REG - Hansard Global plc - New business results for 6 months ended 31/12/2021

Hansard GlobalAnnouncement

27/01/2022 07:00

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RNS Number : 7554Z  Hansard Global plc  27 January 2022

 

 

 

 

 

 

27 January 2022

 

 

Hansard Global plc

New business results for the six months ended 31 December 2021

 

 

Hansard Global plc ("Hansard" or "the Group"), the specialist long-term
savings provider, issues its new business results for the six months ended 31
December 2021 ("H1 2022").  The three months ended 31 December 2021 are
referred to as "Q2 2022" throughout this document.

 

Summary

·    New business for the Group for Q2 2022 was £33.5m in PVNBP ("Present
Value of New Business Premiums") terms (Q2 2021: £42.1m, Q1 2022: £31.4m);

·    New business for H1 2022 was £64.9m (H1 2021: £76.3m);

·    Assets under administration were £1.23 billion at 31 December 2021
(30 June 2021:  £1.22 billion);

·    We continue to make good progress towards the successful launch of
Hansard's new product with our chosen distribution partner in Japan, against
the background of current pandemic restrictions in that country.

 

Graham Sheward, Group Chief Executive Officer, commented:

 

"Covid-19 continues to provide a challenging backdrop for our business and in
particular for launching our new product in Japan, where new States of
Emergency have been declared in several regions recently. We continue to work
with our prospective distribution partner towards a suitable launch date in a
positive and engaged manner.

 

We are also taking a number of actions to improve new business levels both
with respect to our traditional business and by progressing opportunities to
deploy new products more widely in Japan and in other suitable territories
around the world."

 

For further information:

Hansard Global
plc
+44 (0) 1624 688 000

Graham Sheward, Group Chief Executive Officer

Tim Davies, Chief Financial Officer

Email: investor-relations@hansard.com

 

Camarco
LLP
            +44 (0) 7990 653 341

Ben Woodford, Hugo Liddy

 

 

Hansard Global plc

New business results for the six months ended 31 December 2021

 

 

OVERVIEW

The Group continues to focus on the distribution of regular and single premium
savings and investment products in a range of jurisdictions around the
world.

New business for the quarter and financial year-to-date continued to be
impacted by the challenges of Covid-19 restrictions around the world and a
hesitancy by clients to commit to long-term savings products.  In Present
Value of New Business Premiums ("PVNBP") terms, new business for Q2 2022 was
20.4% lower than Q2 2021 and H1 2022 was 14.9% lower than H1 2021.

 

New Business Flows

New business flows for Hansard International for the quarter and the half-year
are summarised as follows:

 

                                         Three months ended           Six months ended
                                         31 December                  31 December
                                         2021     2020     %          2021    2020    %
 Basis                                   £m       £m       change     £m      £m      change
 Present Value of New Business Premiums  33.5     42.1     (20.4%)    64.9    76.3    (14.9%)
 Annualised Premium Equivalent           4.7      5.9      (20.3%)    8.8     10.9    (19.3%)

 

Present Value of New Business Premiums ("PVNBP")

New business flows for Hansard International on the basis of PVNBP are broken
down as follows:

                           Three months ended           Six months ended
                         31 December                    31 December
                        2021      2020      %           2021    2020    %
 PVNBP by product type  £m        £m        change      £m      £m      change
 Regular premium        21.7      26.5      (18.1%)     40.6    49.6    (18.1%)
 Single premium         11.8      15.6      (24.4%)     24.3    26.7    (9.0%)
 Total                  33.5      42.1      (20.4%)     64.9    76.3    (14.9%)

 

                             Three months ended           Six months ended
                             31 December                  31 December
                             2021     2020     %          2021    2020    %
 PVNBP by geographical area  £m       £m       change     £m      £m      change
 Middle East & Africa        11.9     14.7     (19.0%)    22.6    28.6    (21.0%)
 Rest of World               11.2     13.8     (18.8%)    20.6    24.3    (15.2%)
 Latin America               7.6      11.1     (31.5%)    14.4    18.5    (22.2%)
 Far East                    2.8      2.5      12.0%      7.3     4.9     49.0%
 Total                       33.5     42.1     (20.4%)    64.9    76.3    (14.9%)

 

 

While Q2 2022 saw an increase in new business of 6.7% from Q1 2022, the
overall environment remained challenging for investment and long-term savings
plans, with new business down 20.4% from Q2 2021.  Regular premium new
business fell 18.1%, with single premiums falling 24.4%.

The general experience across each region saw a reduction both in the number
of cases sold and in the quantity of high-value cases sold.  New business in
Latin America was additionally impacted by a tightening of our business
acceptance criteria in parts of the region to better control the quality of
new business submissions.

The exception to the above was our Far East region which continued to show
recovery from a low base in 2021.  As outlined in previous reports, our main
strategic focus in the Far East is to bring our new Japanese proposition to
market.

In light of the above experience, a number of actions are being taken to
improve new business levels, including a product campaign initiated with a
number of key brokers in December, the approval of a number of new brokers to
add to our distribution coverage, re-commencement of international travel to a
number of our key brokers by our relationship managers and further leveraging
of fin-tech and automation initiatives.

 

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, the
majority of premium contributions and of 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.

AuA increased £11.4m to £1.23 billion during the three months ended 31
December 2021, reflecting positive global stock markets.  For the six months
ended 31 December 2021, AuA increased £6.6m.

 

The following analysis shows the components of the movement in AuA during the
quarter:

 

 

                                                      Three months ended        Six months ended
                                                      31 December               31 December
                                                      2021        2020          2021       2020
                                                      £m          £m            £m         £m
 Deposits to investment contracts - regular premiums  22.4        19.8          43.3       42.3
 Deposits to investment contracts - single premiums   12.0        15.6          24.6       26.7
 Withdrawals from contracts and charges               (42.2)      (39.9)        (83.7)     (78.2)
 Effect of market and currency movements              19.2        71.9          22.4       95.7
 Increase / (decrease) in period                      11.4        67.4          6.6        86.5
 Opening balance                                      1,219.4     1,099.6       1,224.2    1,080.5
 Assets under Administration at 31 December           1,230.8     1,167.0       1,230.8    1,167.0

 

 

 

The movement in AuA is split as follows between Hansard International
(incorporating business reinsured from Hansard Worldwide) and Hansard Europe:

                                               Six months ended
                                              31 December
                                          2021           2020
                                          £m             £m
 Hansard International                    11.7           87.7
 Hansard Europe                           (5.1)          (1.2)
 Increase / (decrease) in period          6.6            86.5

 

 

Results for the half-year ENDED 31 December 2021

Trading results for the half-year are expected to be announced on 3 March
2022.

 

 

Outlook

The external global environment and the ability for our Independent Financial
Advisor ("IFA") distribution network to grow new long-term savings business
continues to be challenging as Covid-19 related restrictions and economic
confidence fluctuate.  We therefore expect IFA sales for FY 2022 to be lower
than FY 2021 but note that will not have a material impact to our profit under
International Financial Reporting Standards ("IFRS").  This is because
initial income and origination costs are deferred at point of sale and
recognised over the lifetime of contracts sold.

We remain confident that our Japanese product will successfully launch when
the environment improves in Japan and that it will produce long-term business
growth for the Group.

 

 

 

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 Western 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

 

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