REG - Hansard Global plc - New business results for the year ended 30/06/2022

Hansard GlobalAnnouncement

21/07/2022 07:00

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RNS Number : 1921T  Hansard Global plc  21 July 2022

 

 

21 July 2022

 

 

Hansard Global plc

New business results for the year ended 30 June 2022

 

 

Hansard Global plc ("Hansard" or "the Group"), the specialist long-term
savings provider, issues its trading update for the quarter ended 30 June 2022
("Q4 2022").  All figures refer to this period, except where indicated.
 Financial year ("FY 2022") figures refer to 1 July 2021 to 30 June 2022.

Summary

·    New business for the financial year ended 30 June 2022 was £120.5m
in PVNBP ("Present Value of New Business Premiums") terms, down 30.3% from
£173.0m in FY 2021;

·    New business for Q4 2022 was £24.8m, 49.8% lower than £49.4m in Q4
2021 (incorporating the impact of annual changes in actuarial assumptions to
the calculation of PVNBP in Q4);

·    New business for the quarter and financial year was impacted by
economic uncertainty, geopolitical developments, the aftermath of Covid-19
restrictions around the world, and a general hesitancy by clients to commit to
long-term savings products;

·    Assets under administration were £1.1bn as at 30 June 2022, down
from £1.2bn at 30 June 2021, primarily reflecting declines in global stock
markets over the year;

·    The Group remains on track for replacing its policy administration
systems to support its next generation of products whilst realising associated
cost and efficiency gains;

·    While the Group continues to work with its prospective Japanese
distribution partner towards a suitable launch date, we now anticipate further
obstacles to the Group's envisaged timeframe for the product launch, due
principally to Covid-related operational challenges facing our partner and
changes in its senior personnel. While continuing this engagement we are
accelerating action to access alternative distributors and distribution
channels via initiatives already commenced as part of our existing plans for
Japan.

Graham Sheward, Group Chief Executive Officer, commented:

"Given the timeline challenges being experienced with our chosen initial
distributor in Japan, we are proactively focussing more of our efforts on
alternative distributors and distribution channels.  A targeted expansion to
additional distributors has always formed part of our longer-term plans and
this is now being prioritised at greater pace.

We are also working hard to improve new business levels through a combination
of new product development, new broker relationships and the deployment of
additional experienced sales management executives into the business."

 

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
 
+44 (0) 7532 107 817

Ben Woodford, Hugo Liddy

Hansard Global plc

TRADING UPDATE for the PERIOD ended 30 June 2022

 

 

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 continued to be impacted by
economic uncertainty, geopolitical developments, the aftermath of Covid-19
restrictions around the world, and a general hesitancy by clients to commit to
long-term savings products, particularly those with contractual regular
premiums. The prior year comparative figures benefited from a number of high
net worth single premium policies which did not repeat in FY 2022.

In Present Value of New Business Premiums ("PVNBP") terms, new business for Q4
2022 was 49.8% lower than Q4 2021. For the year ended 30 June 2022, new
business was 30.3% lower compared to the prior year comparative.

The comparisons for Q4 are impacted by our annual assessment of actuarial
assumptions which take place each year in Q4 and are reflected in the Q4
results. The Q4 2021 review incorporated significant positive adjustments
which increased the value of new business premiums assigned to regular premium
savings plans.  The review in Q4 2022 did not result in a similar size of
increase.  Further analysis of this impact is outlined in more detail below.

New Business Flows

New business flows for the quarter and the year ended 30 June are summarised
as follows:

                                                                         Three months ended              Year ended
                                                                         30 June                         30 June
                                                                         2022     2021     %             2022    2021    %
 Basis                                                                   £m       £m       change        £m      £m      change
 Present Value of New Business Premiums                                  24.8     49.4     (49.8%)       120.5   173.0   (30.3%)

 Present Value of New Business Premiums excluding the impact of annual
 assumption changes made in Q4 of the relevant year

                                                                         22.3     39.1     (43.0%)       118.0   162.7   (27.5%)
 Annualised Premium Equivalent                                           3.2      5.5      (41.8%)       16.4    23.1    (29.0%)

 

The present value of new business premiums is influenced, amongst other
factors, by the Group's expectations of future premium collections on regular
premium contracts issued during the year. Where these expectations at year end
are different from the assumptions used in the calculation in prior quarters,
the assumptions are amended in Q4 to better report the cumulative value of new
business. This adjustment is reflected in the Q4 reported new business figures
and can, where material, impact the underlying Q4 result.

 

In the prior year, improved experience in the collection of premiums over the
lifetime of policy contracts resulted in an increase to PVNBP for the year of
£10.3m, reflected in Q4 2021.  For the 2022 financial year, the change in
assumptions had a smaller increase of £2.5m, reflected in Q4 2022.

 

Excluding the impact of those adjustments, new business was down 43.0% for Q4
2022 versus Q4 2021 and down 27.5% for FY 2022 versus FY 2021 (as shown in
line 2 of the table above).

 

In Annual Premium Equivalent ("APE") terms, new business was down 41.8% for
the quarter and down 29.0% for the year. APE figures are unaffected by the
updated assumptions above.

The split of regular and single new business premiums on the PVNBP basis was
as follows:

                        Three months ended             Year ended
                        30 June                        30 June
                        2022     2021     %            2022   2021   %
 PVNBP by product type  £m       £m       change       £m     £m     change
 Regular premium        17.2     33.6     (48.8%)      76.9   109.6  (29.8%)
 Single premium         7.6      15.8     (51.9%)      43.6   63.4   (31.2%)
 Total                  24.8     49.4     (49.8%)      120.5  173.0  (30.3%)

 

The regional split of new business premiums on the PVNBP basis was follows:

                             Three months ended             Year ended
                             30 June                        30 June
                             2022     2021     %            2022   2021   %
 PVNBP by geographical area  £m       £m       change       £m     £m     change
 Middle East and Africa      9.3      19.0     (51.1%)      44.3   68.3   (35.1%)
 Rest of World               5.5      14.3     (61.5%)      33.9   50.7   (33.1%)
 Latin America               7.5      11.7     (35.9%)      28.2   40.3   (30.0%)
 Far East                    2.5      4.4      (43.2%)      14.1   13.7   2.9%
 Total                       24.8     49.4     (49.8%)      120.5  173.0  (30.3%)

 

 

The overall environment remained challenging for investment and long-term
savings plans.  As noted above, the comparisons for regular premium new
business are impacted by the annual review of actuarial assumptions feeding
into the net present value of premiums written.

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.

As mentioned in our previous quarterly update, we have recruited two senior
additions to our sales team: a Head of Sales and a Head of New Business
Development, to help develop and grow future new business levels.  This has
also been supplemented by the addition of an experienced new regional sales
manager for our Middle East and Africa region.  With the relaxation of
Covid-19 restrictions in a number of regions we are also re-locating two
regional sales managers permanently into their regions to grow business
locally.

The Head of Sales has taken oversight of our global broker-channel sales team
and is tasked to deliver a number of our key distribution and relationship
initiatives, enhancing our overall broker proposition.  Over the past quarter
he has made good progress, reorganising our sales operations to get more out
of our regional sales manager resources, putting a new sales plan in place and
rolling out new targets and incentives for the coming financial year.

The Head of New Business Development is tasked with developing business
relationships with new distributors and further invigorating relationships
with current distributors.  A number of new developments have already been
delivered, including streamlining the onboarding process  for new brokers as
part of our plan to expand further our networks of distributors.

 

The expanded sales team will drive a number of broker and product initiatives
to increase new business in the current year and beyond.  This includes the
development and launch of new products for key target markets, updates and
improvements to existing products and the recruitment of additional localised
sales colleagues into key growth regions.

 

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"), which closed to new business in 2013.
 

During Q4 2022, AuA decreased by £73.5m or 6.3%, primarily reflecting the
impact of global economic concerns on stock markets. Significantly lower
single premium inflows were offset by lower contract withdrawals.  For the
year ended 30 June 2022, AuA decreased £126.0m or 10.3% for similar reasons.

 

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

 

                                                      Three months ended                  Year ended
                                                                 30 June                             30 June
                                                      2022           2021                 2022           2021
                                                      £m             £m                   £m             £m
 Deposits to investment contracts - regular premiums  21.3           21.7                 86.2           85.0
 Deposits to investment contracts - single premiums   7.6            16.1                 43.8           63.8
 Withdrawals from contracts and charges               (36.2)         (50.6)               (158.2)        (167.2)
 Effect of market and currency movements              (66.2)         55.9                 (97.8)         162.1
 (Decrease) / increase in period                      (73.5)                43.1          (126.0)        143.7
 Opening balance                                      1,171.7        1,181.1              1,224.2        1,080.5
 Assets under Administration at 30 June               1,098.2        1,224.2              1,098.2        1,224.2

 

 

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

                                                 Year ended
                                                  30 June
                                              2022      2021
                                              £m        £m
 Hansard International                        (105.3)   148.3
 Hansard Europe                               (20.7)    (4.6)
 (Decrease) / increase in period              (126.0)   143.7

 

 

Results for the year ENDing 30 JUNE 2022

Full trading results for the year are scheduled to be announced on 22
September 2022.

OUTLOOK

The external global environment and the ability for our Independent Financial
Advisor ("IFA") distribution network to grow new long-term savings business
continue to be challenging.  We have invested in additional experienced sales
management executives and embarked upon a wide range of initiatives to improve
new business for the 2023 financial year.

While our Japanese product is now expected to take longer to launch into the
market, we remain confident that the development work that has taken place can
be deployed across a number of different distribution channels and we are
fully focussed on capitalising on what we continue to believe to be a
significant commercial opportunity.

 

 

 

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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