immediately preceding the date of issue.

An amount of £271,000 has been charged to the profit and loss account for this scheme in the six months ended 30 June 2015 (six months ended 30 June 2014: £431,000) based on estimating the future share price of the company over the duration of the plan. Estimates of future share prices have been used for the remaining payments to calculate the expense for each individual under their remaining tranches, taking into account the maximum cap on the payout to all individuals in the scheme of £10,000,000.

Given that the estimate is highly sensitive to share price movement, the following scenarios have been considered:

-   If the share price were to increase at a quicker rate than assumed the charge for the period would have increased by £43,000

-   If the share price were to remain static for the remainder of the plan or if the share price were to reduce over the remainder of the plan there would have been no charge for the period.

As at 30 July 2015 the above scheme was amended to:

-   Include a maximum cap on market capitalisation of £183.7m; this will have the impact of reducing the maximum cap on the payout to individuals on the scheme to £7,987,000.

-   Grant options rather than shares at each vesting date; this change will not have any impact on the charge to the profit and loss account.

A further LTIP scheme ("LTIP2") was then put in place to take effect from 30 July 2015:

-   The current 5 Year Senior Management LTIP ("LTIP1") will mature at the end of 2016. As with LTIP1, LTIP2 is designed to reward directors and certain other senior employees in a way that aligns the interests of LTIP participants with the interests of shareholders, as well as with the Group's long-term strategic plan.

Notes to the consolidated financial statements

9         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 was 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 2015	6 months ended 30 June 2014	12 months ended 31 December 2014
		Unaudited	Unaudited	Audited
		£'000	£'000	£'000
Rent receivable		81	127	210
Profit on disposal of apartments		35	226	388
Administration expenses		(15)	(58)	(84)
		________	________	________
Operating profit		101	295	514
Interest payable		-	(25)	(30)
		________	________	________
Profit on ordinary activities before taxation		101	270	484
Tax on profit on ordinary activities		(20)	(58)	(99)
		________	________	________
Profit for the financial period retained		81	212	385
		________	________	________
Personal Group Holdings share of profit		41	106	192
		________	________	________

Balance sheet		6 months ended 30 June 2015	6 months ended 30 June 2014	12 months ended 31 December 2014
		Unaudited	Unaudited	Audited
		£'000	£'000	£'000
Current assets
Inventories		1,058	2,091	1,236
Debtors		375	(6)	98
Cash at bank and in hand		18	12	18
		________	________	________
		1,451	2,097	1,352
Creditors: amounts falling due within one year		(190)	(1,088)	(170)
		________	________	________
Net current assets		1,261	1,009	1,182
		________	________	________
Capital and reserves
Called up share capital		-	-	-
Profit and loss account		1,261	1,009	1,182
		________	________	________
Shareholders' funds		1,261	1,009	1,182
		________	________	________
Personal Group Holdings share of net assets		631	505	591
		________	________	________

Notes to the consolidated financial statements

10         Goodwill

	PGM	Let's Connect	Total
	£'000	£'000	£'000
Cost
At 1 January 2015	-	10,575	10,575
Additions in the year	95	-	95
	_________	_________	________
At 30 June 2015	95	10,575	10,670
	_________	_________	________
Amortisation and impairment
At 1 January 2015	-	-	-
Impairment charge for year	-	-	-
	_________	_________	_________
At 30 June 2015	0	0	0
	_________	_________	_________
Net book value at 30 June 2015	95	10,575	10,670
	_________	_________	_________

 

11        Intangible assets

	Customer Value	Software	Licence agreements	Customer Contracts	Total
	Let's Connect	PGM	PGM	PGM
	£'000	£'000	£'000	£'000	£'000
Cost
At 1 January 2015	1,648	-	-	-	1,648
Additions in the year	-	506	703	102	1,311
	________	________	________	________	________
At 30 June 2015	1,648	506	703	102	2,959
	________	________	________	________	________
Amortisation and impairment
At 1 January  2015	275	-	-	-	275
Amortisation charge for year	165	60	51	9	285
	_________	_________	_________	________	_________
At 30 June 2015	440	60	51	9	560
	_________	_________	_________	________	_________
Net book value at 30 June 2015	1,208	446	652	93	2,399
	_________	_________	_________	________	_________

Notes to the consolidated financial statements

12         Acquisitions of business

Acquisitions in the current period

On 1 April 2015 Personal Group Mobile Limited (PGM) was incorporated as a new subsidiary within the Group and on 17 April 2015 PGM purchased the trade and certain assets and liabilities of shebang Technology Group Limited (shebang) out of administration for a total consideration of £1.4m. £0.7m was paid to the administrator of shebang and a further £0.7m was paid to Hutchison 3G UK Limited (Three UK) in respect of novation of a Mobile Virtual Network Operator Services agreement. PGM is a Mobile Virtual Network Operator ("MVNO") aimed at providing salary sacrifice phones and airtime to its established and new customers through the Group's subsidiary Let's Connect in addition to shebang's existing distribution channels. The acquisition is highly complementary to the Group's salary sacrifice product offering and customer base, and it provides the Group with another reason to engage and rollout employee benefit programmes, which can include its core insurance products. It has also brought with it over 20 years' of experience in the mobile industry, an established relationship with Three UK and an experienced team of 40 people based in Daventry already serving its customers with over 10,000 connections.

In the period to 30 June 2015 the business contributed net loss of £0.9m including acquisition costs of £0.3m and re-organisation costs of £0.4m. 

Effect of acquisition

The acquisition had the following effect on the Group's assets and liabilities.

		*Recognised Values on Acquisition
		£'000
Net assets acquired:
Licence agreement (intangible)		703
Software (intangible)		506
Customer value (intangible)		102
Property, plant and equipment		5
Inventories		55
Trade and other receivables		20
Trade and other payables		(96)
		_________
Net identifiable assets and liabilities		1,295
		_________
Consideration paid		1,390
		_________
Goodwill on acquisition		95
		_________

*The recognised values above have been determined on a book basis with the exception of licence agreement, software and customer value which represent a provisional assessment of fair value. A complete assessment of fair values will be completed for the year end.

A minimal amount of goodwill has arisen because the consideration paid reflects management expectations of the future profitability of the business, whilst recognising that the majority of this future profitability will derive from new income streams.

The licence agreement, software and customer value are being amortised through the consolidated income statement over 3 year, 2 year and 3 year periods respectively; the combined charge for the 6 months to 30 June 2015 was £105k.

 

Notes to the consolidated financial statements

Financial calendar for the year ending 31 December 2015

The company announces the following dates in its financial calendar for the year ending 31 December 2015:

·      Preliminary results for the year ending 31 December 2015                               -           March 2016

·      Publication of Report and Accounts for 2015                                                  -           March 2016

·      AGM                                                                                                           -           April 2016

 

END

 

 

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