Interim Management Statement

RNS Number : 1149N

Hansard Global plc

14 May 2015

 

14 May 2015

Hansard Global plc

Interim Management Statement

Hansard Global plc ("Hansard" or "the Group"), the specialist long-term savings provider, issues its Interim Management Statement for the period from 1 July 2014 to date. All figures refer to the nine months ended 31 March 2015 ("Q3 2015"), except where indicated.

Summary

·   We have seen increased interest in the Group's products, particularly in North Asia and in the Middle East and Africa regions, following recent product launches. This interest is reflected in new business issued in Q4 2015 which we expect to continue;

·   New business in the period ended Q3 2015 is £40.8m PVNBP ("Present Value of New Business Premiums"), which is approximately 43% lower than the prior year, primarily due to the comparative period including £10.9m introduced by the Japanese distributor which ceased business in October 2013;

·  The Group has traded profitably during the period and generated strong positive cash flows which supported the increased interim dividend of 3.5p per share paid on 2 April 2015.

Gordon Marr, Group Chief Executive Officer, commented:

"We have completed the upgrade of all the Group's products and, with the benefit of new relationships with significant distribution networks, we have recently seen encouraging trends of improved new business flows. We are confident that our new products will deliver increased levels of profitable new business, and diversify our exposure across a range of distributors and countries."

For further information:

Hansard Global plc                                                                           Gordon Marr, Group Chief Executive Officer Tim Davies, Chief Financial Officer	[phone]
Bell Pottinger                                                                                    Daniel de Belder	[phone]

Hansard Globalplc

interim management statement

STRATEGY IMPLEMENTATION

We continue to invest to support our strategic plans and to better position the Group to meet the needs of contract holders throughout the world. In March 2015 we launched new offshore pension services, together with our newsingle premium Personal Portfolio products which are designed to provide better value for customers. The successful launch of these products marks the conclusion of 18 months of work to upgrade our entire product range.

Since the launch of the new Personal Portfolio products the run-rate of applications for new business has trebled with support shown from intermediaries in all our target regions. As a result, April 2015 has delivered a greater level of new business sales than recent months.

We are confident that our newly-introduced products are well-tailored to the requirements of our target clients andbelieve that our new products and an increasing pool of distribution relationships will provide a platform for sustainable diversified new business flows in the latter part of this financial year and beyond. In particular we are pleased with progress in the Middle East and Africa region.

FINANCIAL PERFORMANCE AND POSITION - NINE MONTHS TO 31 MARCH 2015

·           International Financial Reporting Standards ("IFRS")

The Group has traded profitably during the period and generated positive cash flows to fund additional expenditure on strategic initiatives, settlements of a small number of litigation cases and the increased interim dividend of 3.5p per share.As a result, the profit for Q3 2015 is marginally below the run-rate of the profit of the first half of this financial year. 

·           European Embedded Value ("EEV")

EEV at 31 March 2015 is marginally above the value at 31 December 2014. Improved investment performance during Q3 2015 has offset negative new business margins driven by low volumes.

·           Capitalisation and Solvency

The Group continues to be strongly capitalised enabling it to satisfy operational, regulatory, contract holder and intermediary expectations. At 31 March 2015 the aggregate minimum regulatory margins are covered approximately 12 times by the Group's capital resources.

·           Increased interim dividend

An increased interim dividend of 3.5p per share (2014: 3.4p) was paid on 2 April 2015.

New Business Flows

The implementation of our plans has generated increased interest in our products from both existing and new intermediaries.  We have seen this increased interest result in steady flows of new business. In particular we are pleased with progress in the Middle East and Africa region - which has generated £5.4m PVNBP in the period to Q3 2015.

New business flows for Hansard International for Q3 2015 on a range of metrics are summarised as follows.

	Three months ended				Nine months ended
	31 March				31 March
	2015	2014	%		2015	2014	%
Basis	£m	£m	change		£m	£m	change
Compensation Credit	1.1	1.9	(42.1)%		3.8	7.6	(50.0)%
Present Value of New Business Premiums	11.4	16.9	(32.5)%		40.8	72.1	(43.4)%
Annualised Premium Equivalent	1.9	2.9	(34.5)%		6.6	11.5	(42.6)%

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

New business flows for Hansard International for Q3 2015 on the basis of PVNBP are summarised as follows:

	Three months ended				Nine months ended
	31 March				31 March
	2015	2014	%		2015	2014	%
PVNBP by product type	£m	£m	change		£m	£m	change
Regular premium	7.1	12.8	(44.3)%		24.7	57.2	(56.8)%
Single premium	4.3	4.1	4.9 %		16.1	14.9	8.1 %
Total	11.4	16.9	(32.5)%		40.8	72.1	(43.4)%

	2015	2014	%		2015	2014	%
PVNBP by geographical area	£m	£m	change		£m	£m	change
Latin America	4.7	6.1	(23.0)%		15.8	22.6	(30.1)%
Far East Middle East and Africa	3.1 1.4	6.4 1.0	(51.6)% 40.0 %		10.2 5.4	32.8 1.9	(68.9)% 184.2 %
Rest of World	1.9	2.1	(9.5)%		7.9	8.2	(3.7)%
EU and EEA	0.3	1.3	(76.9)%		1.5	6.6	(77.3)%
Total	11.4	16.9	(32.5)%		40.8	72.1	(43.4)%

Regular premium new business reported above for the nine months ended 31 March2014 includes amounts totalling £10.9m PVNBP introduced by the Japanese distributor that ceased its new business activities in October 2013.

Assets under Administration ("AUA")

The value of assets under administration is underpinned by a steady flow of regular contributions from contract holders around the world. This cash flow, coupled with growth in a number of global stock markets in Q3, resulted in an increase of AuA to £0.93bn as at 31 March 2015.

	Three months ended			Nine months ended
	31 March			31 March
	2015	2014		2015	2014
	£m	£m		£m	£m
Deposits to investment contracts - regular premiums	19.5	19.1		58.8	65.7
Deposits to investment contracts - single premiums	4.3	4.2		16.1	15.3
Withdrawals from contracts and charges	(38.4)	(43.8)		(142.6)	(145.7)
Effect of market and currency movements	26.7	(4.1)		59.9	(2.1)
Increase in period	12.1	(24.6)		(7.8)	(66.8)
Opening balance	923.7	985.9		943.6	1,028.1
Assets under Administration at 31 March	935.8	961.3		935.8	961.3

The value of AuA is based upon the assets selected by or on behalf of contract holders to meet their needs from time to time. Reflecting the wide geographical spread of the Group's contract holders, the majority of premium contributions and of AuA are designated in currencies other than sterling.

Results for the year ENDing 30 june 2015

New business results for the year are scheduled to be announced on 30 July 2015. Trading results for the year are expected to be announced on 23 September 2015.

Outlook

We believe that our new products and an increasing pool of distribution relationships will provide a platform for sustainable diversified new business flows in the latter part of this financial year and beyond.

Notes to editors:

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

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

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

·   The principal geographic markets in which the Group currently services contract holders and financial advisors are the Far East, Latin America and the Middle East, in the case of Hansard International Limited, and Western Europe in the case of Hansard Europe Limited, the Group's two life assurance companies. Hansard Europe Limited ceased accepting new business with effect from 30 June 2013. 

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

·   Following the closure of Hansard Europe Limited to new business with effect from 30 June 2013, the Group continues to report new business performance of Hansard International Limited alone within this document. Reporting of Assets under Administration incorporates cash flows relating to insurance contracts issued by both Hansard International and Hansard Europe.

Forward-looking statements:

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

 

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