Hansard Global : Results for the year ended 30 June 2017

Results for the year ended 30 June 2017

28 Sep 2017

Hansard Global plc ('Hansard' or 'the Group'), the specialist long-term savings provider, issues its results for the year ended 30 June 2017 ('FY 2017').

Summary

subject to approval at the AGM

Gordon Marr, Group Chief Executive Officer, commented:

'Our annual results again demonstrate the continuing trend of strong, diversified levels of new business growth across all the regions in which we operate. We are confident that we can continue to leverage opportunities for growth while maintaining an efficient cost base and that this will ultimately produce attractive returns.'

NEW BUSINESS

As previously announced, our new business levels of £148.3m are up 24% on FY 2016 on a Present Value of New Business Premiums ('PVNBP') basis. We continue to make good progress in line with our strategy and achieved strong growth across all our regions. We are pleased with the geographic diversification of our new business, insulating us from concentration risk.

STRATEGY IMPLEMENTATION

As we continued to achieve growth with our existing distribution, we were pleased to announce in January 2017 a strategic alliance with a local insurer in the United Arab Emirates. We have seen encouraging levels of interest in this product suite and expect sales to continue to increase month on month during FY 2018. We also continue to review and pursue opportunities for additional licences and partnerships in a small number of targeted locations.

TRADING RESULTS

IFRS profit after tax for the year was £7.7m (FY 2016: £8.3m). Excluding one-off items, underlying IFRS profit was £8.8m compared with £9.2m in FY 2016.

The adjustment to underlying profit is due to a £1.1m provision taken against doubtful broker balances during the year (£0.7m of which was incurred in the results for the first six months of the year). Brexit-driven foreign exchange gains last year of £1m were not repeated this year, although a weaker sterling has assisted generally in the increase in Group fee income to £52.6m from £51.3m in FY 2016. Increased sales volumes in Hansard International have more than offset a reduction of £1m in fee income from our closed book of business in Hansard Europe.

Administrative expenses exclusive of exceptional items were flat at £21.7m despite the substantially increased new business levels, reflecting the highly scalable nature of our model. This includes an increase in litigation defence costs of £0.3m compared to FY 2016.

The Group European Embedded Value ('EEV') has remained level at £196m after taking account of the payment of dividends to shareholders during the year of £12.2m. An EEV operating loss of £8.2m was incurred (FY 2016: loss of £1.1m) as a positive New Business Contribution of £1.3m (FY 2016: £0.2m) was offset by a number of negative experience variances and assumption changes. These were primarily related to persistency and to allow for a temporary period of lower policy count. Positive investment return variances resulted in an overall EEV profit of £11.7m for the year (FY 2016: £13.1m). The New Business Margin for 2017 was 0.9% (FY 2016: 0.2%). Margins improved due to increased volumes, offset somewhat by a changing product mix.

DIVIDENDS

The Board has proposed a final dividend of 5.3p (2016: 5.3p) per share which, if approved by the shareholders at the Annual General Meeting on 8 November 2017, represents a total dividend of 8.9p (2016: 8.9p) per share in respect of the financial year. Such dividend will be paid on 16 November 2017 to shareholders on the register on 6 October 2017. The associated ex-dividend date is 5 October 2017.

POLICYHOLDER COMPLAINTS AND LITIGATION

The Group continues to manage carefully its litigation exposures relating to the legacy operations of Hansard Europe. Outstanding writs total €16.3m (£14.3m), up €0.6m from the half-year. The Group continues to believe it has strong defences against the claims being made. We successfully defended net claims of approximately £0.3m during the year which affirms confidence in our legal arguments. Initial judgements have mostly been appealed and to be prudent we continue to report the exposure for these cases. The claims are recorded as contingent liabilities in the annual report and accounts.

CURRENT TRADING

We are continuing to deliver further new business growth in Q1 FY 2018 compared to Q1 FY 2017 with all regions contributing well and with product mix as expected.

INTERIM MANAGEMENT STATEMENT

The first Interim Management Statement in respect of the year ending 30 June 2018 is expected to be published on 9 November 2017.

For further information

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 scalable.
• The principal geographic markets in which the Group currently services contract holders and financial advisors are the Middle East, the Far East and Latin America, in the case of Hansard International Limited, and Western Europe in the case of Hansard Europe Designated Activity Company, the Group's two life assurance companies. Hansard Europe Designated Activity Company 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 scalability 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 Designated Activity Company to new business with effect from 30 June 2013, the Group continues to report new business performance within this document on Hansard International Limited alone. Reporting of Assets under Administration incorporates cash flows relating to insurance contracts issued by both Hansard International Limited and Hansard Europe Designated Activity Company.

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.

This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation No 596/2014.

View the full press release in PDF format (1.2MB - opens in a new window)