REG - Hansard Global plc - Interim Result
06/03/2025 07:00
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RNS Number : 5250Z Hansard Global plc 06 March 2025
6 March 2025
Hansard Global plc
Results for the six months ended 31 December 2024
Hansard Global plc ("Hansard" or "the Group"), the specialist long-term
savings provider, issues its results for the six months ended 31 December
2024. All figures refer to the six months ended 31 December 2024 ("H1 2025")
and all comparisons are with the six months ended 31 December 2023 ("H1
2024"), except where indicated.
SUMMARY OF RESULTS
H1 2025 H1 2024
New business sales (PVNBP(1)) £49.1m £36.2m
New business sales (APE(2)) £7.3m £5.5m
IFRS profit before tax £0.5m £4.1m
IFRS fees and commissions £23.7m £23.9m
IFRS administrative and other expenses £18.4m £14.7m
IFRS basic earnings per share 0.3p 2.9p
Interim dividend - to be paid on 24 April 2025 1.8p 1.8p
At 31 December 30 June
2024 2024
Assets under Administration £1.2b £1.2b
Value of In-Force £108.3m £110.8m
(1 ) Present Value of New Business Premiums
(2 ) Annual Premium Equivalent
Thomas Morfett, Group Chief Executive Officer, commented:
"The Hansard Group has begun to deliver growth in new business flows after
several years of laying the groundwork for the future through its Japanese
license and new IT system.
We are pleased to now be able to launch new, competitive, and innovative
products quickly. Our plan is to make the evolution of our proposition a
continuous feature of our business model moving forward.
There are early signs that our recently launched products and fund range are
appealing to clients and advisors.
Nevertheless, as we navigate continuing regulatory changes and a challenging
financial landscape, we anticipate that it will take time for the growth in
new business to translate into improvements in income and profitability.
I am confident that we have the right people and culture in place to deliver
long-term, sustainable success for the business and all its stakeholders."
FINANCIAL HIGHLIGHTS
· New business sales grew by 36% year-on-year to £49.1m in PVNBP terms,
whilst IFRS profit before tax decreased by 88% to £0.5m in H1 2025.
· The 36% sales growth comprised 18% half-year-on-half-year in the six
months to 31 December 2024 and the previously reported 15% growth
half-year-on-half-year in the six months to 30 June 2024.
· Sales growth was driven by the successful launch of a new single
premium product earlier in the calendar year, which delivered a 123% increase
in single premium sales.
· Regular premium sales experienced a 22% decline, highlighting the
challenges of an aging regular premium product. In response, the Group
introduced a new, competitive regular premium offering in December.
· IFRS profit before tax decreased due to currency movements, strategic
investment, new IT system depreciation costs, and litigation costs.
· Profits have also been impacted by declining sales in recent years. The
Group's investment in strategic initiatives is now generating sales momentum
but this will take time to translate into higher profits given the long-term
nature of our products.
· Fees and commissions remained stable at £23.7m in H1 2025.
· Investment and other income decreased by 22% to £2.4m in H1 2025 due
to adverse currency movements and lower interest rate returns.
· Expenses increased by 25% to £18.4m in H1 2025, primarily due to the
costs of robustly defending historic litigation claims against the Group.
Total writs reduced marginally to £20.0m, with a reducing volume of new writs
received in the period.
· Expenses also increased due to our continuing investment in strategic
initiatives to improve future performance, and depreciation of our new IT
system.
· Assets under administration remained steady at £1.2 billion at 31
December 2024.
· The value of the in-force book fell by 2% to £108.3m between 30 June
2024 and 31 December 2024.
· The Board has declared an interim dividend of 1.8p per share,
consistent with previous years.
STRATEGIC & OPERATIONAL HIGHLIGHTS
· Our new IT system has enabled the Group to refresh its entire product
range and launch a new fund range quickly. We aim to roll out further
proposition improvements on a continuous and frequent basis.
· The Group continues to develop a distribution opportunity in Japan
following the registration of two new products in that market. Although the
speed of delivery to market is slower than anticipated, constructive progress
is being made.
· The combination of future sales growth and utilisation of our new IT
system is expected to help realise economies of scale in due course.
NEW BUSINESS
New business flows for the half-year are summarised as follows:
H1 2025 H1 2024 %
Basis £m £m Change
Present Value of New Business Premiums 49.1 36.2 35.6%
Annualised Premium Equivalent 7.3 5.5 32.7%
New business flows based on PVNBP are broken down as follows:
H1 H1 2024 %
2025
PVNBP by product type £m £m change
Regular premium 17.2 21.9 (21.5%)
Single premium 31.9 14.3 123.1%
Total 49.1 36.2 35.6%
H1 H1 2024 %
2025
PVNBP by geographical area £m £m Change
Middle East & Africa 18.7 16.2 15.4%
Latin America 17.8 10.6 67.9%
Rest of World 10.0 6.5 53.8%
Far East 2.6 2.9 (10.3%)
Total 49.1 36.2 35.6%
Assets under Administration ("AUA")
The composition and value of AuA is based upon the assets selected by or on
behalf of contract holders to meet their savings and investment needs.
Reflecting the wide geographical spread of the Group's customer base, most
premium contributions and AuA are designated in currencies other than
sterling. Over 60% of Group AuA are denominated in US dollars.
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 contract holders, charges and the effect of investment market and
currency movements. These factors ultimately affect the level of fund-based
income earned by the Group. Net withdrawals are typically experienced in
Hansard Europe dac ("Hansard Europe") as it closed to new business in 2013.
The following analysis shows the components of the movement in AuA:
H1 H1 2024
2025
£m £m
Assets under Administration at 30 June 1,150.9 1,101.5
Regular premiums 33.6 38.8
Single premiums 31.3 13.8
Withdrawals and charges (90.5) (87.6)
Market and currency movements 27.7 39.5
Change in period 2.1 4.5
Assets under Administration at 31 December 1,153.0 1,106.0
AuA is split as follows between Hansard International (incorporating business
reinsured from Hansard Worldwide) and Hansard Europe:
H1 H1
2025 2024
£m £m
Hansard International 1,097.5 1,044.5
Hansard Europe 55.5 61.5
Assets under Administration at 31 December 1,153.0 1,106.0
Outlook
Looking ahead, there are early indications that our new product range will
continue to drive sales and foster long-term growth for the business.
However, it will take time for improved sales to fully translate into
increased profits and we anticipate profit pressures over the next two years
as we continue to invest in strategic initiatives, defend historic litigation
claims, depreciate our IT system and meet continuing regulatory changes.
The improved sales momentum from our new products, investment in Japan, and
utilisation of our new technology platform are expected to deliver profit
growth thereafter.
NOTICE OF TRADING UPDATE
A trading update in respect of our financial year ending 30 June 2025 is
expected to be published on 25 September 2025.
For further information:
Hansard Global
plc
+44 (0) 1624 688 000
Thomas Morfett, Group Chief Executive Officer
Ollie Byrne, Chief Financial Officer
Email: investor-relations@hansard.com
Camarco
LLP
+44 (0) 7990 653 341
Ben Woodford, Aoife Mclarnon
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 via 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 &
Africa, the Far East and Latin America. These markets are served by Hansard
International Limited and Hansard Worldwide Limited.
· Hansard Europe dac previously operated in Europe but 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.
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 Regime.
Legal Entity Identifier: 213800ZJ9F2EA3Q24K05
Hansard Global plc
Interim Report and Accounts for the period ended 31 December 2024
CHAIRMAN'S STATEMENT
I am pleased to present Hansard Global plc's ("Hansard" or "Group") financial
results for the first six months of our 2025 financial year ("H1 2025").
Financial objectives
Hansard's financial objectives are measured primarily in terms of its income
generation, expense management, solvency management, and generation of cash to
pay dividends. In the short term the Group is balancing its net profit result
with dividend expectations, while maintaining its strategic solvency target.
In the medium term it is seeking to reduce its cost base and increase new
business sales by offering a new product range, whilst, in the longer term, it
is aiming to increase its scale organically and leverage its relatively fixed
cost base to deliver a geared increase in profitability.
Financial performance
IFRS profit before tax decreased by 88% to £0.5m in H1 2025 due to currency
movements, strategic investment, new system costs, and litigation costs.
New business grew by 36% to £49.1m in H1 2025 in PVNBP terms from £36.2m in
H1 2024, driven by the successful launch of a new single premium product
earlier in the calendar year. The Group launched a new, competitive regular
premium offering in December.
It will take time for improved sales to fully translate into increased profits
and we anticipate profit pressures over the next two years as we continue to
invest in strategic initiatives, defend historic litigation claims, depreciate
our new IT system and meet continuing regulatory changes.
The Group's new IT system has enabled the Group to refresh its entire product
range and launch a new fund range quickly. We aim to roll out further
proposition improvements on a continuous and frequent basis. The new system
provides the Group with a solid base from which to leverage its relatively
fixed cost base.
During the year, the Group has continued to develop its distribution
opportunity in Japan following the registration of two new products for that
market. Although the speed of delivery to market is slower than anticipated,
constructive progress is being made.
The Group remains sufficiently capitalised to meet its regulatory
requirements.
Looking ahead, there are early indications that our new product range will
continue to drive sales and foster long-term growth for the business.
Dividend declaration
The Board has declared an interim dividend of 1.8p per share, consistent with
previous years. This will be paid on 24 April 2025 with an ex-dividend date of
13 March 2025.
Board changes
Jose Ribeiro, Independent Non-executive Director, stepped down from the Board
on 31 December 2024. On behalf of the Board, I extend our great gratitude to
Jose for his valuable contribution.
We are pleased to announce that Lynzi Harrison joined the Board as an
Independent Non-executive Director on 11 December 2024. With over 25 years of
industry experience, Lynzi will serve on the Audit and Risk, Remuneration, and
Nomination Committees. We are delighted to welcome Lynzi to the Board.
Additionally, Noel Harwerth, OBE, succeeded Jose as Chair of the Remuneration
Committee and Senior Independent Director on 1 January 2025.
Philip Kay
Chair
5 March 2025
INTERIM MANAGEMENT REPORT
REPORT OF THE GROUP CHIEF EXECUTIVE OFFICER
Thomas morfett
The Hansard Group has begun to deliver growth in new business flows after
several years of laying the groundwork for the future by developing its
Japanese license and new IT system.
We are pleased to now be able to launch new, competitive, and innovative
products quickly. Our plan is to make the evolution of our proposition a
continuous feature of our business model moving forward.
There are early signs that our recently launched products and fund range are
appealing to clients and advisors.
Nevertheless, as we navigate continuing regulatory changes and a challenging
financial landscape, we anticipate that it will take time for the growth in
new business to translate into improvements in income and profitability.
I am confident that we have the right people and culture in place to deliver
long-term, sustainable success for the business and our stakeholders.
Strategy
The Group provides regular and single premium savings products to expatriate
and local clients around the world seeking access to a range of international
investments from a safe-haven jurisdiction.
We continue to pursue our strategy of growing our business organically through
Independent Financial Advisor ("IFA") client relationships and the pursuit of
targeted opportunities to improve our scale.
Our strategic focus for the second half of this financial year is to:
· Launch our two new locally licenced investment products in Japan.
· Leverage and extend our new product and funds propositions
globally; and
· Further embed our new IT system in order to roll out proposition
improvements on a continuous basis.
New business
Overall new business grew by 36% to £49.1m in H1 2025 in PVNBP terms
("Present Value of New Business Premiums") compared to £36.2m in H1 2024.
Growth of 33% was achieved in APE terms ("Annual Premium Equivalent").
New business growth was driven by the successful launch of a new single
premium product earlier in the calendar year, which delivered a 123% increase
in single premium sales.
Regular premium sales experienced a 22% decline, highlighting the challenges
of an aging regular premium product. In response, the Group introduced a new,
competitive regular premium offering in December.
Financial results
IFRS profit before tax decreased by 88% to £0.5m in H1 2025 compared to H1
2024, due to adverse currency movements, legal costs of defending historic
litigation claims, and continued investment in strategic initiatives. It will
take time for improved sales to translate into higher profits given the
long-term nature of our products.
Fees and commissions remained stable at £23.7m in H1 2025.
Investment and other income decreased by 22% to £2.4m in H1 2025 due to
adverse currency movements.
Expenses increased by 25% from £14.7m in H1 2024 to £18.4m in H1 2025 due to
the legal costs of defending historic litigation claims, continuing investment
in strategic initiatives to improve future performance, and depreciation of
the new IT system.
A summary of the results for H1 2025 are as follows:
H1 2025 H1 2024
IFRS profit before tax £0.5m £4.1m
IFRS basic earnings per share 0.3p 3.0p
Interim dividend - to be paid on 24 April 2025 1.8p 1.8p
Assets under administration increased marginally to £1.2 billion as at 31
December 2024.
The value of the in-force book remained steady at £108.3m as at 31 December
2024.
As at 31 December 2024 30 June 2024
Assets under Administration £1,153.0m £1,150.9m
Value of In-Force (regulatory basis) £108.3m £110.8m
Details of the results for the period are contained in the Business and
Financial Review.
Capitalisation and solvency
The Group remains sufficiently capitalised to meet the requirements of
regulators, contract holders, intermediaries, and other stakeholders. On a
risk-based capital basis, total Group Free Assets in excess of the Solvency
Capital Requirements of the Group were £34.3m (June 2024: £39.4m), a
solvency coverage of 143% (June 2024: 149%).
The Group's shareholders' equity is held in a wide range of deposit
institutions and highly rated money market liquidity funds.
Our people
Our people continue to be crucial to the success of the Group and demonstrate
a continued commitment, and resilience in managing both our on-going
day-to-day operations and our key strategic projects.
We maintain a commitment to the highest levels of service and quality in
relation to servicing contract holders and intermediaries, and we continue to
receive external recognition by our peers. We recently won two awards at the
2024 Investment International awards - Excellence in Fintech, and Excellence
in Client Service - Asia.
Regulatory environment
The pace, scale, and complexity of regulatory change continues to evolve, and
the Group devotes significant resources to meeting these developments.
Hansard Europe dac ("Hansard Europe")
Hansard Europe was closed to new business in 2013, and the Group's objective
is to run the business off in an efficient and well managed manner. It is well
capitalised with net assets of £12.1m as at 31 December 2024 (30 June 2024:
£12.1m).
We continue to robustly defend historic litigation arising out of
circumstances where policyholders consider that the performance of an asset
linked to a particular contract is not satisfactory. As outlined more fully in
section 11 of the Business and Financial Review, total writs were £20.0m as
at 31 December 2024 (30 June 2024: £20.2m).
Thomas Morfett
Chief Executive Officer
5 March 2025
BUSINESS AND FINANCIAL REVIEW
1. BUSINESS MODEL
Hansard is a specialist long-term savings provider that has been providing
innovative financial solutions for international clients since 1987. We focus
on helping our customers with savings and investment products in secure life
assurance wrappers to meet their long-term savings and investment objectives.
We administer assets in excess of £1 billion for just under 40,000 client
accounts around the world.
We believe that the following areas are fundamental for the continued success
of the Group:
· Proposition enhancement, product improvement and diversification
of our distribution channels to enable generation of significant flows of new
business from identified target markets.
· Leveraging our new IT system to drive business efficiency.
· Proactively managing our cash flows through the cycle to fund the
appropriate balance of investment in new business and dividends.
· Managing and mitigating our exposure to business risks.
· Positioning ourselves to incorporate increasing levels of
regulation into our business model.
The Company's head office is in Douglas, Isle of Man, and its principal
subsidiaries operate from the Isle of Man, The Bahamas and the Republic of
Ireland.
Hansard International is authorised by the Isle of Man Financial Services
Authority and has a branch in Malaysia, authorised by the Labuan Financial
Services Authority, to support business flows from Asian growth economies. It
also has a branch in Japan to support its Japanese proposition, which is
authorised by the Japanese Financial Services Agency. Through its relationship
with a local insurer in the UAE, Hansard International reinsures business
written in the UAE
Hansard Worldwide writes international and expatriate business around the
world and is underwritten by Hansard International Limited. Hansard Worldwide
is authorised by the Insurance Commission of The Bahamas.
Hansard Europe is authorised by the Central Bank of Ireland and ceased
accepting new business with effect from 30 June 2013.
Our products are designed to appeal to affluent international investors,
institutions, and wealth-management groups. They are distributed exclusively
through independent financial advisers (IFAs) and the retail operations of
financial institutions.
Our network of Regional Sales Managers provides local language-based support
services to independent financial advisors in key territories around the
world, supported by our multi-language online platform, Hansard OnLine.
2. VISION AND STRATEGY
Our vision for the Hansard Group is:
"To share success with our clients by providing simple, understandable and
innovative financial solutions".
To deliver this vision, client outcomes will be the central focus within our
business and consequently we will seek to evolve all aspects of our products,
processes and distribution in order to constantly improve.
Our talented people are the foundation of our business. We have created an
empowering culture, which values innovation, quality, integrity and respect.
Our strategy to improve, grow and future-proof our business will be delivered
through three key areas of strategic focus:
i. Improve our business: We will continue to improve
customer outcomes by introducing new and innovative products and services,
focusing on the quality of our IFAs with whom we work with and continuing to
drive up the engagement of our people within our business.
ii. Grow our business: In recent years we established a
new life company in The Bahamas, and we have recently signed a distribution
agreement with Guardian to access the Japanese domestic market. We will
continue to seek out opportunities for additional distribution channels in
other targeted jurisdictions in the future.
iii. Future-proof our business: We actively consider new and
innovative technologies, propositions, and business models. It remains
critical to support the online and digital needs of our clients alongside
improving organisational efficiency and scalability.
3. HANSARD ONLINE
Hansard is a regular recipient of numerous awards that recognise our
reputation for innovation, via the provision of market-leading online
platforms that are used daily by its IFAs ('Hansard OnLine') and their clients
('Online Accounts') around the globe. Hansard OnLine and Online Accounts
enable us to build on an award-winning, online proposition, and is central to
the development and quick deployment of new, future products.
Online Accounts
Thousands of Hansard clients access their own personal, secure online account
every year. Online accounts are mobile friendly and have the capability to
provide these clients with a wealth of policy information, 24/7. In addition
to other functionality and benefits, clients can:
· Track the performance of their policy online, with policy
valuations and contribution details at the touch of a button.
· Access their online account with our new-look mobile and
tablet friendly platform, enabling access on the go, wherever they are in the
world.
· Access their online account 24/7, safe in the knowledge that
their details are secure and protected.
· Access a wealth of fund performance information, facilitating
better informed investment decisions in the future; and
· Stay informed in a language that they understand, with Online
Accounts being available in over 13 different languages.
Cyber security
Hansard has continued to invest in its cyber security infrastructure with the
implementation of a Security Operations Centre, operating at an ISO27001
(Information Technology Security Standard) standard, to provide further
enhanced surveillance of our systems and external threats.
4. New business
PROPOSITION
The Group's proposition is to develop and enhance relationships with contract
holders and intermediaries through the use of our people, products and
technology in a way that meets shared objectives.
The results of activities in each region in H1 2025 are reported in the table
below.
New business performance for the six months ended 31 December 2024
New business for H1 2025 was £49.1m on a PVNBP basis, up 36% from £36.2m in
H1 2024 and continuing the upward trend from the second half of 2024.
New business levels for H1 2025 are summarised as follows:
Year
Six months ended ended
31 December 30 June
2024 2023 2024
£m £m £m
Present Value of New Business Premiums 49.1 36.2 77.8
Annualised Premium Equivalent 7.3 5.5 10.4
The following tables show the breakdown of new business calculated on the
basis of PVNBP:
Year ended
Six months ended
31 December 30 June
2024 2023 2024
By type of contract £m £m £m
Regular premium 17.2 21.9 44.2
Single premium 31.9 14.3 33.6
49.1 36.2 77.8
Year ended
Six months ended
31 December 30 June
2024 2023 2024
By geographical area £m £m £m
Middle East and Africa 18.7 16.2 32.4
Latin America 17.8 10.6 24.3
Rest of World 10.0 6.5 16.4
Far East 2.6 2.9 4.7
Total 49.1 36.2 77.8
Our new single premium portfolio bond launched last financial year continues
to be a successful offering for our clients and advisers, helping to drive the
increase in new business on a PVNBP basis. We have refreshed our single and
regular premium propositions, and we expect these to contribute to growth as
we move forwards.
We continue to work with key IFAs to leverage existing and new opportunities.
We are exploring new relationships to further expand our network of
distributors.
Our sales team remains well positioned to drive IFA and product initiatives to
increase new business in future, including the development and launch of new
products for key target markets, updates and improvements to existing products
and continuation of system developments to support our service and overall
proposition.
Premium currencies remained relatively consistent year on year, with the
predominant currency being US Dollars.
5. IFRS RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
The Group administers, and earns fees from, a portfolio of unit-linked
investment contracts distributed to contract holders around the world.
The nature of the Group's products means that new business flows have a
limited immediate impact on current earnings reported under IFRS, as initial
fees and acquisition costs from the contracts sold are mostly deferred and
amortised over the life of the contract. The benefit of sales to fee income
levels are felt in future financial periods, noting also that our newer
products have a longer earning period than our older products.
The Group also continues to invest strategically for the future, particularly
in relation to new markets and new licensing opportunities.
Results under IFRS
Consolidated profit before taxation for the period was £0.5m (H1 2024:
£4.1m). The decrease on the prior year period is driven by adverse currency
movements, legal costs of defending historic litigation claims, continued
investment in strategic initiatives, and depreciation of the new IT system.
The following is a summary of key items to allow readers to better understand
the results of the period.
Abridged income STATEMENT
The condensed consolidated statement of comprehensive income which is
presented within these half-year results reflects the financial results of the
Group's activities during the period under IFRS. However, this statement, as a
result of its method of presentation, incorporates a number of features that
might affect a clearer understanding of the results of the Group's underlying
transactions. This relates principally to:
· Investment gains attributable to contract holder assets were
£29.8m (H1 2024: £41.7m). These assets are selected by the contract holder
or an authorised intermediary, and the contract holder bears the investment
risk; these gains are therefore also reflected within 'Change in provisions
for investment contract liabilities'.
· Third party fund management fees collected and paid onwards by
the Group to third parties having a relationship with the underlying contract.
In H1 2025 these were £2.5m (H1 2024: £2.5m). These are reflected on a gross
basis in both income and expenses under IFRS.
An abridged consolidated income statement is presented below, excluding the
items of income and expenditure indicated above.
Year
Six months ended ended
31 December 30 June
2024 2023 2024
£m £m £m
Fees and commissions 21.3 21.5 43.7
Investment and other income 2.4 3.1 5.9
23.7 24.6 49.6
Origination costs (7.3) (8.3) (16.1)
Administrative and other expenses attributable to the
Group (14.0) (11.4) (25.0)
Operating profit for the period before litigation and non-recurring expense 2.4 4.9 8.5
items
Net litigation and non-recurring expense items (1.9) (0.8) (3.2)
Profit for the period before taxation 0.5 4.1 5.3
Taxation (0.1) (0.1) (0.1)
Profit for the period after taxation 0.4 4.0 5.2
Fees and commissions
Fees and commissions attributable to Group operations for H1 2025 were £21.3m
(H1 2024: £21.5m). A summary of fees and commissions attributable to Group
activities is set out below:
Six months Year ended
Ended
31 December 30 June
2024 2023 2024
£m £m £m
Contract fee income 14.0 15.2 30.6
Fund management fees 4.7 3.9 8.3
Commissions receivable 2.6 2.4 4.8
21.3 21.5 43.7
Included in contract fee income is £7.8m (H1 2024: £9.1m) representing the
amounts prepaid in previous years and amortised to the income statement, as
can be seen in section 7 in the reconciliation of deferred income.
Net fund management fees, together with commissions receivable, totalling
£7.3m (H1 2024: £6.3m), are related to the value of contract holder Assets
under Administration ("AuA") but also have elements amortised from previous
periods.
Investment and other income
Six months Year ended
Ended
31 December 30 June
2024 2023 2024
£m £m £m
Bank interest, interest on bonds and other income receivable 2.8 2.7 5.5
Foreign exchange (losses) / gains on revaluation
of net operating assets (0.4) 0.4 0.4
2.4 3.1 5.9
The Group's own liquid assets are held predominantly in sterling and invested
in highly rated money market funds and bank deposits.
Further information about the Group's foreign currency exposures is disclosed
in note 4.1 to these condensed consolidated financial statements.
Origination costs
Under IFRS, new business commissions paid, together with the directly
attributable incremental costs incurred on the issue of a contract, are
deferred, and amortised over the life of that contract to match the
longer-term income streams expected to accrue from it. Typical terms range
between 8 and 16 years, depending on the nature of the product. Other elements
of the Group's new business costs, which reflect investment in distribution
resources in line with our strategy, are expensed as incurred.
This accounting policy reflects that the Group will continue to earn income
over the long-term from contracts issued in a given financial year.
Origination costs in the period were:
Six months Year
Ended ended
31 December 30 June
2024 2023 2024
£m £m £m
Origination costs - deferred to match future
income streams 4.4 3.7 8.2
Origination costs - expensed as incurred 0.9 1.2 2.1
Investment in new business in period 5.3 4.9 10.3
Net amortisation of deferred origination costs 2.0 3.4 5.8
7.3 8.3 16.1
Reflecting the long-term nature of the Group's income streams, amounts
totaling £6.5m (H1 2024: £7.1m) have been expensed to match contract fee
income of £7.8m (H1 2024: £9.1m) earned in H1 2025 from contracts issued in
previous financial years. This reflects the profitability of the existing
book.
Summarised origination costs for the period were:
Six months Year ended
Ended
31 December 30 June
2024 2023 2024
£m £m £m
Amortisation of deferred origination costs 6.5 7.1 13.9
Other origination costs incurred during the period 0.8 1.2 2.2
7.3 8.3 16.1
Administrative and other expenses
We continue to manage our expense base robustly to control administrative
expenses while investing strategically in our Japanese proposition and other
product developments.
A summary of administrative and other expenses attributable to the Group is
set out below:
Six months Year
Ended Ended
31 December 30 June
2024 2023 2024
£m £m £m
Salaries and other employment costs 6.6 5.5 11.3
Other administrative expenses 5.9 4.1 7.8
Professional fees, including audit 0.9 0.8 3.2
Recurring administrative and other expenses 13.4 10.4 22.3
Investment in strategic initiatives 0.6 1.0 2.7
Administrative and other expenses,
excl. litigation and non-recurring expense items 14.0 11.4 25.0
Net litigation defence and settlement costs 1.5 0.7 2.5
Provision for doubtful debts 0.4 0.1 0.7
Total administrative and other expenses 15.9 12.2 28.2
Salaries and other employment costs have increased by £1.1m over the
comparative period to £6.6m as previously capitalised staff costs incurred
during the implementation of our new IT system are expensed through profit and
loss following implementation of the system on 1 March 2024. Average Group
headcount for H1 2025 was 175 compared to 182 for the full 2024 financial
year. Headcount at 31 December 2024 was 173.
Other administrative expenses have increased by £1.8m to £5.9m against the
comparative period. This includes an increase of £0.9m in depreciation, and
£0.8m in respect of ongoing development and licence costs of the new IT
system.
Professional fees including audit (excluding litigation defence costs) have
increased by £0.1m to £0.9m against the comparative period, with
inflationary pressures well controlled.
Investment in strategic initiatives of £0.6m represents internal and external
costs to generate opportunities for growth. This includes the costs of our
head office strategy team, support costs for our new IT system and development
costs associated with our Japanese proposition.
Litigation defence and settlement costs represent those costs incurred in
defending claims against Hansard Europe of £1.5m for the period, compared
with £0.7m in H1 2024. The provision for claim settlements was increased by
£0.1m.
Provision for doubtful debts reflects the provision for balances considered
unlikely to be recoverable.
6. CASH FLOW ANALYSIS
The sale of the Group's products typically produces an initial cash strain as
a result of the commission and other costs incurred at inception of a
contract.
The following summarises the Group's own cash flows in the period:
Six months Year ended
Ended
31 December 30 June
2024 2023 2024
£m £m £m
Net cash (deficit) / surplus from operating activities (0.8) 10.5 10.9
Interest received 2.5 2.2 4.2
Net cash inflow from operations 1.7 12.7 15.1
Net cash investment in new business (4.3) (3.3) (8.1)
Purchase of software, computer equipment and property - (2.4) (3.9)
Net cash investment in bond portfolio (4.0) (5.0) -
Cashflows from investing activities - - -
Corporation tax paid - - (0.1)
Net cash (outflow) / inflow before dividends (6.6) 2.0 3.0
Dividends paid (3.7) (3.6) (6.1)
Net cash outflow after dividends (10.3) (1.6) (3.1)
Initial new business cash strain is shown within "net cash investment in new
business" and varies depending on the level and type of new business written.
The Group also invested £4.0m of shareholder funds into a USD bond portfolio
as part of its Treasury management activity. These factors, together with the
payment of our final dividend for 2024 led to a net cash outflow of £10.3m
(H1 2024: £1.6m outflow) in the Group's own cash resources since 1 July 2024.
The Group continues to maintain significant cash reserves to cover short-term
outflows during this period of strategic investment.
Six months ended Year ended
31 December 30 June
2024 2023 2024
£m £m £m
Net cash outflow after dividends (10.3) (1.6) (3.1)
Increase in amounts due to contract holders 6.8 2.6 2.7
Net Group cash movements (3.5) 1.0 (0.4)
Group cash - opening position 65.0 65.4 65.4
Effect of exchange rate movements (0.2) 0.1 -
Group cash - closing position 61.3 66.5 65.0
Bank deposits and money market funds
The Group holds its liquid assets in highly rated money market liquidity funds
and with a wide range of deposit institutions to diversify counterparty risk.
Deposits totalling £15.0m (2024: £20.7m) have original maturity dates
typically greater than 3 months and are therefore excluded from the definition
of "cash and cash equivalents" under IFRS and are instead included within
'Deposits and money market funds' in the consolidated balance sheet. The
following table summarises the total cash and deposits at the balance sheet
date.
The following table summarises the total shareholder cash and deposits at the
balance sheet date.
31 December 30 June
2024 2023 2024
£m £m £m
Money market funds 45.7 34.7 47.3
Short-term deposits with credit institutions 0.6 11.1 0.6
Cash and cash equivalents under IFRS 46.3 45.8 47.9
Longer-term deposits with credit institutions 15.0 20.7 17.1
Group cash and deposits 61.3 66.5 65.0
7. Abridged consolidated balance sheet
The condensed consolidated balance sheet presented under IFRS reflects the
financial position of the Group as at 31 December 2024. As a result of its
method of presentation, the consolidated balance sheet incorporates the
financial assets held to back the Group's liability to contract holders and
incorporates the net liability to those contract holders of £1,153.0m (31
December 2023: £1,106.0m). Additionally, that portion of the Group's capital
that is held in bank deposits is disclosed in "cash and cash equivalents"
based on original maturity terms, as noted above.
The abridged consolidated balance sheet presented below, adjusted for those
differences in disclosure, allows a better understanding of the Group's own
capital position.
As at 31 December 30 June
2024 2023 2024
£m £m £m
Assets
Deferred origination costs 110.0 114.5 112.1
Other assets 46.5 30.0 38.7
Bank deposits and money market funds 61.3 66.5 65.0
217.8 211.0 215.8
Liabilities
Deferred income 139.0 142.2 140.2
Other payables 61.2 46.8 54.7
200.2 189.0 195.0
Net assets 17.6 22.0 20.8
Shareholders' equity
Share capital and reserves 17.6 22.0 20.8
Deferred origination costs
The deferral of origination costs ("DOC") reflects that the Group will earn
fees over the long term from contracts issued in a given financial year. These
costs are recoverable out of future net income from the relevant contract and
are charged to the consolidated statement of comprehensive income on a
straight-line basis over the life of each contract.
The table below shows lower origination costs deferred during the period as a
result of lower levels of new business sold compared to last year.
31 December 30 June
2024 2023 2024
£m £m £m
At beginning of financial year 112.1 117.8 117.8
Origination costs deferred during the period 4.4 3.8 8.2
Origination costs amortised during the period (6.5) (7.1) (13.9)
110.0 114.5 112.1
Deferred income
The treatment of deferred income ensures that contract fees are taken to the
consolidated statement of comprehensive income in equal instalments over the
longer-term, reflecting the services to be provided over the period of the
contract. This is consistent with the treatment of deferred origination costs.
Deferred income at the balance sheet date is the unamortised balance of
accumulated initial amounts received on new business.
The proportion of income deferred in any one year is dependent upon the mix
and volume of new business flows in previous years. The Group's focus on
regular premium business means that these fees are received over the initial
period of the contract, rather than being received up front, as is often the
case with single premium contracts.
The majority of initial fees collected during the year relates to charges
taken from contracts issued in prior financial years demonstrating the cash
generative nature of the business. Regular premium contracts issued in this
financial year will generate the majority of their initial fees over the next
18 months on average.
The movement in value of deferred income over the financial year is summarised
below
31 December 30 June
2024 2023 2024
£m £m £m
At beginning of financial year 140.2 144.8 144.8
Initial fees collected in the period and deferred 6.6 6.5 12.7
Income amortised during the period to fee income (7.8) (9.1) (17.3)
139.0 142.2 140.2
8. Assets under administration ("AuA")
In the following paragraphs, "AuA" refers to net assets held to cover
financial liabilities as analysed in note 13 to the condensed consolidated
financial statements presented under IFRS. Such assets are selected by or on
behalf of contract holders to meet their investment needs.
The Group receives investment inflows to its AuA from single and regular
premium contracts which are offset by charges, withdrawals, premium holidays
affecting regular premium policies and by market valuation movements.
The majority of premium contributions and AuA are designated in currencies
other than sterling, reflecting the wide geographical spread of those contract
holders. The currency denomination of AuA at 31 December 2024 is similar to
that of 31 December 2023 and consists of approximately 74% denominated in US
dollars, 19% in sterling and 6% denominated in euro as reflected in note 4.1
to the condensed consolidated financial statements.
Certain collective investment schemes linked to customers' contracts can from
time to time become illiquid, suspended or be put into liquidation. In such
cases, the Directors are required to exercise their judgement in relation to
the fair value of these assets. The cumulative impact on the balance sheet
is not material.
The following table summarises Group AuA movements for H1 2025:
31 December 30 June
2024 2023 2024
£m £m £m
Deposits to investment contracts - regular premiums 33.6 38.8 74.4
Deposits to investment contracts - single premiums 31.3 13.8 33.9
Withdrawals from contracts and charges (90.5) (87.6) (173.6)
Effect of market and currency movements 27.7 39.5 114.7
Movement in period 2.1 4.5 49.4
Opening balance 1,150.9 1,101.5 1,101.5
Closing balance 1,153.0 1,106.0 1,150.9
Group AuA increased to £1,153.0m during H1 2025, an increase of £2.1m from
the position at 30 June 2024. Since 31 December 2023, AuA have increased
£47.0m (4.2%) reflecting the move in global stock markets over the period.
The analysis of AuA held by each Group subsidiary to cover financial
liabilities is as follows:
31 December 30 June
2024 2023 2024
£m £m £m
Hansard International 1,097.5 1,044.5 1,091.6
Hansard Europe 55.5 61.5 59.3
1,153.0 1,106.0 1,150.9
Premiums acquired by Hansard Worldwide are reinsured to Hansard International
and therefore are included within Hansard International's total AuA.
Since it closed to new business in 2013, Hansard Europe's AuA has been
declining broadly in line with expectations as withdrawals are made or
contracts mature.
9. CAPITALISATION AND SOLVENCY
The Group's life insurance subsidiaries continue to be well capitalised with
free assets in excess of the regulatory requirements in each relevant
jurisdiction. There has been no material change in the Group's management of
capital during the period.
Solvency capital is a combination of future margins, where permitted by
regulation, and capital. Where future margins are denominated in non-sterling
currencies, it is vulnerable to the weakening of those currencies relative to
sterling. All of the Group's excess capital is invested in a wide range of
deposit institutions, highly rated money market liquidity funds, and
high-quality corporate bonds, predominantly in sterling. This approach
protects the Group's capital base from stock market falls.
The in-force portfolio has no material investment options or guarantees that
could cause capital strain and the Group retains very little of the mortality
risk that it has accepted (the balance being reinsured with premium
reinsurers). There is no longevity risk exposure.
Policy on capital maintenance
It is the Group's policy to maintain a strong capital base in order to:
· satisfy the requirements of its contract holders, creditors and
regulators;
· maintain financial strength to support new business growth and
create shareholder value;
· match the profile of its assets and liabilities, taking account
of the risks inherent in the business;
· generate operating cash flows; and
· fund dividend requirements.
Within the Group each subsidiary company manages its own capital. Capital
generated in excess of planned requirements is returned to the Company by way
of dividends. Group capital requirements are monitored by the Board. The
capital held within Hansard Europe is considered not to be available for
dividend to Hansard Global plc until such time as the legal cases referred to
in section 11 below are substantially resolved.
10. DIVIDENDS
A final dividend of 2.65p per share in relation to the previous financial year
was paid in November 2024. This amounted to £3.7m. A portion of the dividend
is paid in US dollars which gives rise to the variance against the prior year
when translated to pounds sterling.
The Board has considered the results for H1 2025, the Group's continued cash
flow generation and its future expectations and has resolved to pay an interim
dividend of 1.8p per share (H1 2024: 1.8p). This dividend will be paid on 24
April 2025.
The Board has considered the impact of the dividend on the negative
consolidated retained earnings of £2.7m as at 31 December. Dividends are paid
from Hansard's parent company retained earnings, and not from consolidated
Group retained earnings. As at 31 December Hansard's parent company retained
earnings were £13.1m and as such the ability to pay dividends is not
constrained.
11. complaints and litigation
Financial services institutions can be drawn into disputes in cases where the
performance of assets selected directly by or on behalf of contract holders
through their advisors fails to meet their expectations. This is particularly
relevant in the case of more complex products distributed throughout Europe
prior to 2014.
Even though the Group has never given any investment advice, as this is left
to the contract holder directly or through an agent, advisor or an entity
appointed at their request or preference, the Group has been subject to a
number of complaints in relation to the performance of assets linked to
contracts. Most of the cases have arisen in Italy, with a smaller number in
Belgium and Germany.
As at 30 June 2024, the Group had been served with writs with a net cumulative
exposure totalling €23.8m, or £20.2m in sterling terms (30 June 2023:
€26.1m / £22.4m) arising from contract holder complaints and other asset
performance-related issues. The corresponding figure as at 31 December 2024
was €24.1m or £20.0m (31 December 2023: €25.2m or £22.0m). Between 31
December 2024 and the date of this report there have been no material changes.
Our policy is to maintain contingent liabilities even where we win cases in
the court of first instance if such cases have been subsequently appealed.
This includes our largest single case in Belgium.
We have previously noted that we expect a number of our claims to ultimately
be covered by our Group insurance cover. During the period to 31 December
2024, we recorded £0.5m in insurance recoveries in relation to litigation
expenses (31 December 2023: £0.7m). We expect such reimbursement to
continue during the course of those claims.
While it is not possible to forecast or determine the final result of such
litigation, based on the pleadings and advice received from the Group's legal
representatives and experience with cases previously successfully defended, we
believe we have a strong chance of success in defending these claims. Other
than smaller cases where, based on past experience, it is expected a
settlement might be reached, the writs have therefore been treated as
contingent liabilities and are disclosed in note 21 to the consolidated
financial statements. Where there is an established pattern of settlement
for a grouping of claims, a provision has been made for the remaining
exposures and included in note 20 'Provisions', to the extent that they can be
reliably estimated.
12. Net asset value per shaRE
The net asset value per share on an IFRS basis at 31 December 2024 is 12.8p
(31 December 2023: 16.2p) based on the net assets in the consolidated balance
sheet divided by the number of shares in issue, being 137,557,079 ordinary
shares (31 December 2023: 137,557,079).
13. Risk Management and internal control
The Group continues to operate a comprehensive Enterprise Risk Management
Framework, reflective of the Board's focus on effective risk management as an
integral element of corporate success. The ERM Framework sets out the
governance arrangements, principles, guidelines, practices and standards for
risk management and internal control, which cumulatively ensure that the
business is robustly prepared to identify, understand, and navigate the
uncertainties and risks which it may encounter, and which can either pose
threats or offer opportunities. The ERM Framework ensures that all such
threats and opportunities, whether actual or emerging, are identified,
assessed, monitored, managed, and reported using structured, consistent, and
comprehensive methodologies, which seek to embed risk management within
strategic decision-making and business planning activities and continuously
shape organisational values and culture. The maturity of the ERM Framework and
its capacity to respond quickly to emerging risks and adapt to changes arising
via the internal or external environment, ensure that risk management and
internal control remain central to the Board's oversight, direction and
control of the Group, compelling informed decision making and sound business
practices.
Approach
Having regard to the Financial Reporting Council's 'Guidance on Risk
Management, Internal Control and Related Financial and Business Reporting',
the ERM Framework encompasses the policies, processes, tasks, cultural
attributes, behaviours, reporting conventions, and other aspects of the
Group's environment, which cumulatively:
· Support the Board's determination of the nature and extent of the
Group's principal risks and the boundaries of risk appetite governing the
pursuit and achievement of strategic objectives.
· Inform the Board's understanding and assessment of existing,
evolving, and emerging risks, together with combinations of those risks in the
form of plausible stresses and scenarios, which have the potential to threaten
the Company's business model, future performance, solvency, liquidity,
operational resilience, regulatory standing, or reputation. This includes
analysis of the likelihood, impact, and time horizon over which such risks, or
combinations of risks, might emerge or crystallise and determining how such
risks should be managed or mitigated to reduce their likelihood or impact.
· Facilitate the effective and efficient operation of the Group and
its subsidiary entities by enabling a consolidated and comprehensive approach
to the management of risks across the Group, with specific attention to
aggregate impacts and effects, enabling appropriate responses to significant
business, operational, financial, compliance and other risks to business
objectives, so safeguarding the assets of the Group.
· Help to ensure the quality of internal and external reporting.
This requires the maintenance of proper records and processes that generate a
flow of timely, relevant, and reliable information from within and outside the
Group, enabling the Board to form their own view on the effectiveness of risk
management and internal control arrangements through the regular provision of
relevant information and assurances.
· Seek to ensure continuous compliance with applicable laws and
regulations as well as with internal policies governing the conduct of
business; and
· Drive the cultural tone and expectations of the Board in respect
of governance, risk management and internal control arrangements and the
delegation of associated authorities and accountabilities.
The ERM Framework has been designed to be appropriate to the nature, scale,
and complexity of the Group's business at both corporate and subsidiary level.
The ERM Framework components are reviewed on at least an annual basis and
refined, if necessary, to ensure they remain fit for purpose in substance and
form and continue to support the Directors' assessment of the adequacy and
effectiveness of the Group's risk management and internal control systems.
Such assessment depends upon the Board maintaining a thorough understanding of
the Group's risk profile, including the types, characteristics,
interdependencies, sources, and potential impact of both existing and emerging
risks on an individual and aggregate basis.
Risk governance arrangements
The Board retains ultimate responsibility for the ERM Framework and its
effective operation, and the Directors are responsible for determining,
evaluating, and controlling the nature and extent of the risks which the Board
is willing to accept across the spectrum of risk disciplines. The Board has
formally delegated certain responsibilities in respect of internal controls
and risk management to the Audit and Risk Committee. These responsibilities
are defined within the Committee's terms of reference and provide for a range
of important oversight and scrutiny protocols including:
· Continuous review of the Group's internal financial controls (being
the systems established to identify, assess, manage, and monitor financial
risks) and other internal control and risk management systems relating to
financial reporting.
· Robust assessment of the emerging and principal risks facing the
Group, identified, and reported via established ERM Framework components, and
the provision of comfort to the Board that risks are being managed and
controlled within the Board's overall risk appetite.
· Independent evaluation of the ERM Framework to confirm that it
remains adequate, effective, and proportionate to the nature, scale and
complexity of the risks inherent in the business.
During the period to 31 December 2024 the Group Risk Forum ("GRF") has
continued to champion the embedding of risk ownership, ensuring
responsibilities and accountabilities for risk management and risk-based
decision making are transparent and proactively owned at all business levels.
The value of effective, dynamic interfaces between the governance, risk
management and internal control conventions of the ERM Framework and those
constituting the Group and subsidiary Own Risk and Solvency Assessment
("ORSA") cycles remains a core focus for the GRF.
The Group ORSA report reflects the cycle of ongoing activities and
arrangements which enable the Board and the Executive Committee to properly
assess and understand at a practical level the short and long-term risks
facing the Group and the capital required to cover those risks, under both
normal and stressed conditions. The 2024 ORSA cycles concluded during the
reporting period, and these considered the major sources of risk that the
Group, or the subsidiary entities, may face under the principal and
subordinate risk designations of the ERM Framework. Both internal and external
risks were considered, together with emerging risks and any risks associated
with the Group's systems of governance. The ORSA included capital, performance
and strategic information, providing management with key information for
decision making.
The disciplines of the ERM Framework seek to coordinate risk management in
respect of the Group as a whole, including for the purpose of ensuring
compliance with capital adequacy requirements, liquidity adequacy requirements
and regulatory capital requirements, in line with the Isle of Man Financial
Services Authority Risk-Based Capital Regime.
Governance, risk management and internal control protocols remain structured
upon a 'three lines' model, which determines how specific duties and
responsibilities are assigned and coordinated. First line management are
responsible for identifying risks, executing effective controls, and
escalating risk issues and events to the Group's Control Functions. The Group
Risk and Compliance Functions (Second line) oversee and work in collaboration
with the First Line, ensuring that the business is conducted in a manner
consistent with rules, limits, and risk appetite constraints. The Group
Internal Audit Department (Third line) provides independent assurance services
to the Board and the Executive Committee on the adequacy and effectiveness of
the Group's governance, risk management and internal control arrangements.
The ERM Framework seeks to add value through embedding risk management and
effective internal control systems as continuous and developing processes
within strategy setting, programme level functions and day-to-day operating
activities. The ERM Framework also acknowledges the significance of
organisational culture and values in relation to risk management and their
impact on the overall effectiveness of the internal control framework.
Emerging Risks
The ERM Framework promotes the pursuit of its overarching performance,
information, and compliance objectives through focus on five interrelated
elements, which enable the management of risk at strategic, programme and
operational level to be integrated, so that layers of activity support each
other. The five interrelated elements are defined as:
· Management oversight and the control culture.
· Risk recognition and assessment.
· Control activities and segregation of duties.
· Information and communication.
· Monitoring activities and correcting deficiencies.
In addition to existing risks the ERM conventions, which support delivery of
the elements listed above, target emerging and evolving risks using both
top-down and bottom-up bases. The top-down aspect involves the Board regularly
analysing and evaluating the nature and extent of the risks to which the Group
is or may be exposed, even where these may be difficult to assess and
quantify. The bottom-up approach involves the identification, review and
continuous monitoring of risk issues and emerging risks at functional and
divisional levels, with analysis and formal reporting to the Group Risk Forum
on a quarterly basis. This allows actions to be developed or adapted on a
timely basis and enables onward analytical reporting to the Board. These
arrangements ensure that the Board remains aware of potential changes in risk
profile on a forward-looking basis and sensitive to the materiality of
potential impacts.
Stress and scenario testing is used to explore, assess, and quantify emerging
risks as well as to analyse and assess any changes in existing aspects of the
'Risk Universe', which are monitored via the ERM Framework. Such assessment
and analyses use both quantitative tests and qualitative assessments to
consider reasonably plausible risk events, including those stresses and
scenarios that could lead to failure of the business, approximated to the
range of impact types which can be envisaged. The results of the stress and
scenario testing are considered and explored by the Group Risk Forum, the
Audit and Risk Committee and the Board, as necessary and appropriate.
The system of internal control is designed to understand, mitigate, and
manage, rather than eliminate risk of failure to achieve business objectives,
and seeks to provide reasonable, rather than absolute, assurance against
material misstatement or loss.
Review of Risk Management and Internal Control Systems
The results of the risk management processes combine to facilitate
identification of the principal business, financial, operational and
compliance risks and any associated key risks at a subordinate level.
Established reporting cycles enable the Board to maintain oversight of the
quality and value of risk management and internal control activities
throughout the year and ensure that the entirety of the governance, risk
management and internal control frameworks, which constitute the ERM
Framework, are operating effectively and as intended. These processes have
been in place throughout the year under review and up to the date of this
report.
Independently of its quarterly and ad hoc risk reporting arrangements the
Board has conducted its annual review of the effectiveness of the Company's
risk management and internal control systems including financial, operational
and compliance controls. This review is undertaken in collaboration with the
Audit and Risk Committee and is based upon analysis and evaluation of:
· Attestation reporting from the key subsidiary companies of the
Group as to the effective functioning of the risk management and internal
control frameworks and the ongoing identification and evaluation of risk
within each subsidiary.
· Formal declarations from Executive Managers, via quarterly risk
and control self-assessments, that risks falling under their respective
span of control are being managed and assessed appropriately and key controls
are working effectively and as intended. Reporting must include progress
updates on the timely and effective delivery of Management Actions to address
any identified control weaknesses, in accordance with the commitments recorded
in the Group Risk Management Platform. The cumulative results of cyclical risk
reporting by senior and executive management via the GRF, having regard to the
'five pillar' structure of the ERM Framework, which drives analytical
reporting to the Audit and Risk Committee. Independent assurance work by the
Group Internal Audit Department to identify any areas for enhancements to
internal controls and work with management to define associated action plans
to deliver them.
The Board has determined that there were no areas for enhancement which
constituted a significant weakness for the year under review and the Directors
are satisfied that the Group's governance, risk management and internal
control systems are operating effectively and as intended.
Financial Reporting Process
Integral to ERM monitoring and reporting arrangements are the conventions
which ensure that the Board maintains a continuous understanding of the
financial impacts of the Group failing to meet its objectives, due to
crystallisation of an actual or emerging risk, or via the stress and scenario
events, which the Board considers to be reasonably plausible. This includes
those stresses and scenarios that could lead to a failure of the business.
Planning and sensitivity analyses incorporate Board approval of forecast
financial and other information. The Board receives regular representations
from Senior Executives in this regard.
Performance against targets is reported to the Board quarterly through a
review of Group and subsidiary companies' results based on accounting policies
that are applied consistently throughout the Group. Financial and management
information is prepared quarterly by the Chief Financial Officer ("CFO") and
presented to the Board and the Audit and Risk Committee. The members of the
Audit and Risk Committee review the interim financial statements for the half
year ending 31 December and the full financial year and engage with the CFO to
discuss and challenge the presentation and disclosures therein. Once the draft
document is approved by the Audit and Risk Committee, it is reviewed by the
Board before final approval by the Board.
Outsourcing
The majority of investment dealing and custody processes in relation to
contract holder assets are outsourced under a formal contract to Capital
International Limited (CIL, https://www.capital-iom.com), a company authorised
by the Isle of Man Financial Services Authority and a member of the London
Stock Exchange. The contract is managed by a dedicated Relationship Manager
against a documented Service Level Agreement, which includes Key Performance
Indicators. CIL is required to confirm quarterly that no material control
weaknesses have been identified in their operations; this is overseen via
service delivery monitoring performed by the Relationship Manager. Each year
CIL are required to confirm and evidence the adequacy and effectiveness of
their internal control framework through a formal Assurance Report on Internal
Controls, with an external independent review performed in in 2023 and 2024.
Our core policy administration platform is provided as a "Software As A
Service" solution by Majesco (www.majesco.com). This covers all policy and
advisor administration as well as the provision of the Hansard Client and
Advisor online portals which support self-service administration. Monthly
service meetings are held with Majesco with a formal annual review
undertaken. Majesco also participates in scheduled security tests and
simulations. The Majesco system code is held in escrow with the NCC Group,
which supports contingency planning in the event of a failure of a provider.
Manx Telecom (wwww.manxtelecom.com) provides our hosting services and core
internet connectivity, which supports several core infrastructure elements
such as our virtual desktops and servers. Manx Telecom data centres operate
to Tier 3 standard and are ISO 27001 accredited. Monthly service meetings are
held with Manx Telecom with a formal annual review undertaken. Manx Telecom
is an active participant in scheduled security tests and simulations.
Risks Relating to the Group's Financial and Other Exposures
Hansard's business model involves the controlled acceptance and management of
risk exposures. Under the terms of the unit-linked investment contracts issued
by the Group, the contract holder bears the investment risk on the assets in
the unit-linked funds, as the policy benefits are directly linked to the value
of the assets in the funds. These assets are administered in a manner
consistent with the expectations of the contract holders. The Group maintains
a precise match between the investment assets held and the contract holder
liabilities, and so the market risk and credit risk lie with contract holders.
The Group's exposure on this unit-linked business is limited to the extent
that income arising from asset management charges and commissions is generally
based on the value of assets in the funds, and any sustained falls in value
will reduce earnings. In addition, there are certain financial risks (credit,
market, and liquidity risks) in relation to the investment of shareholders'
funds. The Group's exposure to financial risks is explained in note 3 to the
consolidated financial statements.
The Board believes that the principal risks facing the Group's earnings and
financial position are those risks which are inherent to the Group's business
model and operating environment. The regulatory landscape continues to evolve
at both a local and international level and the risk management and internal
control frameworks of the Group must remain responsive to developments which
may change the nature, impact or likelihood of such risks, or the time horizon
within which they might crystallise.
Principal Risks
The following table sets out the principal inherent risks that may impact the
Group's strategic objectives, profitability, capital position or resilience
and provides an overview of how such risks are managed or mitigated. The Board
robustly reviews and considers its principal risks on at least a quarterly
basis and for the period ended 31 December 2024 has continued to consider
specifically the likelihood, impacts and timescales within which such risks
might crystallise, together with assessment of contingent uncertainties and
any emerging risks. No emerging risks have been identified during the
reporting period, which require disclosure additional to the principal risks
described below.
Risk Risk Factors and Management
Distribution Risk: The business environment in which the international insurance industry
operates is subject to continuous change and development as new market and
competitor forces come into effect, regulatory landscapes evolve, and
technological advancements are realised. Any failure by the Group to ensure
Arising from poor planning, execution or governance of distribution strategy, that distribution strategy is well planned, governed and executed can be
or the emergence of events or conditions which obstruct the achievement of expected to undermine competitive advantage in commercially significant
business plan targets, including market changes, technological advancement, jurisdictions, or market segments, or the Group's efforts to build and sustain
loss of key intermediary relationships or competitor activity. successful distribution relationships.
How we manage the risk:
· Robust governance, risk management and internal control practices
underpin the development and formalisation of distribution strategy. Strategy
revisions are designed to add additional scale to the business, on a more
diversified basis, through organic growth at acceptable levels of risk and
profitability.
· Key Risk Indicators provide for continuous monitoring of
marketplaces, competitor activity and consumer sentiment by the Group Risk
Forum and the early identification of emerging risks or threats. Reporting
protocols enable the rapid escalation of any adverse trends to the Audit and
Risk Committee.
· Stress and scenario modelling considers the consequences of
production falling materially above or below forecast new business levels.
This allows the Board to ensure that forecasting and planning activities are
sufficiently robust and well targeted.
· Continuous investment in and development of technology. During
the reporting period we have continued to maintain close contact with our
distribution partners as new technological solutions were deployed.
· Investment in new markets and expansion of existing markets,
developing new key distributor relationships and new product development for
specific markets and globally.
Market Risk: Market risk remains an inherent element of the Group's unit linked business
and is continuously assessed and monitored via the ERM Framework. This
monitoring recognises the international nature of the Group's operations and
the challenges which might emerge from a significant adverse currency movement
Arising from major market stresses or fluctuations in market variables, over a sustained period. Key risk indicators also assess the potential for
resulting in a fall in equity or other asset values, currency volatilities or balance sheet and profit reduction impacts to emerge from a drop in equities,
a combined scenario manifesting. and the potential contagion effects for the broader risk portfolio. Such
contagion might include deferred impacts to profit through reduced sales
activity, concentration risks on fund holdings / underlying assets, and
reduced incomes through increased lapse rates.
Simultaneously the Board recognises that socioeconomic vulnerabilities and
prevailing uncertainties associated with economic volatility might curb
consumer appetite for the selection and purchase of financial services
products and the period over which business is retained. In addition, the
Group operates internationally and earns income in a range of different
currencies, with the majority of premiums denominated in USD, whilst the vast
majority of its operational cost base is denominated in GBP. A significant
adverse currency movement over a sustained period remains a principal risk to
the Group.
How we manage the risk:
· The Board recognises that market volatilities and currency
movements are unpredictable and driven by a diverse range of factors and these
risks are inherent in the provision of investment-linked products. KRIs are
established to monitor evolving and emerging indicators of adverse experience
to enable the triggering of management actions at the earliest opportunity.
· The currencies of assets and liabilities are matched within set
tolerances and certain expenses are invoiced in US Dollars to match against US
Dollar income streams.
· Business plans are modelled across a broad range of market and
economic scenarios and take account of alternative commercial outlooks within
overall business strategy. This promotes a greater understanding of market and
currency risk, the limits of the Group's resilience and the range of possible
mitigating options.
· Stress testing performed during the year ended 30 June 2024
assessed the impacts of reasonably plausible market risk events and scenarios,
including those resulting from macroeconomic challenges driven by geopolitical
instabilities, inflationary outlooks, uncertainties in commodity price and
currency volatilities.
· The long-term nature of the Group's products serves to smooth
short term currency fluctuations. However, longer term trends are monitored
and considered in pricing models.
Credit Risk: In dealing with third party financial institutions, including banking, money
market and settlement, custody, reinsurers and other counterparties, the Group
is exposed to the risk of financial loss and potential disruption of core
business functional and operational processes.
Arising from the failure or default of a counterparty such that the Group does
not receive cash flows or assets to which it is entitled. Financial loss can also arise when the funds in which contract holders are
invested become illiquid, resulting in past and future fee income not being
received. The failure of Independent Financial Advisors ("IFAs") can also
result in loss where unearned commissions can be due back to the Group.
How we manage the risk:
· The Group seeks to limit exposure to loss or detriment via
counterparty failure through robust selection criteria, minimum rating agency
limits, pre-defined risk-based limits on concentrations of exposures and
continuous review of positions to identify, evaluate, restrict, and monitor
various forms of exposure on an individual and aggregate basis. These include
robust selection criteria in respect of intermediaries with whom we establish
Terms of Business and ongoing monitoring in accordance with key risk
indicators and appetite tolerance limits.
· During the reporting period we have continued to closely monitor
geopolitical developments and potential disruptions to international payment
systems and capital markets arising from the extensive sanctions in force in
the context of the Russia-Ukraine conflict.
Liquidity and Cashflow Risk: If the Group does not have sufficient levels of liquid assets and cashflow to
support business activities or settle its obligations as they fall due, the
Group may be in default of its obligations and may incur significant sanction,
loss, or cost to rectify the position.
Arising from a failure to maintain adequate levels of liquidity and cashflow
to meet financial obligations under both planned and stressed conditions. How we manage the risk:
· Shareholder and policyholder cash assets are invested in a
prudent manner, in accordance with set criteria, designed to mitigate
liquidity and cashflow risk, including high quality Money Market Funds, Fixed
Deposits and Corporate Bonds.
· The Treasury Working Group, which reports to the Investment
Committee, oversees the day-to-day investment of balances. The Investment
Committee and Audit and Risk Committee are responsible for setting the
criteria used.
Legal and Regulatory Risk: The scale and pace of change in regulatory and supervisory environments and
expectations continue to require efficient and effective ways to evidence and
demonstrate how legal and regulatory obligations are met, whilst compliance
analytics and high-quality data driven insights are becoming increasingly
Arising from changes in the regulatory landscape, which adversely impact the important.
Group's business model, or from a failure by the Group, or one of its
subsidiary entities, to meet its legal, regulatory or contractual obligations, The direction of regulatory travel demands continued investment in the
resulting in the risk of loss or the imposition of penalties, damages or fines capacity, competence, and capability of resourcing across all business areas,
having regard to the extent of risk interdependencies and the embedding of
personal accountability regimes. The impacts associated with crystallisation
of a significant legal or compliance failing, including sanctions or judgments
against Hansard entities, financial penalties, public disclosures,
reputational damage, restrictions on activities and other forms of
intervention, have been escalated by sea-changes in political landscapes and
shifting supervisory attitudes to regulatory effectiveness.
The interpretation or application of regulation over time may impact market
accessibility, broker relationships and / or competitive viability. If the
Group fails to monitor the legal and regulatory environment or adequately
integrate the management of associated obligations within strategic, business
model or business planning processes there may be material risk to the
achievement of strategic objectives both in the short and longer term.
How we manage the risk:
· Robust strategic planning processes informed by analytical review
of the external environment and consideration of associated risk in the short
and longer term.
· Continuous monitoring and review of developments in international
law and regulation and proactive management of how such developments might
shape jurisdictional specific reaction.
· Active and transparent engagement with regulatory authorities and
industry bodies on a multi-jurisdictional basis, including active engagement
in and responding to regulatory consultation exercises.
· Maintenance of robust governance, risk management and internal
control arrangements to ensure that legal and regulatory obligations are
substantively met on a continuing basis.
· Active engagement with professional advisors to address specific
risks and issues that arise.
Financial Crime Risk: The Board recognises that financial crime takes on many forms, allowing
criminal actors and organised crime gangs alike to infiltrate economic and
financial systems, with additional challenges presented by geoeconomic
uncertainties and geopolitical instabilities. The breadth of financial crime
affirms the ubiquity of this risk with inherent links to violent crime and the
ability to significantly undermine jurisdictional social and economic
Arising from any failure to evidence and demonstrate the establishment, structures. The rapid innovation of digital technologies is increasingly
implementation and maintenance of effective governance, risk management and enabling financial crimes to be carried out remotely, presenting additional
internal control arrangements for the prevention and detection of illicit complexities to prevention and detection and highlighting its transnational
economic activity, including money laundering, terrorist financing, impacts.
proliferation financing, sanctions evasion, bribery, corruption, and fraud, or
to ensure the arrangements are operating effectively and as intended on a Within this context regulators are taking, and expecting from firms, an
continuing basis. increasingly holistic approach to mitigating financial crime risks with robust
and effective systems and controls established to detect and prevent all forms
of illicit economic activity. It is imperative that these arrangements are fit
for purpose in terms of both design and implementation and are capable of
adapting to emerging and evolving financial crime risks.
How we manage the risk:
· Rigorous governance, risk management and internal control
arrangements to prevent and detect illicit economic activity with the
capability to identify and respond to any emerging risks or threats.
· Rapid, scalable, and effective sanctions screening mechanisms to
ensure robust, effective, and compliant understanding of the landscape on a
continuing basis.
· Implementation of scrutiny and oversight controls across all
three lines of defence to ensure governance layers proactively target both the
design and effective operation of the risk management and internal control
frameworks.
· Highly experienced technical resource dedicated to respective
compliance deliveries.
Culture and Conduct Risk: Organisational culture remains under scrutiny by the Board as a fundamental
driver of corporate success, prudential soundness, and compliant conduct. Any
failure to adequately assess, monitor, manage and mitigate risks to the
Arising from any failure of governance, risk management and internal control delivery of fair customer outcomes, or to market integrity, can be expected to
arrangements, via corporate or individual actions. result in material detriment to the achievement of strategic objectives and
incur regulatory censure, financial penalty, contract holder litigation and /
or material reputational damage.
Clear and heightened regulatory expectations of individual and corporate
accountability continue to connect governance, risk, and compliance
obligations directly to cultural imperatives and the responsibilities assigned
to individual Senior Managers.
How we manage the risk:
· Programme level initiatives to address and support cultural
change and development have remained in active progress during the reporting
period with the results of investment in culture diagnostics informing
business decision-making and tactical solutions to drive cultural change,
where needed.
· Iterative enhancements to the Group's ERM Framework continue to
drive and deliver the integration of conduct risk management at both a
cultural and practical level.
· Business activities designed to manage the volume and velocity of
regulatory change include a core focus on ensuring compliance with conduct
risk obligations, managing conflicts of interest, preventing market abuse, and
building robust governance arrangements around new product development and
product suitability processes.
· Forward looking risk indicators and executive leadership in
respect of understanding and addressing the drivers of conduct risk focus on
all core areas with assessment at strategic, functional, and operational
levels.
· The Group maintains regular dialogue with its regulatory
authorities and with its external advisors in relation to developments in the
regulatory environments in which we operate.
Operational Resilience Risk: The ability to maintain critical services or operations during periods of
disruption is receiving increasing levels of regulatory scrutiny with
concurrent growth in the formalisation of regulatory expectation. 'Resilience
Arising from any exposure to risk events with the capacity to cause Principles' build on the real-world tests presented by the Covid-19 pandemic
operational failures or wide scale disruptions in financial markets, whether and the near-term threat of disruption of key global infrastructure in the
directly or via a third party. context of the ongoing Russia-Ukraine conflict. Resilience risk and associated
regulatory expectations directly extend to threats originating via third
parties, including external providers, supply chains networks and outsourcing
architectures intended to leverage economies of scale, gain access to
specialist expertise, or deliver advanced technologies supporting innovative
services.
Global supervisory attention is focussed on regulating for resilience by
ensuring that strategies such as grounding resilience analyses in key delivery
requirements, appreciating the potential for systemic vulnerabilities and
embracing a diversity of approaches combine to strengthen the ability of
financial services firms to withstand operational risk related events.
How we manage the risk:
· ERM conventions guide the identification and assessment of events
or scenarios presenting risk to operational resilience - typically pandemics,
cyber incidents, technology failures or natural disasters - as well as supply
chain disruption impacts to critical processes, business continuity and good
governance.
· Impact tolerances, together with mapping and testing allow the
identification of services which could cause harm, if disrupted and identify
any areas of vulnerability.
· Stress testing, continuity planning, and recovery and resolution
strategies provide for continuous review of the adequacy and effectiveness
with which the business can respond to and recover from disruptions.
Cyber and Information Security Risk: The nature and complexity of cyber threats and cyber risk present the single
most significant risk to financial services firms. The mounting sophistication
and persistence of cybercrime and the growing adoption of highly advanced,
Arising from the increased digitalisation of business activities and growing nation-state type tools by cyber criminals, underscore the challenges in
dependence upon technology in the context of exposure to elevated and more understanding and anticipating the nature of cyber threats and cyber risks.
pernicious forms of digital and cyber risk. Over the longer-term, technological advances, including advances in generative
AI, can be expected to enable a wide range of state and non-state agents to
access information which will allow new tools of disruption to be
conceptualised and developed.
Organised crime continues to exploit weaknesses in cyber defences whilst new
technological capabilities and use of third-party platforms add to the
complexity of understanding the complete reach of cyber and information
security exposures. Geopolitical tensions and the rapid escalation of conflict
combined with technological advances in generative AI and the leveraging of
misinformation and disinformation will continue to provoke unprecedented cyber
risks for Western governments and corporations.
Building resilience to continuously evolving cyber risk remains a priority for
all stakeholders focussed on three core areas - cyber risk identification,
cyber risk governance and cyber risk resilience In the event of any material
failure in core business systems, or business processes, or if the Group fails
to take adequate and appropriate measures to protect its systems and data from
the inherent risk of attack, disruption and / or unauthorised access by
internal or external parties, this could result in confidential data being
exposed and / or systems interruption. A significant cybercrime event could
result in reputational damage, regulatory censure, and financial loss.
How we manage the risk:
· Continuous focus on the maintenance of a robust, secure, and
resilient IT environment that protects customer and corporate data as a core
element of our operational resilience mapping.
· Control techniques deployed to evaluate the security of systems
and proactively address emerging threats both internally within the
organisation and externally, through regular engagement with internet and
technology providers and through industry forums.
· Maintenance of detailed and robust Business Continuity and
Disaster Recovery Plans, including full data replication at an independent
recovery centre, which can be invoked when required.
· Frequent and robust testing of business continuity and disaster
recovery arrangements.
· Periodic independent third-party systems penetration testing and
review of controls.
· Horizon scanning to identify and assess supervisory initiatives
advocating and promoting good practice in cyber resilience and associated
industry developments.
Corporate Sustainability Risk: The importance of integration of sustainability issues into the Group's core
strategies and business plans is recognised by the Board, requiring
value-driven, adaptive practices. These practices must continuously enhance
Arising from the risk of failing to integrate environmental, social and the Group's corporate governance arrangements, as sustainability related
governance considerations into the Group's strategic and business planning issues evolve, and demonstrate to clients, investors, regulators, and wider
activities, or to proactively review, understand and act on the challenges and stakeholder groups that sustainability and resilience risks and opportunities
opportunities presented. are understood.
How we manage the risk:
· Actively building sustainability considerations into strategy
development and business planning processes through structured analysis,
formal assessment mechanisms and cross-functional collaboration.
· Factoring emerging sustainability risk issues into key
decision-making and understanding the impacts for the tools and methodologies
currently used to manage risk, including governance structures, risk
ownership, risk and control self-assessment principles, regulatory
developments, third party service provisions and effective reporting.
· Development of adaptation plans, which embrace forward-looking
analysis and support strategic decision-making, with consideration of relevant
business planning, operations, underwriting and investment activities to
contribute to a sustainable transition to net-zero targets and provide
effective mitigation of climate change related risks.
· Detailed analysis of climate and other ESG risks, which could
cause macroeconomic stresses in future, including impacts to markets, interest
rates, inflation and exchange rates.
· Developing and updating relevant components in relation to the
sustainability risk domain, including policies, procedures, risk indicators,
management data and stress testing.
· 'In flight' initiatives addressing cultural alignment and
structural resilience encompass core ESG considerations.
Employee Engagement and Talent Risk: 'Talent risk' continues to grow in prominence on the operational risk agenda
at industry level with persistent challenges linked to attracting and
retaining employees across all financial services sectors. The Group's
Arising from any failure to drive and support the right corporate culture and strategy has core dependencies on attracting and retaining experienced and
attract, develop, engage and retain key personnel. high-performing management and employees and building a strong and sustainable
culture, driven by our purpose, our leadership, our performance management
regime and our governance principles and objectives. The knowledge, skills,
attitudes and behaviours of our employees, and the success with which these
attributes shape and define our culture, are central to our success.
How we manage the risk:
· Significant investment in initiatives to address and support
cultural change and development, shape strategy and inform tactical solutions.
· Continuation of our 'Culture Programme' with clearly defined
areas of focus under three core pillars, those being:
- High Performance Culture
- Learning Culture
- Environment & Wellbeing
These remain in active progress led by the Executive Committee with oversight
by the Board.
By order of the Board
Thomas Morfett Ollie Byrne
Chief Executive Officer Chief Financial Officer
5 March 2025
Condensed Consolidated Statement of Comprehensive Income
Year
Six months ended ended
31 December 31 December 30 June
2024 2023 2024
Notes £m £m £m
Fees and commissions 6 23.7 23.9 48.8
Investment and other operating income 29.8 44.3 119.5
Other operating income - 0.6 0.8
53.5 68.8 169.1
Change in provisions for investment contract liabilities (27.3) (41.7) (114.4)
Origination costs (7.3) (8.3) (16.1)
Administrative and other expenses 7 (18.4) (14.7) (33.3)
(53.0) (64.7) (163.8)
Profit on ordinary activities before taxation 0.5 4.1 5.3
Taxation on profit on ordinary activities 8 (0.1) (0.1) (0.1)
Profit and total comprehensive income for
the period after taxation 0.4 4.0 5.2
Earnings Per Share
Year
Six months ended ended
31 December 31 December 30 June
2024 2023 2024
Note (p) (p) (p)
Basic 9 0.3 2.9 3.8
Diluted 9 0.3 2.9 3.8
The notes on pages 30 to 49 form an integral part of these condensed
consolidated financial statements.
Condensed Consolidated Statement of Changes in Equity
Share Other Retained
Capital reserves earnings Total
Note £m £m £m £m
Shareholders' equity at 1 July 2023 68.8 (48.5) 1.5 21.8
Profit and total comprehensive income
for the period after taxation - - 4.0 4.0
Transactions with owners
Dividends 10 - - (3.6) (3.6)
Reserve for own shares within EBT - (0.2) - (0.2)
Shareholders' equity at 31 December 2023 68.8 (48.7) 1.9 22.0
Share Other Retained
Capital reserves earnings Total
Note £m £m £m £m
Shareholders' equity at 1 July 2024 68.8 (48.6) 0.6 20.8
Profit and total comprehensive income
for the period after taxation - - 0.4 0.4
Transactions with owners
Dividends 10 - - (3.7) (3.7)
Reserve for own shares within EBT - 0.1 - 0.1
Shareholders' equity at 31 December 2024 68.8 (48.5) (2.7) 17.6
The notes on pages 30 to 49 form an integral part of these condensed
consolidated financial statements.
Condensed Consolidated Balance Sheet
31 December 31 December 30 June
2024 2023 2024
Notes £m £m £m
Assets
Intangible assets 11 22.4 22.3 23.2
Property, plant and equipment 11 2.8 2.6 2.6
Deferred origination costs 12 110.0 114.5 112.1
Financial investments
Measured at fair value:
Equity securities 72.4 58.5 78.9
Collective investment schemes 941.4 923.6 937.5
Fixed income securities 84.2 66.9 70.6
1,098.0 1,049.0 1,087.0
Measured at amortised cost:
Deposits and money market funds 81.2 84.5 88.2
Other receivables 10.1 5.0 6.3
Cash and cash equivalents 46.3 45.8 47.9
Total assets 1,370.8 1,323.7 1,367.3
Liabilities
Financial liabilities under investment contracts 13 1,153.0 1,106.0 1,150.9
Deferred income 14 139.0 142.2 140.2
Amounts due to investment contract holders 46.1 39.2 39.3
Other payables 15 14.5 14.2 15.6
Provisions 16 0.6 0.1 0.5
Total liabilities 1,353.2 1,301.7 1,346.5
Net assets 17.6 22.0 20.8
Shareholders' equity
Called up share capital 17 68.8 68.8 68.8
Other reserves 18 (48.5) (48.7) (48.6)
Retained earnings (2.7) 1.9 0.6
Total shareholders' equity 17.6 22.0 20.8
The notes on pages 30 to 49 form an integral part of these condensed
consolidated financial statements.
The condensed consolidated financial statements on pages 26 to 29 were
approved by the Board on 5 March 2025 and signed on its behalf by:
Thomas
Morfett
Ollie Byrne
Chief Executive Officer
Chief Financial Officer
Condensed Consolidated Cash Flow Statement
Year ended
Six months ended
31 December 31 December 30 June
2024 2023 2024
£m £m £m
Cash flow from operating activities
Profit before tax for the period 0.5 4.1 5.3
Adjustments for:
Depreciation 1.0 0.2 1.0
Dividends receivable (2.8) (2.6) (5.4)
Dividends received 2.8 2.6 5.4
Interest receivable (2.7) (2.2) (4.7)
Interest received 2.4 2.2 4.2
Movement in Share Based Payment reserve (0.1) - -
Foreign exchange losses / (gains) 0.1 (0.1) -
Changes in operating assets and liabilities
(Increase) in debtors (3.4) (0.1) (0.9)
Decrease in deferred origination costs 2.1 3.4 5.8
(Decrease) in deferred income (1.2) (2.6) (4.5)
Increase in creditors 5.8 3.1 4.9
Decrease / (increase) in financial investments 1.9 (12.5) (54.2)
Increase in financial liabilities 0.2 4.4 49.4
Cash flow from operations 6.6 (0.1) 6.3
Corporation tax paid - - (0.1)
Net cash from operations after taxation 6.6 (0.1) 6.2
Cash flows from investing activities
Investment in intangible assets and property, plant & equipment - (2.4) (3.7)
Proceeds from sale of investments - - (0.2)
Purchase of investments (4.0) - -
Purchase of own shares (0.2) (0.3) (0.2)
Cash flows used in investing activities (4.2) (2.7) (4.1)
Cash flows from financing activities
Dividends paid (3.7) (3.6) (6.1)
Principal elements of lease liabilities (0.1) (0.1) (0.2)
Cash flows used in financing activities (3.8) (3.7) (6.3)
Net (decrease) in cash and cash
Equivalents (1.4) (6.5) (4.2)
Cash and cash equivalents at beginning of period 47.9 52.2 52.2
Effect of exchange rate changes (0.2) 0.1 (0.1)
Cash and cash equivalents at end of period 46.3 45.8 47.9
The notes on pages 30 to 49 form an integral part of these condensed
consolidated financial statements.
Notes to the Condensed Consolidated Financial Statements
1 General information
Hansard Global plc ("the Company") is a limited liability company,
incorporated in the Isle of Man under the Isle of Man Companies Act 1931 -
2004, whose shares are publicly traded. The principal activity of the Company
is to act as the holding company of the Hansard Group ("the Group") of
companies. The activities of the principal operating wholly owned subsidiaries
include the transaction of life assurance business and related activities.
Hansard Europe was closed to new business with effect from 30 June 2013. The
principal subsidiaries of the company are as follows:
Company
name
Incorporated Activity
Hansard International
Limited Isle of
Man Life Assurance
Hansard Worldwide
Limited The
Bahamas Life Assurance
Hansard Europe Designated Activity Company
Ireland Life Assurance
Hansard Administration Services Limited Isle of
Man Administration Services
Hansard Development Services Limited Isle of
Man Marketing and
Development Services
The registered office of the Company is 55 Athol Street, Douglas, Isle of Man,
IM99 1QL.
The Company has its primary listing on the London Stock Exchange.
These condensed consolidated interim financial statements are unaudited and do
not include all of the information required for a complete set of financial
statements prepared in accordance with IFRS Standards and the Isle of Man
Companies Acts 1931 - 2004. Selected explanatory notes are included to explain
events and transactions that are significant to an understanding of the
changes in the Group's financial position and performance since the last
annual financial statements. The condensed consolidated interim financial
statements were approved by the Board of Directors on 5 March 2025.
The Board of Directors approved the Group's statutory financial statements for
the year ended 30 June 2024 on 25 September 2024. The report of the
independent auditor on those financial statements was unmodified and did not
contain an emphasis of matter paragraph.
2 Basis of presentation
The consolidated financial statements have been prepared in accordance with
with the Disclosure and Transparency Rules of the Financial Conduct Authority
("DTR") and with IAS 34 "Interim Financial Reporting" as adopted by the United
Kingdom ("UK"). The financial statements have been prepared under the
historical cost convention as modified by the revaluation of financial
investments and financial liabilities at fair value through profit or loss.
The Group has applied all International Financial Reporting Standards adopted
by the United Kingdom and effective at 31 December 2024.
The Group underwrites an immaterial amount of insurance business. Management
has undertaken an assessment of the impact of accounting for this business as
investment business rather than insurance business and concluded that this
would not have a material impact on the financial statements. This assessment
has been refreshed to consider the impact of IFRS 17 in conjunction with new
products that have been brought to market, and management have not changed
their conclusion that accounting for the business as investment business would
not have a material impact on the financial statements. Management will keep
this assessment under review and should the outcome change in future the Group
accounting treatment will be reassessed. As a result, IFRS17 has not been
applied to these financial statements.
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the reporting year. The estimates and associated assumptions
are based on historical experience and various other factors that are believed
to be reasonable under the circumstances. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the year in which the
estimate is revised if the revision affects only that year or in the year of
the revision and future years if the revision affects both current and future
years.
The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated financial
statements, are disclosed in note 2.
Except where otherwise stated, the financial statements are presented in
pounds sterling, the functional currency of the Company, rounded to the
nearest one hundred thousand pounds.
The following new standards, amendments and interpretations are in issue but
not yet effective and have not been early adopted by the Group and are not
expected to have a significant impact;
· Amendments to the classification and measurement of financial
instruments (amendments to IFRS 7 and IFRS 9) - effective from 1 January 2026
· Presentation and disclosure in financial statements (IFRS18) -
effective from 1 January 2027
· Subsidiaries without public accountability (IFRS 19) -
effective from 1 January 2027
IFRS 18 will replace IAS 1 Presentation of Financial Statements and applies
for annual reporting periods beginning on or after 1 January 2027 and
introduces a number of new reporting requirements. The Group is still in the
process of assessing the impact of the new standard, particularly with respect
to the structure of the Group's statement of comprehensive income, the
statement of cash flows and the additional disclosures required for management
defined performance measures. The Group is also assessing the impact on how
information is grouped in the financial statements, including for items
currently labelled as 'other".
There are no other standards, amendments or interpretations to existing
standards that are not yet effective, that would have a material impact on the
Group's reported results.
Going Concern
As shown within the Business and Financial Review, the Group's capital
position is sufficient and in excess of regulatory requirements. The long-term
nature of the Group's business results in considerable recurring cash inflows
arising from existing business. The Directors believe that the Group is well
placed to manage its business risks successfully.
The Directors are satisfied that the Company and the Group have adequate
resources to continue to operate as a going concern for the foreseeable future
and have prepared the condensed consolidated financial statements on that
basis. The Directors are cognisant of the reduction in profit before tax
recorded in the period and are satisfied that this represents a short-term
decline as set out in the Future Prospects section of the 2024 Group report.
In making this statement, the Directors have reviewed financial forecasts that
show the Group continuing to generate profit over the next 12 months and that
the Group has sufficient cash reserves to enable it to meet its obligations as
they fall due. Through the ORSA process, the Directors have reviewed a number
of scenarios prepared by the Actuarial function that demonstrate resilience to
a number of key stresses, and whilst reverse stress scenarios show multiple
adverse events coming together result in solvency coverage falling below
regulatory minimums, these are considered highly remote. Recovery actions are
available to the Group in the event that the strategic solvency target is
breached.
Although the Directors expect the acquisition of new business will continue to
be challenging, the Group has seen a continued increase in PVNBP as set out in
the Business and Financial Review. The impact of this however is not
immediate to the Group's profit and cash flows and therefore allows for longer
term adjustments to operations and the cost base. Long periods of lower new
business or indeed lower AuA would be addressed by reducing the cost base and
where necessary, the dividend paid.
The following factors are considered as supportive to the Group's resilience
to business and external environment challenges:
· The Group's business model focuses on long term savings products,
a majority of which are regular premium paying products which continue to
receive cash inflows regardless of the amount of new business sold.
· The Group earns approximately a third of its revenues from
asset-based income which is not immediately dependent on sourcing new
business. Initial fees in respect of new business are broadly offset by
initial commissions, limiting the impact of any reduction in new business.
· New business channels are geographically dispersed and therefore
less exposed to specific regional challenges.
· The largest expense associated with new business is commission
expenditure which reduces directly in line with reduced sales.
· The Group has, and continues to the date of this report to have,
a strong capital position with significant levels of liquidity and cash (as
outlined in the Business and Financial Review).
· The business continues to demonstrate operational resilience in being
able to operate remotely from its offices where required without any material
impact to processing and servicing levels.
· The Group places the majority its shareholder assets into
conservative, highly-liquid, highly rated bank deposits and money market
funds. These are typically not subject to price fluctuation and protect the
Group's assets against potential market volatility.
· The Group has no borrowing.
3 Principal accounting policies
As required by the Disclosure and Transparency Rules of the Financial Conduct
Authority and IAS 34, this condensed set of consolidated financial statements
has been prepared applying the accounting policies and standards that were
applied, and the critical accounting estimates and judgements in applying
them, in the preparation of the Group's published consolidated financial
statements for the year ended 30 June 2024. The published consolidated
financial statements for the year ended 30 June 2024 can be accessed on the
Company's website: www.hansard.com (http://www.hansard.com) .
4 Financial risk management
Risk management objectives and risk policies
The Group's objective in the management of financial risk is to minimise,
where practicable, its exposure to such risk, except when necessary to support
other objectives. The Group seeks to manage risk through the operation of
unit-linked business whereby the contract holder bears the financial risk. In
addition, shareholder assets are invested in highly rated investments.
Overall responsibility for the management of the Group's exposure to risk is
vested in the Board. To support it in this role, an Enterprise Risk Management
("ERM") framework is in place comprising risk identification, risk assessment,
control and reporting processes. Information concerning the operation of the
ERM framework to manage financial and other risks is contained within the
Report and Accounts for the year ended 30 June 2024, and particularly in note
3 thereto, "Financial Risk Management".
The main significant financial risks to which the Group is exposed are set out
below. For each category of risk, the Group determines its risk appetite and
sets its investment, treasury, and associated policies accordingly.
4.1 Market risk
This is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market prices, analysed
between price, interest rate and currency risk. The Group adopts a risk averse
approach to market risk, with a stated policy of not actively pursuing or
accepting market risk except where necessary to support other objectives.
However, the Group accepts the risk that the fall in equity or other asset
values, whether as a result of price falls or strengthening of sterling
against the currencies in which contract holder assets are denominated, will
reduce the level of annual management charge income derived from such contract
holder assets and the risk of lower future profits.
Sensitivity analysis to market risk
The Group's business is unit-linked and the direct associated market risk is
therefore borne by contract holders (although there is a secondary impact as
shareholder income is dependent upon the fair value of contract holder
assets). Other financial assets and liabilities held outside of contract
holder unitised funds primarily consist of units in money market funds, cash
and cash equivalents, and other assets and liabilities. Cash held in unitised
money market funds and at bank is valued at par and is unaffected by movements
in interest rates. Other assets and liabilities are similarly unaffected by
market movements.
As a result of these combined factors, the Group's financial assets and
liabilities held outside unitised funds are not materially subject to market
risk, and movements at the reporting date in interest rates and equity values
have an immaterial impact on the Group's profit after tax and equity. Future
revenues from annual management charges may be affected by movements in
interest rates, foreign currencies and equity values. The Group does not
control the asset selection strategy as assets are chosen by the contract
holders.
(a) Price risk
Unit linked funds are exposed to securities price risk as the investments held
are subject to prices in the future which are uncertain. The fair value of
financial assets (designated at fair value through profit or loss) exposed to
price risk as at 31 December 2024 was £1,096.2m (31 December 2023:
£1,049.0m). In the event that investment income is affected by price risk
then there will be an equal and opposite impact on the value of the changes in
provisions for investment contract liabilities in the same accounting period.
The impact on the profit or loss before taxation in a given financial year is
negligible.
An overall change in the market value of the unit-linked funds would affect
the annual management charges accruing to the Group since these charges, which
are typically 1% per annum, are based on the market value of contract holder
assets under administration. The approximate annual impact on the Group's
profits and equity of a 10% change in fund values, either as a result of
price, interest rate or currency fluctuations, is £1.5m (H1 2024: £1.5m).
(b) Interest rate risk
Interest rate risk is the risk that the Group is exposed to lower returns or
loss as a direct or indirect result of fluctuations in the value of, or income
from, specific assets arising from changes in underlying interest rates.
The Group is primarily exposed to interest rate risk on the balances that it
holds with credit institutions and in money market funds.
Taking into account the proportion of Group funds held on longer-term,
fixed-rate deposits, a change of 1% p.a. in interest rates will result in an
increase or decrease of approximately £0.6m (H1 2024: £0.6m) in the Group's
annual investment income and equity.
A summary of the Group's liquid assets at the balance sheet date is set out in
note 4.2.
(c) Currency risk
Currency risk is the risk that the Group is exposed to higher or lower returns
as a direct or indirect result of fluctuations in the value of, or income
from, specific assets and liabilities arising from changes in underlying
exchange rates.
(c) (i) Group foreign currency exposures
The Group is exposed to currency risk on the foreign currency denominated bank
balances, contract fees receivable and other liquid assets that it holds to
the extent that they do not match liabilities in those currencies. The impact
of currency risk is minimised by frequent repatriation of excess foreign
currency funds to sterling. The Group does not hedge foreign currency cash
flows as a matter of course but may take advantage of historically strong or
weak sterling exchange rates to do so where appropriate.
At the balance sheet date, the Group had exposures in the following
currencies:
31 December
2024 2024 2024 2023 2023 2023
US$m €m ¥m US$m €m ¥m
Gross assets 28.4 14.7 438.4 20.8 13.2 286.9
Matching currency liabilities (25.2) (15.4) (571.9) (21.1) (11.9) (386.2)
Uncovered currency
Exposures 3.2 (0.7) (133.5) (0.3) 1.3 (99.3)
Sterling equivalent of
exposures (£m) 2.5 (0.6) (0.7) (0.2) 1.2 (0.6)
The approximate effect of a 5% change in the value of US dollars to sterling
is £0.1m (H1 2024: less than £0.1m); in the value of the euro to sterling is
less than £0.1m (H1 2024: £0.1m); and in the value of the yen to sterling is
less than £0.1m (H1 2024: less than £0.1m).
(c) (ii) Financial investments by currency
Certain fees and commissions are earned in currencies other than sterling,
based on the value of financial investments held in those currencies from time
to time. The sensitivity of the Group to the currency risk inherent in
investments held to cover financial liabilities under investment contracts is
incorporated within the analysis set out in (a) above.
At the balance sheet date, the analysis of financial investments by currency
denomination is as follows; US dollars: 74% (31 December 2023: 71%); sterling:
19% (31 December 2023: 19%); euro: 6% (31 December 2023: 8%); other: 1% (31
December 2023: 2%).
4.2 Credit risk
Credit risk is the risk that the Group is exposed to lower returns or loss if
another party fails to perform its financial obligations to the Group. The
Group has adopted a risk averse approach to such risk and has a stated policy
of not actively pursuing or accepting credit risk except when necessary to
support other objectives.
The clearing and custody operations for the Group's security transactions are
mainly concentrated with one broker, namely Capital International Limited, a
member of the London Stock Exchange. At the balance sheet date, substantially
all contract holder cash and cash equivalents, balances due from broker and
financial investments are placed in custody with Capital International
Limited. These operations are detailed in a formal contract that incorporates
notice periods and a full exit management plan. Delivery of services under the
contract is monitored by a dedicated relationship manager against a documented
Service Level Agreement and Key Performance Indicators.
The Group has an exposure to credit risk in relation to its deposits with
credit institutions and its investments in unitised money market funds. To
manage these risks; deposits are made, in accordance with established policy,
with credit institutions having a short-term rating of at least F1 or P1 from
Fitch IBCA and Moody's respectively and a long-term rating of at least A or A3
respectively. Investments in unitised money market funds are made only where
such fund is AAA rated. Additionally maximum counterparty exposure limits are
set both at an individual subsidiary company level and on a Group-wide basis.
These assets are considered to have a high degree of credit worthiness and no
assets of a lower credit worthiness are held. The following table sets out
information about the credit quality of the Group's deposits with credit
institutions and its investments in unitised money market funds.
31 December 30 June
2024 2023 2024
£m £m £m
Deposits with credit institutions and investments in unitised money market
funds
(Based on Standards & Poor's ratings)
AAA 28.6 24.2 29.3
AA- to AA+ 1.6 3.7 1.6
A- to A+ 14.0 17.9 16.1
BBB to BBB- - - -
Total deposits 44.2 45.8 47.0
AA- to AA+ 0.3 0.3 -
A- To A+ 16.8 20.4 18.0
BBB to BBB- - - -
Cash at bank 17.1 20.7 18.0
Group cash and deposits 61.3 66.5 65.0
Credit risk for financial assets held at amortised cost is recognised using an
expected credit loss model. The model splits financial assets into those which
are performing, underperforming and non-performing based on changes in credit
quality since initial recognition. At initial recognition financial assets are
considered to be performing. They become underperforming where there has been
a significant increase in credit risk since initial recognition, and
non-performing when there is objective evidence of impairment. Twelve months
of expected credit losses are recognised in the statement of comprehensive
income and netted against the financial asset in the statement of financial
position for all performing financial assets, with lifetime expected credit
losses recognised for underperforming and non-performing financial assets.
Trade receivables are designated as having no significant financing component.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses for trade receivables by using a lifetime expected loss allowance.
Expected credit losses are based on the historic levels of loss experienced
for the relevant financial assets, with due consideration given to forward
looking information. The group expected credit loss charged in the period is
less than £0.1m (H1 2024: less than £0.1m).
There have been no changes in the assets in the period ended 31 December 2024
attributable to changes in credit risk (31 December 2023: nil).
At the balance sheet date, an analysis of the Group's shareholder cash
balances was as follows:
31 December 30 June
2024 2023 2024
£m £m £m
Longer term deposits with credit institutions 15.0 20.7 17.1
Cash and cash equivalents under IFRS 46.3 45.8 47.9
61.3 66.5 65.0
4.3 Liquidity risk
Liquidity risk is the risk that the Group, though solvent, does not have
sufficient financial resources to enable it to meet its obligations as they
fall due, or can only secure them at excessive cost.
The Group's objective is to ensure that it has sufficient liquidity over short
(up to one year) and medium-term time horizons to meet the needs of the
business. This includes liquidity to cover, amongst other things, new business
costs, planned strategic activities, servicing of equity capital as well as
working capital to fund day-to-day cash flow requirements.
Liquidity risk is principally managed in the following ways:
· Assets of a suitable marketability are held to meet contract
holder liabilities as they fall due.
· Forecasts are prepared regularly to predict required liquidity
levels over both the short and medium term.
The Group's exposure to liquidity risk is considered to be low since it
maintains a high level of liquid assets to meet its liabilities.
4.4 Insurance risk
Insurance risk is the risk of loss arising from actual experience being
different than that assumed when an insurance product was designed and priced.
For the Group, the key insurance risks are lapse risk, expense risk and
mortality risk. However, the size of insurance risk is not deemed to be
materially significant. From an accounting perspective all contracts have been
classified as investment contracts.
4.4.1 Lapse risk
A key risk for investment contracts is policyholder behaviour risk - in
particular the risk that contracts are surrendered, or significant cash
withdrawals are made before sufficient fees have been collected to cover
up-front commissions paid by the Group. The risk is mitigated by charging
penalties on the early surrender of contracts.
4.5 Fair value of financial assets and liabilities
The Group closely monitors the valuation of assets in markets that have become
less liquid. Determining whether a market is active requires the exercise of
judgement and is determined based upon the facts and circumstances of the
market for the instrument being measured. Where the Directors determine that
there is no active market for a particular financial instrument, for example
where a particular collective investment scheme is suspended from trading,
fair value is assessed using valuation techniques based on available, relevant
information and an appraisal of all associated risks. When a collective
investment scheme recommences regular trading, the value would be transferred
back to Level 1. This process requires the exercise of significant judgement
on the part of the Directors.
Due to the linked nature of the contracts administered by the Group's
undertakings, any change in the value of financial assets held to cover
financial liabilities under those contracts will result in an equal and
opposite change in the value of contract liabilities. The separate effect on
financial assets and financial liabilities is included in investment income
and investment contract benefits, respectively, in the condensed consolidated
statement of comprehensive income.
IFRS 13 requires the Group to classify fair value measurements into a fair
value hierarchy by reference to the observability and significance of the
inputs used in measuring that fair value. The hierarchy is as follows:
· Level 1: fair value is determined using quoted prices
(unadjusted) in active markets for identical assets.
· Level 2: fair value is determined using inputs other than quoted
prices included within Level 1 that are observable for the asset either
directly (i.e., as prices) or indirectly (i.e., derived from prices).
· Level 3: fair value is determined using inputs for the asset that
are not based on observable market data (unobservable inputs).
The following tables analyse the Group's financial assets and liabilities at
fair value through profit or loss, at 31 December 2024:
Level 1 Level 2 Level 3 Total
Financial assets at fair value through profit or loss £m £m £m £m
Equity securities 71.6 - 0.8 72.4
Collective investment schemes 924.1 13.0 4.3 941.4
Fixed income securities, bonds and structured notes
5.5 11.4 67.3 84.2
Total financial assets at fair value through profit and loss 1,001.2 24.4 72.4 1,098.0
All other financial assets and liabilities are designated as held at amortised
cost which approximates to fair value.
Level 1 Level 2 Level 3 Total
£m £m £m £m
Deposits and money market funds 81.2 81.2
Total financial assets at fair value through
profit or loss 1,082.4 24.4 72.4 1,179.2
Financial liabilities at fair value
through profit or loss - 1,153.0 - 1,153.0
Financial liabilities at fair value through profit or loss are classified as
level 2 on the basis that they relate to policies investing in financial
assets at fair value through profit or loss.
The following tables analyse the Group's financial assets and liabilities at
fair value through profit or loss, at 30 June 2024:
Level 1 Level 2 Level 3 Total
Financial assets at fair value through profit or loss £m £m £m £m
Equity securities 75.7 3.2 - 78.9
Collective investment schemes 917.8 16.7 3.0 937.5
Fixed income securities, bonds and structured notes
0.8 11.0 58.8 70.6
Total financial assets at fair value through profit and loss 994.3 30.9 61.8 1,087.0
All other financial assets and liabilities are designated as held at amortised
cost which approximates to fair value.
Level 1 Level 2 Level 3 Total
£m £m £m £m
Deposit and money market funds 88.2 - - 88.2
Total financial assets at fair value through profit or loss 1,082.5 30.9 61.8 1,175.2
Financial liabilities at fair value through profit or loss - 1,150.9 - 1,150.9
Valuation techniques and significant unobservable inputs
The following tables show the valuation techniques used in measuring Level 2
and Level 3 fair values for financial instruments in the statement of
financial position, as well as the significant unobservable inputs used.
Type Valuation technique Significant unobservable input Sensitivity to changes in unobservable inputs
Suspended assets £4.3m (30 June 2024: £3.0m) Latest available information including or such as net asset values (NAV) or Discount factor (5%) and NAV. If the NAV was higher/lower, the fair value would be higher/lower.
other communication received
If the discount factor was higher/lower, the fair value would be lower/higher.
Bonds and structured notes Market comparison / discounted cash flow: The fair value is estimated Level 2: Not applicable Level 2: Not applicable
considering:
Level 2: £11.4m (30 June 2024: £11.0m)
Level 3: Underlying volatility. Level 3: Significant increases / decreases in this input in isolation would
Level 3: £67.0m (30 June 2024: £58.8m) (i) current or recent quoted prices for identical securities in markets that
result in higher or lower fair value.
are not active; and
(ii) a net present value calculated using discount rates which are determined
with reference to observable market transactions in instruments with
substantially the same terms and characteristics including credit quality, the
remaining term to repayments of the principal and the currency in which the
payments are made.
Level 3 sensitivity to changes in unobservable measurements
For financial assets assessed as Level 3, based on its review of the prices
used, the Company believes that any reasonable change to the unobservable
inputs used to measure fair value would not result in a significantly higher
or lower fair value measurement at year end, and therefore would not have a
material impact on its reported results.
Significant unobservable inputs are developed as follows:
Underlying Volatility
In the absence of implied volatility until the maturity and moneyness of the
instrument, the best estimate is the use of extrapolated implied volatility or
historical volatility. The inputs used are derived against other independent
valuation sources and the reasonableness of the assumptions is evaluated as
part of the process.
A reconciliation between opening and closing balances of Level 3 assets is
presented in the table below:
31 December 30 June
2024 2023 2024
£m £m £m
Opening balance 61.8 57.4 57.4
Unrealised gains / (losses) 3.5 (5.6) (2.3)
Transfers into level 3 1.5 0.1 1.1
Transfers out of level 3 (0.9) - -
Purchases 6.5 9.3 5.6
Closing balance 72.4 61.2 61.8
During the period under review, £1.5m of assets were transferred into Level
3, reflecting that the value of these assets was no longer based on observable
market data or inputs. Separately £0.9m of assets were transferred out of
Level 3 where they were again able to be valued based on observable market
data or inputs. Unrealised losses include additional fair value impairments
to a range of assets in liquidation which have resulted in £nil of bad debt
provisions being made to fees and other receivables as shown in note 7.
Within Investment and other operating income, the Group has recognised gains
of £3.2m attributable to Level 3 assets noted above. These assets are classed
as financial investments held to cover liabilities under investment contracts
(note 13).
5 Segmental information
Disclosure of operating segments in these condensed consolidated financial
statements is consistent with reports provided to the Chief Operating Decision
Maker ("CODM") which, in the case of the Group, has been identified as the
Executive Committee of Hansard Global plc.
In the opinion of the CODM, the Group operates in a single reportable segment,
that of the distribution and servicing of long-term investment products. New
business development, distribution and associated activities in relation to
the Republic of Ireland ceased with effect from 30 June 2013. All other
activities of the Group are continuing.
The Group's Executive Committee uses two principal measures when appraising
the performance of the business: net issued compensation credit ("NICC")
(weighted where appropriate by product line) and expenses. NICC is a measure
of the value of new in-force business and top-ups on existing single premium
contracts. NICC is the total amount of basic initial commission payable to
intermediaries for business sold in a period and is calculated on each piece
of new business. It excludes override commission paid to intermediaries over
and above the basic level of commission.
The following table analyses NICC geographically and reconciles NICC to direct
origination costs during the period as set out in section 5 of the Business
and Financial Review.
Six months ended Year ended
31 December 30 June
2024 2023 2023
£m £m £m
Middle East and Africa 1.9 1.1 1.7
Latin America 1.3 0.9 2.1
Rest of World - 0.4 1.7
Far East 0.2 0.1 0.1
Net issued compensation credit 3.4 2.5 5.6
Other commission costs paid to third parties 1.5 1.5 3.2
Enhanced unit allocations 0.2 0.4 0.9
Direct origination costs during the period 5.1 4.4 9.7
Revenues and expenses allocated to geographical locations contained in
sections 5.1 to 5.4 below, reflect the revenues and expenses generated in or
incurred by the legal entities in those locations.
5.1 Geographical analysis of fees and commissions by origin
Six months ended Year ended
31 December 30 June
2024 2023 2024
£m £m £m
Isle of Man 22.4 22.9 46.0
Republic of Ireland 1.0 0.7 2.2
The Bahamas * 0.3 0.3 0.6
23.7 23.9 48.8
* Hansard Worldwide, which is based in the Bahamas, fully reinsures its
business to Hansard International. All external fees and commissions for
Hansard Worldwide are therefore presented within the Isle of Man category.
Fees shown in respect of Hansard Worldwide represent fees received from
Hansard International.
5.2 Geographical analysis of profit / (loss) before taxation
Six months ended Year ended
31 December 30 June
2024 2023 2024
£m £m £m
Isle of Man 1.1 4.3 6.5
Republic of Ireland (0.8) (0.4) (1.6)
The Bahamas 0.2 0.2 0.4
0.5 4.1 5.3
5.3 Geographical analysis of gross assets
31 December 30 June
2024 2023 2024
£m £m £m
Isle of Man * 1,290.4 1,235.7 1,283.1
Republic of Ireland 78.4 85.7 82.5
The Bahamas 2.0 2.3 1.7
1,370.8 1,323.7 1,367.3
* Includes assets held in the Isle of Man in connection with policies
written in The Bahamas. As at 31 December 2024 these amounted to £278.2m (31
December 2023: £203.2m).
5.4 Geographical analysis of gross liabilities
31 December 30 June
2024 2023 2024
£m £m £m
Isle of Man 1,007.0 1,024.0 1,033.8
Republic of Ireland 67.1 72.4 70.2
The Bahamas 279.1 205.3 242.5
1,353.2 1,301.7 1,346.5
6 Fees and commissions
Fees are charged to the contract holders of investment contracts for contract
administration services, investment management services, payment of benefits
and other services related to the administration of investment contracts. Fees
may be chargeable on either a fixed fee basis, a fee per transaction or as a
percentage of assets under administration. Fees are recognised as revenue as
the services are provided. Initial fees that exceed the level of recurring
fees and relate to the future provision of services are deferred in the
balance sheet and amortised on a straight-line basis over the life of the
relevant contract. These fees are accounted for on the issue of a contract and
on receipt of incremental premiums on existing single premium contracts.
Regular fees charged to contracts are recognised on a straight-line basis over
the period in which the service is provided. Transactional fees are recorded
when the required action is complete.
Commissions receivable arise principally from fund houses with which
investments are held. Commissions are recognised on an accruals basis in
accordance with the relevant agreement.
Six months ended Year ended
31 December 30 June
2024 2023 2024
£m £m £m
Contract fee income 14.0 15.2 30.6
Fund management fees 7.2 6.3 13.4
Commission receivable 2.5 2.4 4.8
23.7 23.9 48.8
7 Administrative and other expenses
Included in Administrative and other expenses are the following:
Six months ended Year ended
31 December 30 June
2024 2023 2024
£m £m £m
Auditors' remuneration
- Fees payable to the Company's auditor for the audit of the Company's 0.1 0.1 0.8
annual accounts
- Fees payable for the audit of the Company's subsidiaries pursuant to 0.2 0.3 0.1
legislation
- Other services provided to the Group - - -
Employee costs 6.6 5.5 11.5
Directors' fees 0.2 0.2 0.4
Fund management fees 2.5 2.5 5.1
Renewal and other commission 0.4 0.4 0.9
Professional and other fees 1.7 1.8 4.8
Litigation defence and settlement costs 1.5 0.7 2.2
Credit loss allowance (0.1) - -
Licences and maintenance fees 2.7 1.9 4.1
Insurance costs 0.4 0.4 0.9
Depreciation of property, plant and equipment 0.2 0.2 0.5
Amortisation of intangible assets 0.8 - 0.5
Communications 0.1 0.1 0.2
8 Taxation
Taxation is based on profit and income for the period as determined with
reference to the relevant tax legislation in the countries in which the
Company and its subsidiaries operate. Tax payable is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet
date. Tax is recognised in the consolidated statement of comprehensive income
except to the extent that it relates to items recognised in equity. Tax on
items relating to equity is recognised in equity.
The corporation tax expense for the Group for H1 2025 was £0.1m on a rounded
basis (H1 2024: £0.1m). Corporation tax is charged on any profits arising at
the following rates depending on location of the company or branch:
Isle of Man 0% (2023: 0%)
Republic of Ireland 12.5% (2023: 12.5%)
Japan 23.2% (2023: 23.2%)
Labuan 24% (2023: 24%)
The Bahamas 0% (2023: 0%)
No deferred tax asset is currently being recorded in relation to losses
arising in Hansard Europe.
There is no material difference between the current tax charge in the
consolidated statement of comprehensive income and the current tax charge that
would result from applying standard rates of tax to the profit before tax.
The OECD's Pillar II global minimum tax, based on the Global Anti-Base Erosion
(GloBE) Model Rules, is not expected to have an impact on the Group, as the
Group's total revenue is less than €750m.
9 Earnings per share
Six months ended Year ended
31 December 30 June
2024 2023 2024
Profit after tax (£m) 0.4 4.0 5.2
Weighted average number of shares in issue (millions) 137.6 137.6 137.6
Earnings per share in pence 0.3p 2.9p 3.8p
The Directors believe that there is no material difference between the
weighted average number of shares in issue for the purposes of calculating
either basic or diluted earnings per share. Earnings under either measure are
0.3 pence per share (H1 2024: 2.9p).
10 Dividends
Interim dividends payable to shareholders are recognised in the year in which
the dividends are paid. Final dividends payable are recognised as liabilities
when approved by the shareholders at the annual general meeting.
The following dividends have been paid by the Group during the
period:
Year ended
Six months ended 31 December 30 June
2024 2023 2024
Per share Total Per share Total Per share Total
p £m p £m p £m
Final dividend paid 2.65 3.70 2.65 3.60 2.65 3.60
Interim dividend paid - - - - 1.80 2.50
2.65 3.70 2.65 3.60 4.45 6.10
The Board have resolved to pay an interim dividend of 1.8p per share. This
amounts to £2.5m and will be paid on 24 April 2025 to shareholders on the
register at 13 March 2025.
11 Intangible assets and property, plant and equipment
Intangible assets
The historical cost of computer software is the purchase cost and the direct
cost of internal development. Computer software is recognised as an intangible
asset.
31 December 30 June
2024 2023 2024
£m £m £m
Intangible assets 22.4 22.3 23.2
The intangible asset relates to capitalised costs associated with the
development of a replacement policy administration system. The system went
live in early March 2024, at which point amortisation has commenced over its
estimated Useful Economic Life.
Property, plant and equipment
Property, plant and equipment includes both tangible fixed assets and 'right
of use assets' recognised in accordance with IFRS 16.
31 December 30 June
2024 2023 2024
£m £m £m
Property, plant and equipment 0.7 0.3 0.5
Right of use assets 2.1 2.3 2.1
2.8 2.6 2.6
IFRS 16 - Leases
During the period to 31 December 2024, there were no changes to lease terms
for any of the Group's Leases recognised under IFRS 16 and the Group did not
enter into any new leases or lease extensions. The weighted average borrowing
rate applied to the lease liabilities at 31 December 2024 was 7.0% (31
December 2023: 7.0%).
The recognition of the right-of-use asset represents an increase in the
property, plant and equipment figure of £2.1m (31 December 2023: £2.3m).
Lease liabilities relating to the right-of-use asset are included within other
payables. The interest recognised on the lease liabilities in respect of the
right of use asset was £0.1m (31 December 2023: less than £0.1m).
During the year ended 30 June 2021, the Group entered into a sub-lease for
part of a building that is reported as a right-of-use asset. The group has
classified the sub-lease as an operating lease, as it does not transfer
substantially all of the risks and rewards incidental to the ownership of the
sub-let asset. During the period ending 31 December 2024, the Group recognised
rental income of less than £0.1m (31 Dec 2023: less than £0.1m).
31 December 30 June
2024 2023 2024
£m £m £m
Right of use asset recognised b/f 2.1 2.4 2.4
Additions during the period 0.1 - -
Depreciation (0.1) (0.1) (0.3)
Net book value of right of use asset c/f 2.1 2.3 2.1
Lease liability recognised b/f 2.7 2.9 2.9
Additions during the period 0.1 - -
Lease payments made during the period (0.2) (0.2) (0.4)
Interest on leases 0.1 0.1 0.2
Lease liability recognised c/f 2.7 2.8 2.7
Of which are:
Current lease liabilities 0.2 0.2 0.2
Non-current lease liabilities 2.5 2.6 2.5
12 Deferred origination costs
Amortisation of deferred origination costs is charged within the origination
costs line in the consolidated statement of comprehensive income.
Formal reviews to assess the recoverability of deferred origination costs on
investment contracts are carried out at each balance sheet date to determine
whether there is any indication of impairment. If there is any indication of
irrecoverability or impairment, the asset's recoverable amount is estimated.
Impairment losses are reversed through the consolidated statement of
comprehensive income if there is a change in the estimates used to determine
the recoverable amount. Such losses are reversed only to the extent that the
asset's carrying amount does not exceed the carrying amount that would have
been determined, net of amortisation where applicable, if no impairment loss
had been recognised.
The movement in value over the period under review is summarised below.
31 December 30 June
2024 2023 2024
£m £m £m
At beginning of financial year 112.1 117.8 117.8
Origination costs incurred during the period 4.4 3.8 8.2
Origination costs amortised during the period (6.5) (7.1) (13.9)
110.0 114.5 112.1
31 December 30 June
2024 2023 2024
Carrying value £m £m £m
Expected to be amortised within one year 11.6 16.6 11.6
Expected to be amortised after one year 98.4 97.9 100.5
110.0 114.5 112.1
13 Financial investments held to cover liabilities under
investment contracts
The Group classifies its financial assets into the following categories:
financial investments and trade receivables. Financial investments consist of
units in collective investment schemes, equity securities, fixed income
securities and deposits with credit institutions. Collective investment
schemes, equity securities and fixed income securities are designated at fair
value through profit or loss. Deposits with credit institutions are designated
at amortised cost.
The decision by the Group to designate its financial investments at fair value
through profit or loss reflects the fact that the investment portfolio is
managed, and its performance evaluated, on a fair value basis.
The Group recognises purchases and sales of investments on trade date.
Investment transaction costs are written off in administration expenses as
incurred.
All gains and losses derived from financial investments, realised or
unrealised, are recognised within investment income in the consolidated
statement of comprehensive income in the period in which they arise.
The value of financial assets at fair value through profit or loss that are
traded in active markets (such as trading securities) is based on quoted
market prices at the balance sheet date. The quoted market price for financial
assets held by the Group is the current bid price. Investments in funds are
valued at the latest available net asset valuation provided by the
administrators or managers of the funds and companies, unless the Directors
are aware of good reasons why such valuations would not be the most
appropriate or indicative of fair value. Where necessary, the Group uses other
valuation methods to arrive at the stated fair value of its financial assets,
such as recent arms' length transactions or reference to similar listed
investments.
Loans and receivables are financial assets with fixed or determinable payments
that are not quoted on an active market. Loans and receivables consist,
primarily, of contract fees receivable, long-term cash deposits (i.e., with an
original maturity duration greater than three months) and cash and cash
equivalents.
The following investments, other assets and liabilities are held to cover
financial liabilities under investment contracts. They are included within the
relevant headings on the condensed consolidated balance sheet.
31 December 30 June
2024 2023 2024
£m £m £m
Equity securities 72.4 58.5 78.9
Investment in collective investment schemes 941.4 923.6 937.5
Fixed income securities, bonds and structured notes 78.8 61.5 70.6
Deposits and money market funds 64.4 63.8 64.3
Total assets 1,157.0 1,107.4 1,151.3
Other payables (4.0) (1.4) (0.4)
Financial investments held to cover liabilities 1,153.0 1,106.0 1,150.9
The other receivables and other payables' fair value approximates amortised
cost.
14 Deferred income
Fees charged for services related to the management of investment contracts
are recognised as revenue as the services are provided. Initial fees which
exceed the level of recurring fees and relate to the future provision of
services are deferred. These are amortised over the anticipated period in
which services will be provided. The recognition of balances in the deferred
income reserve is based on actuarial assumptions around future income over the
life of each policy. These actuarial assumptions are complex in nature and are
subject to estimation uncertainty. The actuarial assumptions are reviewed
regularly by the Appointed Actuary.
The movement in value of deferred income over the period is summarised below:
31 December 30 June
2024 2023 2024
£m £m £m
At beginning of financial year 140.2 144.8 144.8
Income received and deferred during the year 6.6 6.5 12.7
Income amortised and recognised in contract fees during the year (7.8) (9.1) (17.3)
139.0 142.2 140.2
31 December 30 June
2024 2023 2024
Carrying value £m £m £m
Expected to be amortised within one year 15.4 18.7 15.0
Expected to be amortised after one year 123.6 123.5 125.2
139.0 142.2 140.2
15 Other payables
Other payables are initially recognised at fair value and subsequently
measured at amortised cost. They are recognised at the point where service is
received but payment is due after the balance sheet date.
31 December 30 June
2024 2023 2024
£m £m £m
Commission payable 1.3 1.1 1.2
Other creditors and accruals 10.5 10.3 11.7
Lease liabilities of which:
Current lease liabilities 0.2 0.2 0.2
Non-current lease liabilities 2.5 2.6 2.5
14.5 14.2 15.6
16 Provisions
Provisions represent amounts to settle a number of the claims referred to in
Note 21 'Contingent Liabilities' where it is economically beneficial to do so.
Such provisions are calculated where there is an established pattern of
settlement for that grouping of claims. The following table reflects the
movement in the provision during the period under review.
31 December 30 June
2024 2023 2024
£m £m £m
Settlement provision at beginning of financial year 0.5 0.1 0.1
Additional provisions made in the period 0.2 - 0.4
Released from the provision for settlement (0.1) - -
0.6 0.1 0.5
Further information outlined within IAS 37.85 is not disclosed on the basis
that it may prejudice the Company's position.
With the exception of the lease liabilities shown in note 11, and the
provisions referred to above, all other payable balances, including amounts
due to contract holders, are deemed to be current. Due to the short-term
nature of these payables the carrying value is considered to reflect fair
value.
17 Called up share capital
31 December 30 June
2024 2023 2024
£m £m £m
Authorised:
200,000,000 ordinary shares of 50p 100 100.0 100.0
Issued and fully paid:
137,557,079 ordinary shares of 50p
(30 June 2024: 137,557,079 ordinary shares) 68.8 68.8 68.8
18 Other Reserves
Other reserves comprise the merger reserve arising on the acquisition by the
Company of its subsidiary companies on 1 July 2005, the share premium account
and the share save reserve. The merger reserve represents the difference
between the par value of shares issued by the Company for the acquisition of
those companies, compared to the par value of the share capital and the share
premium of those companies at the date of acquisition.
31 December 30 June
2024 2023 2024
£m £m £m
Merger Reserve (48.5) (48.5) (48.5)
Share premium 0.1 0.1 0.1
Share Save Reserve 0.1 0.1 0.1
Reserve for own shares held within EBT (note 19) (0.2) (0.4) (0.3)
(48.5) (48.7) (48.6)
Included within other reserves is an amount representing 863,700 (2024:
1,182,101) ordinary shares held by the Group's employee benefit trust ('EBT')
which were acquired at a cost of £0.6m (see note 19). The ordinary shares
held by the trustee of the Group's employee benefit trust are treated as
treasury shares in the consolidated balance sheet in accordance with IAS 32
''Financial Instruments: Presentation''.
This reserve arose when the Group acquired equity share capital under its EBT,
which is held in trust by the trustee of the EBT. Treasury shares cease to be
accounted for as such when they are sold outside the Group, or the interest is
transferred in full to the employee pursuant to the terms of the incentive
plan.
19 Equity settled share-based payments
The Company has established a number of equity-based payment programmes for
eligible employees. The fair value of expected equity-settled share-based
payments under these programmes is calculated at date of grant using the
market value of the shares at the date granted and is amortised over the
vesting period on a straight-line basis through the consolidated statement of
comprehensive income. A corresponding amount is credited to equity over the
same period.
At each balance sheet date, the Group reviews its estimate of the number of
shares granted that are expected to be exercised. The impact of any revision
in the number of shares granted is recognised in the consolidated statement of
comprehensive income so that the charge to the consolidated statement of
comprehensive income is based on the number shares that actually vest. A
corresponding adjustment is made to equity.
The estimated fair value of the schemes and the imputed cost for the period
under review is not material to these financial statements.
19.1 Incentive Plan Employee Benefit Trust
An Employee Benefit Trust was established in February 2018 to hold shares
awarded to employees as an incentive on a deferred basis. Shares awarded under
the scheme are purchased by the Trust in the open market and held until
vesting. Awards made under the scheme would normally vest after three years.
31 December 30 June
2024 2023 2024
Share Awards No. of Shares No. of Shares No. of Shares
Outstanding at start of period 926,000 601,684 601,684
Granted 296,729 463,823 463,823
Forfeited - - (64,608)
Vested (393,300) (74,899) (74,899)
Outstanding at end of period 829,429 990,608 926,000
The Trust has been funded by way of a loan, and as at 31 December 2024 the
outstanding balance on the loan was £554,000 (2023: £554,000).
31 December 30 June
2024 2023 2024
Shares Held by the Trust No. of Shares No. of Shares No. of Shares
Outstanding at start of period 1,257,000 557,000 557,000
Purchased - 700,000 700,000
Forfeited -
Vested (393,300) (74,899) -
Outstanding at end of period 863,700 1,182,101 1,257,000
During the period the expense arising from share-based payment transactions
was £148,000 (2023: £82,000).
20 Related party transactions
Intra-group transactions are eliminated on consolidation and are not disclosed
separately here.
There have been no significant related party transactions in the period, nor
changes to related parties. Related party transactions affecting the results
of previous periods and an understanding of the Group's financial position at
previous balance sheet dates are as disclosed in the Annual Report &
Accounts for the year ended 30 June 2024.
Details of any share-based transactions with employees during the period are
set out in note 19.
21 Contingent liabilities
21.1 Litigation
The Group does not and has never given any investment advice. Investment
decisions are taken either by the contract holder directly or through a
professional intermediary appointed by the contract holder. Contract holders
bear the financial risk relating to the investments underpinning their
contracts, as the policy benefits are linked to the value of the assets.
Notwithstanding the above, financial services institutions are frequently
drawn into disputes in cases where the value and performance of assets
selected by or on behalf of contract holders fails to meet their
expectations. At the balance sheet date, a number of fund structures remain
affected by liquidity or other issues that hinder their sales or redemptions
on normal terms with a consequent adverse impact on policy transactions.
As reported previously, the Group has been subject to a number of complaints
in relation to the selection and performance of assets linked to contracts.
The Group has been served with a number of writs arising from such complaints
and other asset-related issues. Most of the writs relate to historic business
written prior to the closure to new business of Hansard Europe in 2013, with
some relating to Hansard International Limited. Most of the cases have arisen
in Italy, with a smaller number in Belgium and Germany
As at 30 June 2024, the Group had been served with cumulative writs with a net
exposure totalling €23.8m, or £20.2m in sterling terms (30 June 2023:
€26.1m / £22.4m) arising from contract holder complaints and other asset
performance-related issues. The corresponding figure as at 31 December 2024
was €24.1m or £20.0m (31 December 2023: €25.2m or £22.0m).
Our policy is to maintain contingent liabilities even where we win cases in
the court of first instance if such cases have been subsequently appealed.
We have previously noted that we expect a number of our larger claims and
litigation costs to ultimately be covered by our Group insurance cover.
During the period to 31 December 2024, we recorded £0.5m in insurance
recoveries in relation to litigation expenses (31 December 2023: £0.7m). We
expect such reimbursement to continue during the course of those claims.
While it is not possible to forecast or determine the final results of pending
or threatened legal proceedings, based on the pleadings and advice received
from the Group's legal representatives, the Directors believe that the Group
has strong defences to such claims. Notwithstanding this, there may be
circumstances where in order to avoid the expense and distraction of
protracted litigation the Board may consider it in the best interests of the
Group and its shareholders to reach a commercial resolution with regard to
certain of these claims. Where an established pattern of settlement is
established for any grouping of claims, a provision for expected future
settlements is made in line with IAS 37.
At this time, it is not possible to make any further estimates of liability.
Between 31 December 2024 and the date of this report, there have been no
material developments.
21.2 Isle of Man Policyholders Compensation Scheme
The Group's principal subsidiary, Hansard International, is a member of the
Isle of Man Policyholders' Compensation Scheme governed by the Life Assurance
(Compensation of Policyholders) Regulations 1991. The objective of the Scheme
is to provide compensation for policyholders should an authorised insurer be
unable to meet its liabilities to policyholders. In the event of a levy being
charged by the Scheme members, Hansard International would be obliged to meet
the liability arising at the time. The maximum levy payable in accordance with
the regulations of the Scheme in respect of the insolvency of the insurer is
2% of long-term business liabilities. Hansard International's products include
a clause in their terms and conditions permitting it to recover any monies
paid out under the Scheme from contract holders.
22 Foreign exchange rates
The closing exchange rates used by the Group for the translation of balance
sheet items to sterling were as follows:
31 December 30 June
2024 2023 2024
US Dollar 1.25 1.27 1.26
Japanese Yen 197 180 203
Euro 1.20 1.15 1.18
23 Events after the reporting period
This report for the period ended 31 December 2024 was approved for issue on 5
March 2024. No other material events have occurred between the reporting date
and the issue date that require disclosure under IAS 10.
INDEPENDENT REVIEW REPORT TO HANSARD GLOBAL PLC
Conclusion
We have been engaged by Hansard Global Plc (the "Company") to review the
condensed set of consolidated financial statements in the half-yearly
financial report for the six months ended 31 December 2024 of the Company and
its subsidiaries (together, the "Group"), which comprises the statement of
financial position, the statement of comprehensive income, the statement of
changes in equity, the statement of cash flows and the related explanatory
notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of consolidated financial statements in the
half-yearly financial report for the six months ended 31 December 2024 is not
prepared, in all material respects, in accordance with IAS 34 Interim
Financial Reporting and the Disclosure Guidance and Transparency Rules ("the
DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued by the Financial
Reporting Council for use in the UK. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. We read the other information contained in the half-yearly
financial report and consider whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
consolidated financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Scope of review section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However future events or conditions may cause the Group and
the Company to cease to continue as a going concern, and the above conclusions
are not a guarantee that the Group and the Company will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
interim financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2, the annual consolidated financial statements of
the Group are prepared in accordance with UK-adopted international accounting
standards. The directors are responsible for preparing the condensed set
of consolidated financial statements included in the half-yearly financial
report in accordance with IAS 34 Interim Financial Reporting.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Group and the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless they either intend to liquidate
the Group or the Company or to cease operations, or have no realistic
alternative but to do so.
INDEPENDENT REVIEW REPORT TO HANSARD GLOBAL PLC (continued)
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of consolidated financial statements in the half-yearly financial report
based on our review. Our conclusion, including our conclusions relating to
going concern, are based on procedures that are less extensive than audit
procedures, as described in the scope of review paragraph of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement letter to assist the Company in meeting the requirements of the DTR
of the UK FCA. Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work,
for this report, or for the conclusions we have reached.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man
IM1 1LA
5 March 2025
Risk Based Solvency Capital
A) Risk Based Solvency capital position at 31 December 2024
The Group is subject to the Isle of Man (Insurance Group) Supervision
Regulations 2019.
It has adopted the default consolidated accounts method ("Method 1") to
calculate the Group Solvency Capital Requirement ("SCR") and Own Funds as
required by these regulations.
The Group shareholder Risk Based Solvency surplus at 31 December 2024 was
£34.3m (30 June 2024: £39.4m), before allowing for payment of the 2025
interim dividend. All Risk Based Solvency and related data presented in this
section is subject to change prior to submission to regulatory authorities.
31 Dec 31 Dec 30 June
Group Risk Based Solvency capital position 2024 2023 2024
Total Total Total
£m £m £m
Own Funds 114.4 118.4 119.6
Solvency Capital Requirement 80.1 79.0 80.2
Surplus 34.3 39.4 39.4
Solvency ratio (%) 143% 150% 149%
Totals may differ due to rounding
All Own Funds are considered Tier 1 capital.
The following table analyses the components of Own Funds:
31 Dec 31 Dec 30 June
2024 2023 2024
Own Funds Own Funds Own Funds
£m £m £m
Value of In-Force 108.3 120.1 110.8
Risk Margin (12.3) (25.7) (12.6)
Net Worth 18.4 24.0 21.4
Total 114.4 118.4 119.6
Own Funds decreased due to the H1 IFRS result and dividend payments.
B) Analysis of movement in Group capital position
A summary of the movement in Group Risk Based Solvency surplus from £39.4m at
30 June 2024 to £34.3m at 31 December 2024 is set out in the table below.
Analysis of movement in Group shareholder surplus £m
Risk Based Solvency surplus at 30 June 2024 39.4
Operating experience (3.4)
Investment performance 0.1
Changes in assumptions 1.3
Dividends paid (3.3)
Foreign exchange 0.2
Risk Based Solvency surplus at 31 December 2024 34.3
The movement in Group Risk Based Solvency surplus in the first half of the
2025 financial year was the result of dividends paid and operating experience,
offset by changes in assumptions.
New business written had a negative £0.4m (H1 2024: negative £0.1m) impact
on Own Funds for the period.
C) Analysis of Group Solvency Capital Requirements
The analysis of the Group's Solvency Capital Requirement by risk type is as
follows:
Split of the Group's Solvency Capital Requirement* 31 Dec 31 Dec 30 June
2024 2023 2024
Risks % of SCR % of SCR % of SCR
Market
Equity 45% 44% 46%
Currency 11% 14% 12%
Insurance
Lapse 47% 50% 48%
Expense 18% 18% 19%
Default 2% 1% 2%
Operational 21% 16% 19%
* Figures are the capital requirements prior to diversification benefits
expressed as a percentage of the final diversified SCR.
D) Reconciliation of IFRS equity to Group Risk Based Solvency
Shareholder Own
Funds
31 Dec 31 Dec 30 June
2024 2023 2024
£m £m £m
IFRS shareholders' equity 17.6 22.0 20.8
Elimination of DOC (110.0) (114.5) (112.1)
Elimination of DIR 139.0 142.2 140.2
Value of In-Force 108.3 120.1 110.8
Liability valuation differences* (3.3) (3.4) (3.4)
Impact of risk margin (12.3) (25.7) (12.6)
Other** (24.9) (22.3) (24.1)
Risk Based Solvency Shareholder Own Funds 114.4 118.4 119.6
* Liability valuation differences relate to additional provisions made for
risk-based capital purposes, notably for contingent liabilities.
** Other is related to Intangible Assets not recognised on the solvency
balance sheet.
E) Sensitivity analysis
The sensitivity of the Own Funds to significant changes in market conditions
is as follows:
Impact of market sensitivities 31 Dec 31 Dec 30 June
2024 2023 2024
Group Group Group
£m £m £m
Own Funds 114.4 118.4 119.6
Impact of:
10% instantaneous fall in equity markets (8.0) (8.5) (8.3)
100 basis points decrease in interest rates (0.2) (0.9) (0.4)
10% increase in expenses (6.8) (7.5) (7.2)
1% increase in expense inflation (4.7) (5.8) (4.6)
10% strengthening of sterling (9.2) (11.0) (9.6)
Contacts and Advisors
Registered Office Media Enquiries
55 Athol Street Camarco
40 Strand
Douglas
London
Isle of Man
WC2N 5RW
IM99 1QL
Tel: +44 (0)20 3757 4980
Tel: +44 (0)1624 688000
Fax: +44 (0)1624 688008
www.hansard.com
President Broker
Dr Leonard Polonsky, CBE Panmure Liberum Limited
Leonard.Polonsky@hansard.com Ropemaker Place, Level 12
25 Ropemaker Street
London
EC2Y 9LY
Tel. +44 (0)20 7886 2500
Non-executive Chairman Registrar
Philip Kay Link Market Services (Isle of Man) Limited
Philip.Kay@hansard.com PO Box 227
Peveril Buildings
Peveril Square
Isle of Man
IM99 1RZ
Tel (UK): 0871 664 0300*
Tel: +44 (0)20 8639 3399
Financial Advisor
Rothschild & Co.
New Court
St. Swithin's Lane
London
EC4N 8AL
Tel: +44 (0)20 780 7966
Independent Auditor UK Transfer Agent
KPMG Audit LLC Link Market Services Trustees Limited
Heritage Court The Registry
41 Athol Street 34 Beckenham Road
Douglas Beckenham
Isle of Man Kent
IM1 1LA BR3 4TU
Tel: +44 (0)1624 681000 Tel (UK): 0871 664 0300*
Tel: +44 (0)20 8639 3399
* NB: 0871 Number - calls cost 12p per minute plus network extras. If you
are outside the United Kingdom, please call +44 371 664 0300. Calls outside
the United Kingdom will be charged at the applicable international rate. The
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