Trading Update

RNS Number : 7392T

Personal Group Holdings PLC

10 January 2017

 

Press Release                                                                                                                                    10 January 2017

Personal Group Holding PLC

(the "Company", "Personal Group", "PGH" or "Group")

Trading Update

Personal Group PLC, a leading provider of employee benefits and employee related insurance products in the UK, is providing the following trading update post the financial year ended 31 December 2016 ("FY 16'').

The underlying performance of the business has remained strong, with FY 16 EBITDA marginally ahead of expectations despite a lower than expected top line out turn. This performance reflects the continued strength of the Company's core insurance business, which during the period saw its fifth consecutive year of record sales, demonstrating the continued attractiveness of its products to employers and employees. 

As previously highlighted, HMRC undertook a review of salary sacrifice during 2016, the results of which were announced towards the end of the year. This caused some uncertainty, which meant a proportion of employers delayed contract decisions at a crucial time of year for the Lets Connect business. Whilst Lets Connect represents a small percentage of the Group's overall profit, by its nature, it represents a higher proportion of Group revenue. As a result of this period of uncertainty, the Company expects a one-off adverse impact to 2017 sales and profits guidance, but 2017 to be a profit growth year, and the Company remains confident for the outlook in the longer term.

PGH welcomes the clarity from the Autumn Statement as it now allows the Company to progress on a sound footing. The continued attractiveness of the Lets Connect product to employers and employees is reflected in the signing of a significant contract with the Royal Mail Group in October 2016. Furthermore, as highlighted by a survey of over 4,000 end users, none of the key attractions of the Lets Connect service were impacted by the outcome of the review, including: convenience, absence of credit checks, no upfront costs, affordability and trusted provision from their employer.

Through the development of its technology platform, Hapi, the Company has opened up new opportunities in the SME market increasing the Company's available market in the private sector by 15.7 million employees to 26.2 million. The Company is now well positioned to service over 85% of the UK working population. In particular, the partnership contract signed with Sage in November 2016 offers a significant first introduction to this market. Sage have established a specific team within their business to sell the Company's tailored SME offering into their very considerable customer base.  It represents a significant opportunity for the Group, which PGH looks forward to seeing take shape over the course of 2017 and beyond.

Mark Scanlon, Chief Executive of Personal Group, commented: "It is encouraging to see the underlying core business continuing to perform well in the face of some challenges in 2016. The attractiveness of the Lets Connect offer remains strong, and while the uncertainty caused by the HMRC consultation into salary sacrifice has been frustrating in the short run, and will impact 2017 sales and profit guidance. We look forward to growing this business in the future.

"With the signing of the Sage agreement, 2016 also saw us make significant progress in developing our available markets. We have more than doubled our market opportunity to over 26 million private sector employees. This gives us a strong platform from which to develop the business further in 2017 and beyond."

-ENDS-

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

For more information please contact:

Personal Group Holdings Plc
Mark Scanlon / Mike Dugdale	[phone]
Philip Dennis (Investor Relations)	[phone]
Cenkos Securities Plc
Max Hartley / Stephen Keys (Nomad)	[phone]
Russell Kerr (Sales)
Hudson Sandler
Nick Lyon / Sophie Lister / Lucy Wollam	[phone]

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. 

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, please see www.personalgroup.com

 

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