29 July 2010 Hansard Global plc New business results for the year ended 30 June 2010

Transcription

1 HANSARD GLOBAL plc Harbour Court, Lord Street, Box 192, Douglas, Isle of Man IM99 1QL, British Isles Telephone: Fax: Internet: 29 July 2010 Hansard Global plc New business results for the year ended 30 June 2010 Hansard Global plc ( Hansard or the Group ), the specialist long-term savings provider, today announces its new business results for the year ended 30 June Summary New business momentum continues at industry leading margins: - New business for the year ended 30 June 2010 of 166.3m is marginally above the level of last year, as anticipated (2009: 166.2m), based on the Present Value of New Business Premiums ( PVNBP ); - Regular premium new business of 20.1m PVNBP for the three months ended 30 June 2010 is 20% above the quarter ended 31 March 2010 and 46.7% above the corresponding period in the prior year; - New business margins rose to 6.9% on the PVNBP basis for the year ended 30 June 2010 (2009: 6.1%); Assets under Administration at 30 June 2010 of 1.1 billion increased 13.2% since 30 June Full year IFRS profit is expected to be around 16.4m, with final dividend in line with market expectations; The financial position of the Group remains very strong, with no debt. Continued investment in systems and processes, including distribution infrastructure and Hansard OnLine to implement new business initiatives and improve operational effectiveness. Leonard Polonsky, Chief Executive of Hansard Global plc, commented: The performance of the Group remains encouraging despite the volatile markets and uncertain economic outlook. New business momentum has continued and we have achieved increased new business flows from Latin America and the Far East which have underpinned the level of Assets under Administration. In the absence of adverse economic developments, we are confident that the outlook for sustained growth in new business and profitability remains positive for the Group. Hansard s focus on margins, cashflow, cost control and a continued investment in distribution and systems leaves us well placed for the future. For further information Hansard Global plc +44 (0) Leonard Polonsky, Chief Executive Gordon Marr, Managing Director Vince Watkins, Chief Financial Officer Pelham Bell Pottinger +44 (0) Daniel de Belder

2 HANSARD GLOBAL plc NEW BUSINESS PERFORMANCE IN THE YEAR ENDED 30 JUNE 2010 Against the backdrop of volatile market conditions and global economic concerns affecting investor confidence, new business for the year is above the level of the previous financial year, as anticipated in the Interim Management Statement published on 14 May New business, calculated on the Present Value of New Business Premiums ( PVNBP ), is 166.3m compared with 166.2m in the previous year. While single premium business remains constrained by market volatility, new business momentum identified earlier this year has continued for a third successive quarter and we have achieved increasing regular premium new business flows. Regular premium new business flows of 20.1m PVNBP in the three months to 30 June 2010 are 20% above the level of the previous quarter in this financial year and 47% above the corresponding period in the prior year. The Group has retained its focus on profitability and positive cash flow generation and has delivered new business margins of 6.9% on the PVNBP basis. Continuing inflows from policyholders investments in their contracts have underpinned the value of Assets under Administration. New business flows for the year ended 30 June 2010 are summarised as follows (comparisons on actual currency basis). Three months ended Twelve months ended 30 June 30 June % % Basis m m change m m change Compensation Credit % % Present Value of New Business Premiums % % Annualised Premium Equivalent % (0.4)% New business flows on the PVNBP basis Total new business flows of 48.3m PVNBP in the three months to 30 June 2010 are 5.7% above the corresponding period, as shown in the tables below. The comparative figure of 45.7m includes two large cases with combined single premiums approximating 13.75m that were issued in Q4 last year. Ignoring those particular transactions, the new business for Q4 is 151% of Q4 last year, demonstrating the sensitivity of the Group s PVNBP to very large Single Premium cases. Regular premium new business of 20.1m for the three months ended 30 June 2010 is 20% above the level of the previous quarter in this financial year and 46.7% above the corresponding period in the prior year. Recovery in regular premium new business was sufficiently strong to neutralise the continuing reduced levels of single premium new business and achieve a positive overall increase in new business. Page 1 of 5

3 Three months ended Twelve months ended 30 June 30 June % % m m change m m change Regular premium % % Single premium (11.9)% (6.3)% PVNBP % % The value of new business premiums is influenced, among other factors, by the Group s expectations of future premium collections on regular premium contracts issued during the year. The Group s experience of premium reductions during the year has been incorporated into the estimate of value from that business, causing a total reduction in PVNBP for this year of 2m (2009: 7m) compared with the assumptions used in the previous year. These adjustments are reflected in the last quarter of each year. New business flows by region - PVNBP Three months ended Twelve months ended 30 June 30 June % % m m change m m change EU and EEA (18.2)% (9.9)% Latin America % % Far East (10.5)% % Rest of world % (5.9)% PVNBP % % The Group continues to generate the majority of its new business case count from Latin America and the Far East, as these are predominantly Regular Premium policies. Regular premium products accounted for 41.5% (2009: 37.6%) of the Group s PVNBP in the year. Premium flows from the EU and EEA are predominantly single premium business and the reduced new business flows shown above reflect the continuing difficult market environment that impacts on investor confidence. Despite shortfalls in single premium new business flows, new business premiums for the year totalled 166.3m PVNBP (2009: 166.2m), a slight increase on last year. This reflects a continuing trend of increases in quarterly new business levels through the financial year, as is demonstrated below. Twelve months ended 30 June % m m change Quarter ended 30 September (36.7)% Quarter ended 31 December (1.4) % Quarter ended 31 March % Quarter ended 30 June % PVNBP % Page 2 of 5

4 Hansard receives business from a well-diversified portfolio of intermediaries around the world, which results in new business being received in a range of currencies. The principal currency receipts (as a percentage of PVNBP for the year) are set out below Currency % % US Dollars Euro Sterling NEW BUSINESS MARGINS Despite market conditions, the Group has retained its focus on profitability. New business margins on the PVNBP basis for the year were 6.9%. These margins are well above the industry average, principally due to the Group's continued focus on the value of new business and tight cost control. Increased regular premium flows, which earn higher margins than single premium business, have contributed to the growth in the margin since Q1 2009/10. ASSETS UNDER ADMINISTRATION Retention of Policyholders Assets under Administration ( AUA ) remains strong. Due to the sharp rise in volatility in capital markets in Q4 and the strengthening of Sterling against the US Dollar and Euro over much the same period, AUA have declined slightly since 31 March 2010, standing at 1.1bn at 30 June 2010 compared with 1.2bn at Q3. In the same period, however, we have received policyholder premium flows of 53m, highlighting the resilience of our business through turbulent times. Despite recent falls in value, the value of AUA has increased by 13.2% over the year ended 30 June 2010, compared with an increase of 6.8% in the MSCI World Index. Unaudited Unaudited Three months ended Twelve months ended 30 June June 2010 m m Deposits to investment contracts Withdrawals from contracts (54.1) (181.2) Effect of market and currency movements (95.0) (96.1) Opening Assets under Administration 1, ,002.0 Assets under Administration at 30 June , ,134.8 Deposits to investment contracts for the year have been reduced by approximately 13.75m representing the cancellation during the contractual notice period of two single premium cases as reported in the interim results. Excluding the cancellation of those two contracts and with the impact of premium reductions experienced during the year, we have experienced largely neutral policyholder cash flows in the financial year with marginal net outflows in Q4. Page 3 of 5

5 AUA Currency Composition The investment choices of policyholders and their agents generally reflect the currency of the territories in which they are resident. However, the value of a policyholder s assets is subject to currency rate fluctuations and therefore the proportion of AUA held in any given currency can change as a result of currency movements and other factors. The principal currencies in which assets are designated at 30 June are as follows: Currency % % US Dollar Euro Sterling RESULTS FOR THE YEAR ENDED 30 JUNE 2010 Trading results for the year ended 30 June 2010 are expected to be announced on 23 September OUTLOOK While conditions remain challenging and uncertain particularly in Europe, we remain optimistic as regular premium flows continue to exceed those of the corresponding period. Distribution resources are being targeted, primarily, to source regular premium new business, particularly from Latin America and the Far East. With continuing investment in its distribution infrastructure, systems and online platform, Hansard is confident that its business model and prospects remain strong. As a result of the strengthening of Sterling against the US Dollar and the Euro during the last three months of the financial year that has caused a reversal of earlier foreign exchange gains, Hansard expects post-tax IFRS profit for the year to be around 16.4m. EEV operating profit is expected to be broadly in line with expectations. Despite short-term reductions in IFRS profit, we believe that the Group will continue to generate positive cash flows. The Board expects to be able to declare a full year dividend in line with market expectations, underpinned by the Group s strong balance sheet. Page 4 of 5

6 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 on 18 December 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 low-cost distribution model by selling policies exclusively through a network of financial services intermediaries, independent financial advisers and the retail operations of certain financial institutions (collectively Intermediaries ), who provide access to their clients in more than 170 countries. The Group s distribution model is supported by an award-winning, multi-language internet platform, and is scaleable. The principal geographic markets in which the Group currently services Intermediaries and policyholders are the Far East, the Middle East, and Latin America in the case of Hansard International Limited, and Western Europe in the case of Hansard Europe Limited, the Group s two life assurance companies. The Group s objective is to grow its business 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. 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 forwardlooking 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. Page 5 of 5