New Business Results

RNS Number : 2257N

Hansard Global plc

28 January 2016

 

28 January 2016

Hansard Global plc

New business results for the six months ended 31 December 2015

Hansard Global plc ("Hansard" or "the Group"), the specialist long-term savings provider, issues its new business results for the six months ended 31 December 2015. All figures refer to the six months ended 31 December 2015 ("H1 2016"), except where indicated.

Summary

·     The trend of increasing sales during the past three quarters has continued in line with our expectations.  The initial success of our strategic roll-out in the Middle East has started to be replicated in other regions this quarter, where we are experiencing strong initial growth;

·     Including a £8.3m new investment into a Hansard product by the Group President on arm's-length terms, new business in Q2 of the 2016 financial year ("FY"), measured on a Present Value of New Business Premium ("PVNBP") basis, was £36.8m.  This is approximately 88% higher than Q1 FY 2016 and 136% higher than the equivalent quarter in the prior year;

·     New business for H1 2016 was £56.4m PVNBP, which is approximately 92% higher than the prior year period (including the new investment by the Group President);

·     The Group traded profitably during the period and continued to generate positive cash flows.

Gordon Marr, Group Chief Executive Officer, commented:

"It is very pleasing to see the roll-out of our strategy delivering strong results.  We have a growing, well-diversified business and continue to work hard to deliver on the opportunities that we have identified."

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 Global plc

New business results for the six months ended 31 December 2015

OVERVIEW

The Group continues to focus on the distribution of regular and single premium products in a range of jurisdictions around the world.  As planned, our new relationships with a number of IFA networks in target markets are maturing and delivering increased levels of new business.  We have established an encouraging trend of three quarters of growth as regional initiatives and new distribution relationships start to deliver results.  A further three account executives have been added to the team in the past quarter to further drive growth in Latin America and Asia.

In Present Value of New Business Premiums ("PVNBP") terms, levels of new business in Q2 FY 2016 were 136% ahead of the equivalent prior year period (Q2 FY 2015) and 88% ahead of the previous quarter (Q1 FY 2016). 

New Business Flows

New business flows for Hansard International Limited for the quarter and the half year on a range of metrics are summarised as follows:

	Three months ended				Six months ended
	31 December				31 December
	2015	2014	%		2015	2014	%
Basis	£m	£m	change		£m	£m	change
Compensation Credit	2.7 *	1.5	80.0 %		4.5 *	2.7	66.7 %
Present Value of New Business Premiums	36.8 *	15.6	135.9 %		56.4 *	29.4	91.8 %
Annualised Premium Equivalent	5.2 *	2.6	100.0 %		8.4 *	4.7	78.7 %

*  Included within these figures is a transaction which took place during Q2 FY 2016 whereby the Group President invested the Sterling equivalent of £8.3m as a lump sum top-up to a Hansard savings product on arm's-length terms.  The transaction resulted in £0.1m Compensation Credit, £8.3m PVNBP and £0.8m Annualised Premium Equivalent being included in the figures above.  Excluding this transaction, the equivalent numbers were as follows:

	Three months ended				Six months ended
	31 December				31 December
	2015	2014	%		2015	2014	%
Basis	£m	£m	change		£m	£m	change
Compensation Credit	2.6	1.5	73.3 %		4.4	2.7	63.0 %
Present Value of New Business Premiums	28.5	15.6	82.7 %		48.1	29.4	63.6 %
Annualised Premium Equivalent	4.4	2.6	69.2 %		7.6	4.7	61.7 %

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

New business flows for Hansard International for H1 2016 on the basis of PVNBP are summarised as follows:

	Three months ended				Six months ended
	31 December				31 December
	2015	2014	%		2015	2014	%
PVNBP by product type	£m	£m	change		£m	£m	change
Regular premium	17.1	9.9	72.7 %		29.9	17.6	69.9 %
Single premium	19.7 *	5.7	245.6 %		26.5 *	11.8	124.6 %
Total	36.8 *	15.6	135.9 %		56.4 *	29.4	91.8 %

	Three months ended				Six months ended
	31 December				31 December
	2015	2014	%		2015	2014	%
PVNBP by geographical area	£m	£m	change		£m	£m	change
Rest of World	16.6 *	3.9	325.6 %		22.1 *	7.2	206.9 %
Middle East and Africa	10.2	3.0	240.0 %		15.0	4.0	275.0 %
Far East	7.0	3.4	105.9 %		12.8	7.1	80.3 %
Latin America	3.0	5.3	(43.4)%		6.5	11.1	(41.4)%
Total	36.8 *	15.6	135.9 %		56.4 *	29.4	91.8 %

During the quarter we have seen strong levels of growth in all but one of our geographical regions.  The Middle East and Africa have continued to perform extremely well with £10.2m PVNBP sold.  The Rest of World region includes the related party investment noted above, but otherwise showed a 113% increase on the prior year quarter with markets such as the Caribbean and Europe (non-EU) having performed well.

Latin America was the only region where increased sales were not seen.  However, we expect to see some recovery later in the year following the recent recruitment of a new sales executive for that region.

·     New business margins

New business margins continue to recover as new business levels grow and leverage a relatively flat cost base.  The amount and mix of new business sold during Q2 FY 2016 were at a level which produced a small but positive margin. 

Assets under Administration ("AUA")

The value of AuA is based upon the assets selected by or on behalf of policyholders to meet their savings and investment needs. The total of such assets is affected by the level of new premium contributions received from new and existing policy contracts, the amount of assets withdrawn by policyholders (including those withdrawn from Hansard Europe Limited, which is in run-off), charges and the effect of investment market and currency movements.  These factors ultimately affect the level of fund-based income earned by the Group.

During H1 FY 2016, global stock markets experienced significant volatility due to concerns over global economic growth levels, particularly in China.  Declines in market values in Q1 FY 2016 were offset in Q2 by a significant strengthening of the US Dollar against Sterling which has increased the Sterling value of US Dollar denominated assets. 

	Three months ended			Six months ended
	31 December			31 December
	2015	2014		2015	2014
	£m	£m		£m	£m
Deposits to investment contracts	37.0	25.2		60.9	51.1
Withdrawals from contracts and charges	(38.8)	(51.6)		(96.2)	(104.2)
Effect of market and currency movements	34.9	16.6		(15.6)	33.2
	33.1	(9.8)		(50.9)	(19.9)
Opening balance	823.1	933.5		907.1	943.6
Assets under Administration at 31 December	856.2	923.7		856.2	923.7

Litigation and policyholder complaints

The Group continues to manage carefully the litigation exposures arising in Hansard Europe Limited. There have been no new writs received or other significant developments during the period.

Results for the half-year ENDED 31 December 2015

Trading results for the half-year are expected to be announced on 25 February 2016.

Outlook

As the implementation of the Group's strategic investment in product and people continues to mature, we expect the current run-rate of new business levels to continue into the second half of our financial year.  Any longer term stock market declines in 2016 could however erode confidence levels for new contributions and the level of income earned from existing assets under administration.

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 policy 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 policyholders 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 closed to 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 policies 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.

 

END

 

 

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