Personal : Announcement of Results for the Year Ended 31 December 2013

PERSONAL GROUP HOLDINGS PLC

("Personal Group" or "the Group")

ANNOUNCEMENT OF RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2013

Personal Group Holdings Plc (AIM: PGH), a leading provider of employee benefits, employee related insurance products and financial services in the UK, reports its results for the year ended 31 December 2013.

* Underlying PBT is defined as profit before tax, before goodwill impairment on BMG, share-based payment expenses, and reorganisation costs.

** EBITDA is defined as earnings before interest, tax, depreciation, goodwill impairment on BMG, share-based payment expenses and reorganisation costs.

The Annual General Meeting will be held on 28 April 2014 at 1:00pm at John Ormond House, 899 Silbury Boulevard, Milton Keynes, MK9 3XL.

Mark Scanlon, Chief Executive of Personal Group, commented: "2013 was the second successive year in the implementation of our strategic plan, in which an emphasis was placed on delivering our major investment programme. As planned this impacted on our profit for the year, but the business is now set fair to increase its profit levels and to deliver against its potential, as it is now doing."

Chairman's Statement

I am pleased to report on a year which has seen the delivery both of our continuing investment programme to transform our business, and an underlying financial performance in line with our expectations.

Return to Shareholders

Based on the strength of Personal Group's underlying performance and the Board's confidence in its business model, strategy and prospects, the Board has recommended an increase in the dividend payable in 2014 by 5.4% to 19.6p (2013: 18.6p) per share. This means that the level of dividend will have increased by 10.1% in the past two years.

We have no plans to change our long established policy of paying dividends quarterly, and accordingly our first quarterly dividend for 2014 of 4.9p (2013: 4.65p) per share was paid on 25 March 2014.

A Strong Platform for Growth

2013 is the second successive year in which an emphasis has been placed on delivering our major investment plan. This is to create a platform for significant organic growth and to deliver a highly attractive and competitive offering to our customers supported by outstanding customer service. We now have a senior management team and a motivated workforce capable of developing and expanding our business to become indisputably the market's employee benefits provider of choice, and we are a highly efficient operation. Our key performance indicators, not least our 17.5% increase over 2012 in new business generation, and the quality of our pipeline of new business, are evidence of the benefits flowing from this investment.

The Current Operating Environment

We continue to experience strong demand for our products, both from host companies to whose employees we offer our products, and from the employees themselves. We will continue in 2014 to invest in technology to maximise the ease of access to, and use of, our employee benefits platform, and some further expenditure will be required to complete our senior management succession transition. At the same time, however, our focus is on starting to deliver the enhanced profits of which this business is capable.

We have for some time recognised that the relationships which we enjoy with our host companies and with our policyholders provide an opportunity to widen the suite of products which we offer them. Some work was carried out in 2013 to identify specific opportunities which might complement our own product range, and this work continues in 2014. We have a strong balance sheet with sizeable cash reserves and no debt. We are pleased to announce the acquisition of Lets Connect. They are an employee benefit specialist in Salary Sacrifice providing home technology and their proposition brings significant synergies with our own.

Conclusion

Our business now has a well-received set of core products and a platform for the delivery of sustainable growth. This is based on a reliable track record of performance, a focus on the excellence of our customer experience, an efficient operation, and trusted relationships with over 400 clients and over 200,000 policyholders. It is now therefore well-placed to begin to widen its activity range and to increase its profit levels. It is customary for the Chairman to pay tribute to a company's employees in his or her annual Chairman's statement. That I do so again this year is in recognition of the fact that the continuing success of Personal Group is attributable overwhelmingly to the efforts and enthusiasm of our employees - for which, on behalf of the Board, I thank them.

Chris Curling

Non-Executive Chairman

26 March 2014

Chief Executive's Business Overview

2013 has been a transitional year for Personal Group. A number of important initiatives which began in 2012 were completed this year and now put us in a strong position from which to grow our business. These include, amongst others, our senior management team, sales performance, service quality and further technology deployments.

Revenue has increased by some 4.5% with our core Employee Benefits revenue growing organically by 6.8%. This is very encouraging and in line with our targets. Our sales performance of £9.4m of new annualised premium (2012: £8.0m) has beaten all previous records by a considerable margin. Of course the benefit of this increase will be felt in the coming years as we expense most of the acquisition costs in the year in which the costs are incurred. One-off charges for goodwill adjustments in our Berkeley Morgan business (£2.1m) together with LTIP/Share Option provisioning (£1.5m) have affected our profit before tax of £3.7m (2012: £8.3m), though these are non-cash items. Reorganisation charges of £1.0m are also particular to 2013.

Very pleasingly we have introduced a number of large clients such as Network Rail, 2 Sisters and Young's Seafood through the year and secured a number of others, such as Four Seasons and Translink which will be rolled out in the course of 2014. In addition we renewed our relationship with Stagecoach on a long-term contract with a number of other transport businesses in the pipeline.

EBITDA was £8.8m (2012: £9.9m) reflecting higher investment in our field sales organisation and claims costs which were ahead of historic levels. Our Berkeley Morgan business continues to reduce as expected with a reduction in revenue to £0.6m (2012: £1.1.m). Our claims costs climbed to £5.8m (2012: £4.2m) largely as a consequence of our increased core Hospital Cash plan business. We handled 41,223 claims in 2013 (2012: 33,659). The fact that we were able to absorb so much of this movement is testimony to the levels of efficiencies we have been able to drive out within the year.

Service level KPIs have soared. We now pay c.85% of claims within 24 hours (2012: 55%) with c.70% on the same day. During the year our complaints levels plummeted down to 3 per 10,000 policyholders. A wholesale revision of how complaints are managed has led to this much improved performance level. As was the case in 2012 the Board continues to have conviction about the medium and long-term growth prospects for the Group. To that end we continue with our progressive dividend policy and we are proposing to increase the dividend payable in 2014 by 5.4% to 19.6p (2013: 18.6p) per share. This will then equate to a 10.1% increase in aggregate over the two years, bettering the 2.0% and 2.4% in 2011 and 2012 respectively. Our first quarterly dividend for 2014 of 4.9p (2013: 4.65p) per share was paid on 25 March.

Mark Scanlon

Chief Executive

26 March 2014

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Announcement of Results for the Year Ended 31 December 2013

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