REG - Personal Group - Interim Results
24/09/2024 07:00
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RNS Number : 3317F Personal Group Holdings PLC 24 September 2024
24 September 2024
PERSONAL GROUP HOLDINGS PLC
("Personal Group", "Company" or "Group")
Interim Results & Interim Dividend for the six months ended 30 June 2024
Positive first half performance, driven by growth across all business lines
On track to meet market expectations for the full year
Personal Group Holdings Plc (AIM: PGH), the workforce benefits and health
insurance provider, is pleased to announce its interim results for the six
months ended 30 June 2024.
The last six months have seen a strong performance across the business with
the evolution of a clear strategy to capture a significant market opportunity.
The Company has delivered double digit revenue growth across all areas of the
business and notable EBITDA growth in excess of 30%.
Financial Highlights
· Revenue from Continuing Operations* up 14% to £21.0m (H1 2023: £18.4m), with
growth across all areas
· Recurring revenue now 81% of total, up from 76% in H1 2023
· Adjusted EBITDA** from Continuing Operations* up 31% to £3.9m (H1 2023:
£3.0m)
· Profit before tax from Continuing Operations* up 14% to £2.3m (H1
2023: £2.0m)
· Basic EPS of 5.4p (H1 2023: 4.5p)
· Recurring revenue continues to increase across the Group, providing high
levels of visibility for the second half of FY24 and beyond:
o Insurance Annualised Premium Income ("API") increased by c.14% to £33.8m (H1
2023: £29.6m)
o Benefits Platform Annual Recurring Revenue ("ARR") increased c.15% to £6.3m
(H1 2023: £5.5m)
o Pay & Reward ARR increased c.6% to £0.7m (H1 2023: £0.6m)
· £5.2m of cash generated from operations, with cash and deposits at 30 June
2024 of £23.1m (31 December 2023: £20.1m), and debt free
· Interim dividend increased by 11% to 6.5p (H1 2023: 5.85p), reflecting the
Board's continued confidence in the Group's performance and prospects
Operational Highlights
· New annualised insurance sales up 21% to £6.9m (H1 2023: £5.8m), a result of
improved productivity alongside the growth in the size of the field sales team
· Disposal of Let's Connect post the period-end has resulted in a simplified
Group structure, enabling greater focus on core areas of the business
· Remaining business now has c.80% of recurring revenues and is no longer
impacted by the seasonality of Let's Connect
· 36 new client wins in the period (H1 2023: 36)
· Year on year retention rates for insurance remained strong at over 80%
· 100% of Sage Employee Benefits clients and c.40% of the Hapi Enterprise client
base migrated across to next generation Hapi 2.0 platform, with full migration
anticipated by the end of the year
Post-Period Trading and Outlook
· Strong new insurance sales have continued at the start of H2 2024, with
retention rates remaining robust
· Trading in Q3 2024 continues to be in line with management's expectations.
This combined with the Group's growing proportion of recurring revenues
underpins the Board's confidence in achieving market expectations for the full
year
*Continuing Operations excludes the results of Let's Connect, which was
disposed of on 9 July 2024
**Adjusted EBITDA is defined as earnings before interest, tax, depreciation,
amortisation of intangible assets, goodwill impairment, share-based payment
expenses, corporate acquisition costs and restructuring costs; this definition
remains unchanged from previous periods
Paula Constant, Chief Executive of Personal Group, commented:
"We are pleased to be reporting another set of strong results, showing
continued growth, an increasing base of recurring revenue with high customer
retention and strong cash generation. In the light of our strong performance
to date in 2024, I am pleased to announce an increased interim dividend of 6.5
pence.
Our aspiration is to be the champion of affordable and accessible benefits,
keeping businesses and their employees happy, healthy and protected. Never has
this been more important. The ongoing cost-of-living pressures, increased sick
leave and long NHS waiting lists are combining to put considerable pressure on
UK businesses and their employees. We are focused on providing them with the
offerings they need to mitigate these challenges.
We have an excellent platform from which to grow. The work in my first year as
CEO to crystalise the strategy and simplify our products, processes and
organisation puts us in a strong position to accelerate growth through both
organic and inorganic channels, delivering further value to all our
stakeholders."
For more information please contact:
Personal Group Holdings Plc
Paula Constant / Sarah Mace via Alma
Canaccord Genuity Limited (Nominated Adviser & Broker)
Max Hartley / Harry Rees +44 (0)20 7523 8000
Alma Strategic Communications
Caroline Forde / Joe Pederzolli / Kinvara Verdon +44 (0)20 3405 0205
personalgroup@almastrategic.com
Notes to Editors
Personal Group Holdings Plc (AIM: PGH) is a workforce benefits and health
insurance provider. Its vision is to be the champion of affordable and
accessible insurance and benefits, keeping businesses and their employees
happy, healthy and protected. The Group is proud to support the health and
wellbeing of c. 1.25 million UK employees.
The Group's insurance provides employees with access to affordable, individual
policies for hospital (https://www.hapi.co.uk/insurance/hospital-cash-plan)
, recovery (https://www.hapi.co.uk/insurance/convalescence-plan) and death
benefit (https://www.hapi.co.uk/insurance/death-benefit-plan) plans. The
Group's award-winning benefits platform, Hapi, brings together extensive
employee benefits, discounts and rewards, in one responsive platform. As well
as being sold direct to employers, the Hapi platform supports Sage's Employee
Benefits offerings for SMEs.
This comprehensive range of offerings, powerful platform and unique sales
model of face-to-face, one-to-one engagement with employees, provides Personal
Group with a strong market position from which to grow.
Head-quartered in Milton Keynes, the Group has built an extensive blue-chip
customer list over its 40-year history, including Airtanker, B & Q,
Barchester Healthcare, British Transport Police, Merseyrail, Office of
National Statistics, Randstad, Royal Mail Group, The Royal Mint, Stagecoach
Group plc, and The University of York
For further information on the Group please see www.personalgroup.com
(http://www.personalgroup.com)
CEO STATEMENT
I am pleased to report on a strong first half for the Group. We have seen
record insurance sales again, with our unique face-to-face sales model and
focus on increased effectiveness of the sales team driving high conversion
rates. Our higher margin recurring SaaS revenue continues to grow, as we win
new customers onto our Benefits platform, Hapi. We have now successfully
migrated a large proportion of our customer base onto our next generation of
the platform, providing an enhanced experience for them and increased
scalability for us. New customers have been secured across both benefits and
insurance divisions and we continue to expand within our extensive customer
base.
The disposal of Let's Connect, our salary sacrifice division, post period end
has provided us with a simplified structure, while reducing the cash impact of
seasonality within the business and enabling us to increase our focus on
recurring revenue streams. The proceeds of the disposal have further
strengthened our balance sheet, increasing our ability to exploit what we see
as a considerable opportunity ahead, through both organic and acquisitive
means.
Personal Group is now a more focused business, with a majority of recurring
revenue, high levels of cash generation, a unique offering and an extensive
customer base. Following the completion of our market analysis and strategy
review, we have a clear, compelling strategy for growth, both within our
existing customer base and more broadly, building on these strong foundations.
We are progressing a number of key growth initiatives moving forwards. For
insurance, these comprise expanding our employee-paid portfolios, accelerating
a simplified digital offering across the SME market, and partnering to access
a greater proportion of employees in adjacent segments. We intend to
strengthen our existing employer-paid group cash plan offering, establishing
stronger broker relationships, and adding bolt on options to enhance our
proposition.
On employee benefits, we will grow our higher margin, recurring SaaS revenue
through further developing our relationship with Sage, progressing additional
partnerships, continuing to monetise our eCommerce partnerships, including
adding further gamification options, and accelerating our digital consulting
propositions, which will also be offered through our Hapi platform. Following
full migration, we will enhance the award-winning Hapi platform offering with
further AI and analytics.
We have agreed a set of aspirations to exit 2030. The KPIs to gauge our
progress include growing revenues to in excess of £100m, group EBITDA to
£30m, growth in our face-to-face insurance capability coupled with
significant expansion into other channels, and an ambition to increase the
size of our current digital SaaS annual recurring revenues to £20m. We
believe we can achieve these based on organic initiatives but, with the
strength of our balance sheet, and available cash, we also have the
opportunity to accelerate growth through acquisitions.
We continue to work on streamlining and optimising our operations and I would
like to thank the team for their ongoing passion, pace and professionalism. We
have huge belief in the role we can play in positively impacting the
happiness, health and protection of the UK workforce and I am excited to
embark on delivering these aspirations with their support.
Divisional H1 Segmental Analysis
Insurance
New annualised insurance sales in the first six months rose by 21% to £6.9m
(H1 2023: £5.8m), a result of the growth in the size of the field sales team
alongside improved productivity and we recorded new 'best' performances for
'week' 'month' and 'quarter' during the period. This, alongside continued
strong retention levels, helped to drive up the API value to £33.8m (31 Dec
2023: £31.6m) and led to an 11% increase in earned premium for the period to
£15.4m (H1 2023: £13.8m). New customers secured in the period include
Atalian and Europa Worldwide Group.
As anticipated, claims levels for the first half were higher than the previous
year on Hospital Cash plans, as activity to address NHS backlogs continued.
These combined factors resulted in a 3% increase in adjusted EBITDA
contribution to £5.3m (H1 2023: £5.1m). The strong performance demonstrates
both the market fit for the Group's offerings, and the increasing efficiency
and focus of the sales team.
In July 2024, the Board approved its annual Consumer Duty Report, which
confirmed that we believe we are meeting our FCA obligations in terms of
product governance, fair value, customer service and consumer understanding.
We remain committed to continually improving the way we monitor the outcomes
consumers experience as well as keeping up to date with FCA guidance, thematic
reviews and enforcement actions across the industry.
Benefits
Platform
Uptake of the Group's digital benefits platform, Hapi and Sage Employee
Benefits ("SEB"), its SME focused offering in partnership with Sage,
continued, resulting in growth in recurring subscription income, which ended
the half year with collective ARR of £6.3m (H1 2023: £5.5m). Revenue from
digital platform subscriptions and commissions from third party benefit
suppliers which sit on the platform rose to £3.8m (H1 2023: £3.1m) with a
resulting growth in EBITDA of 17% to £2.2m (H1 2023: £1.8m).
Migration of customers onto the next generation platform, Hapi 2.0, is
progressing well, with all Sage customers now migrated onto SEB 2.0 and 40% of
direct customers onto Hapi 2.0 with positive feedback received on both the
improved employee and employer user experiences.
The platform continues to win notable industry awards, including Best Use of
Technology in the 2024 Health and Wellbeing Awards, and Best Use of Technology
in Benefits in the 2024 Workplace Savings & Benefits Awards.
Notable new Hapi customers secured in the period include the Office of
National Statistics, DHU Healthcare and Karbon Homes.
Pay and Reward
The Group's Pay & Reward division had a positive period and as announced
on 19 March, secured a significant three‐year contract with a global
airline, worth £650,000 in total, contributing approximately £100,000 per
annum in ARR. The contribution from this sector increased by c.11% with
revenue of £1.2m (H1 2023: £1.1m) and EBITDA of £0.3m (H1 2023: £0.2m).
Interim Dividend
The Company is pleased to announce an interim dividend for 2024 of 6.5p,
representing an 11% increase on the previous year, to be paid on 8 November
2024 to members on the register as at 4 October 2024. Shares will be marked
ex-dividend on 3 October 2024. The Board has considered the level of dividend
in the context of the expectation of full year results, and this reflects
continued confidence in the Group's business model and prospects.
Current Trading and Outlook
The market opportunity is, I believe, considerable and we have an excellent
platform from which to grow our recurring revenues through both organic and
inorganic means to deliver further value to all our stakeholders.
Trading in Q3 has remained robust and in line with management's expectations
to date. This combined with the Group's growing proportion of recurring
revenues underpins the Board's confidence in achieving market expectations for
the full year.
Paula Constant
Group Chief Executive
24 September 2024
Consolidated Income Statement
6 months 6 months
ended ended
30 June 2024 30 June 2023
Unaudited Unaudited (Restated*)
Note £'000 £'000
Insurance revenue 15,409 13,848
Employee benefits and services 4,976 4,212
Other income 69 69
Investment income 582 295
(________) (________)
Revenue 21,036 18,424
(________) (________)
Insurance service expenses 4 (8,670) (7,230)
Net expenses from reinsurance contracts held (47) (57)
Employee benefits and services expenses (3,987) (3,725)
Other expenses (35) (41)
Group administration expenses (5,954) (5,296)
Share based payment expenses (80) (110)
Charitable donations (50) (50)
(________) (________)
Expenses (18,823) (16,509)
(________) (________)
Operating profit 2,213 1,915
Finance costs (53) (22)
Unrealised gains on equity investments 90 77
(________) (________)
Profit before tax 2,250 1,970
Tax 5 (376) (306)
(________) (________)
Profit for the period after tax from continuing operations 1,874 1,664
(________) (________)
Loss for the period from discontinued operations 11 (185) (255)
(________) (________)
Total comprehensive income for the period 1,689 1,409
(________) (________)
Earnings per share 6 Pence Pence
Basic earnings (loss) per share
Continuing operations 6.0 5.3
Discontinued operations (0.6) (0.8)
Total 5.4 4.5
Diluted earnings (loss) per share
Continuing operations 5.9 5.3
Discontinued operations (0.6) (0.8)
Total 5.3 4.5
The total comprehensive income for the period is attributable to equity
holders of Personal Group Holdings Plc.
Consolidated Balance Sheet
At 30 June 2024 At 31 Dec 2023
Unaudited Unaudited
(Restated*)
Note £'000 £'000
ASSETS
Non-current assets
Goodwill 7 2,684 2,684
Intangible assets 8 4,185 3,604
Property, plant and equipment 9 4,831 4,915
(_______) (_______)
11,700 11,203
(________) (________)
Current assets
Assets included in disposal group classified as held for sale 11 1,719 7,639
Financial assets 10 3,335 4,035
Trade and other receivables 7,996 8,872
Reinsurance contracts held 6 (2)
Cash and cash equivalents 20,692 17,433
Current tax assets 644 12
(________) (________)
34,392 37,989
(________) (________)
Total assets 46,092 49,192
(________) (________)
*Following the Group's decision to sell Let's Connect, revenue and expenses,
gains and losses relating to the discontinuation of this subgroup have been
eliminated from profit of loss from the Group's continuing operations and are
shown as a single line in the consolidated income statement. Assets and
liabilities allocable to Let's Connect have been classified as a disposal
group. See note 11 for further details.
Consolidated Balance Sheet
At 30 June 2024 At 31 Dec 2023
Unaudited Unaudited
(Restated)
Note £'000 £'000
EQUITY
Equity attributable to equity holders of Personal Group Holdings plc
Share capital 1,562 1,562
Share premium 1,134 1,134
Capital redemption reserve 24 24
Other reserve (27) (36)
Share based payment reserve 582 513
Profit and loss reserve 28,665 28,798
(________) (________)
Total equity 31,940 31,995
(________) (________)
LIABILITIES
Non-current liabilities
Deferred tax liabilities 879 778
Trade and other payables 599 548
(________) (________)
1,478 1,326
(________) (________)
Current liabilities
Liabilities included in disposal group classified as held for sale 11 553 2,534
Trade and other payables 11,047 12,602
Insurance contract liabilities 1,074 735
(________) (________)
12,674 15,871
(________) (________)
(________) (________)
Total liabilities 14,152 17,197
(________) (________)
( ) ( )
(________) (________)
Total equity and liabilities 46,092 49,192
(________) (________)
Consolidated Statement of Changes in Equity for the six months ended 30 June
2024
Share capital Share Premium Capital Other reserve Share Based Payment Reserve Profit & loss reserve Total equity
redemption
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 January 2024 1,562 1,134 24 (36) 513 28,798 31,995
(________) (________) (________) (________) (________) (________) (________)
Dividends - - - - (1,827) (1,827)
-
Employee share-based compensation - - - - 69 11 80
Proceeds of SIP* share sales - - - - - 76 76
Cost of SIP shares sold - - - 82 - (82) -
Cost of SIP shares purchased - - - (33) - - (33)
Purchase of new shares - - - (40) - - (40)
(________) (________) (________) (________) (________) (________) (________)
Transactions with owners - - - 9 69 (1,822) (1,744)
(________) (________) (________) (________) (________) (________) (________)
Profit for the period - - - - 1,689 1,689
-
(________) (________) (________) (________) (________) (________) (________)
Total comprehensive income for the period - - - - - 1,689 1,689
(________) (________) (_______) (_______) (_______) (_______) (_______)
Balance as at 30 June 2024 1,562 1,134 24 (27) 582 28,665 31,940
(________) (________) (________) (________) (________) (________) (________)
* PG Share Ownership Plan (SIP)
Consolidated Statement of Changes in Equity for the six months ended 30 June
2023
Share capital Share Premium Capital Other reserve Share Based Payment Reserve Profit & loss reserve Total equity
redemption
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 January 2023 1,562 1,134 24 (55) 367 27,946 30,978
(________) (________) (________) (________) (________) (________) (________)
Dividends - - - - - (1,656) (1,656)
Employee share-based compensation - - - - 110 - 110
Proceeds of SIP* share sales - - - - - 12 12
Cost of SIP shares sold - - - 17 - (17) -
Cost of SIP shares purchased - - - (10) - - (10)
(________) (________) (________) (________) (________) (________) (________)
Transactions with owners - - - 7 110 (1,661) (1,544)
(________) (________) (________) (________) (________) (________) (________)
Profit for the period - - - - - 1,409 1,409
(________) (________) (________) (________) (________) (________) (________)
Total comprehensive income for the period - - - - - 1,409 1,409
(________) (________) (_______) (_______) (_______) (_______) (_______)
Balance as at 30 June 2023 1,562 1,134 24 (48) 477 27,694 30,843
(________) (________) (________) (________) (________) (________) (________)
* PG Share Ownership
Consolidated Statement of Cash Flows from continuing operations
6 months 6 months
ended ended
30 June 2024 30 June 2023
Unaudited Unaudited
(Restated)
£'000 £'000
Net cash from operating activities (see opposite) 5,238 6,384
(______) (______)
Investing activities ( ) ( )
Additions to property, plant, and equipment (63) (97)
Additions to intangible assets (1,250) (865)
Proceeds from sale of property, plant and equipment 54 -
Purchase of financial assets - (29)
Sale of financial assets 790 -
Interest received 582 295
(______) (______)
Net cash from investing activities 113 (696)
(______) (______)
Financing activities
Interest paid - (3)
Purchase of own shares by the SIP (6) (6)
Proceeds from disposal of own shares by the SIP 11 12
Payment of lease liabilities (270) (229)
Dividends paid (1,827) (1,656)
(______) (______)
Net cash used in financing activities (2,092) (1,882)
(______) (______)
Net change in cash and cash equivalents from continuing operations 3,259 3,806
Cash and cash equivalents, beginning of period from continuing operations 17,433 16,700
(_______) (_______)
Cash and cash equivalents, end of period from continuing operations 20,692 20,506
(________) (________)
Consolidated Statement of Cash Flows from continuing operations
6 months 6 months
ended ended
30 June 2024 30 June 2023
Unaudited Unaudited
(Restated)
£'000 £'000
Operating activities
Profit after tax 1,874 1,664
Adjustment for:
Depreciation 567 471
Amortisation of intangible assets 669 383
(Profit) / Loss on disposal of property, plant and equipment (12) 14
Interest received (582) (295)
Realised and unrealised investment gains (90) (77)
Interest charge 53 24
Share-based payment expenses 80 111
Taxation expense recognised in income statement 368 306
Changes in working capital:
Trade and other receivables 868 875
Trade and other payables 2,003 3,068
Movement in insurance liabilities 339 141
Inventories - (9)
Taxes paid (899) (292)
(________) (________)
Net cash from operating activities 5,238 6,384
(________) (________)
Notes to the Consolidated Financial Statements
1 General information
The principal activities of Personal Group Holdings Plc ('the Company') and
subsidiaries (together 'the Group') include transacting short-term accident
and health insurance and providing employee services in the UK.
The Company is a limited liability company incorporated and domiciled in
England. The address of its registered office is John Ormond House, 899
Silbury Boulevard, Milton Keynes, MK9 3XL.
The Company is listed on the Alternative Investment Market of the London Stock
Exchange.
The condensed consolidated financial statements do not include all the
information required for full annual financial statements and should be read
in conjunction with the consolidated financial statements of the Group for the
year ended 31 December 2023.
The financial information for the year ended 31 December 2023 set out in this
interim report does not constitute statutory accounts as defined in Section
434 of the Companies Act 2006. The statutory financial statements for the year
ended 31 December 2023 have been filed with the Registrar of Companies. The
auditor's report on those financial statements was unqualified and did not
contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
These interim financial statements are unaudited and have not been reviewed by
the auditors under International Standard on Review Engagements (UK and
Ireland) 2410.
These consolidated interim financial statements have been approved for issue
by the board of directors on 24 September 2024.
2 Accounting policies
These interim consolidated financial statements of Personal Group Holdings Plc
are for the six months ended 30 June 2024. These interim financial statements
have been prepared in accordance with IAS 34 Interim Financial Reporting as
endorsed for use in the UK.
They do not include all the information required for a complete set of IFRS
financial statements. However, 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 consolidated financial statements as at and for the year ended 31
December 2023.
These financial statements have been prepared in accordance with IFRS
standards and IFRIC interpretations as adopted by the UK, issued and effective
as at 30 June 2024.
Insurance contracts
IFRS 17 sets out the classification, measurement and presentation and
disclosure requirements for insurance contracts. It requires insurance
contracts to be measured using current estimates and assumptions that reflect
the timing of cash flows and recognition of profits as insurance services are
delivered. The standard provides two main measurement models which are the
General Measurement Model ("GMM") and the Premium Allocation Approach ("PAA").
The PAA simplifies the measurement of insurance contracts for remaining
coverage in comparison to the GMM. The PAA is very similar to Personal Group's
previous accounting policies under IFRS 4 for calculating revenue, however
there are some presentation changes.
The GMM is used for the measurement of the liability for incurred claims.
PAA eligibility
Under IFRS 17, Personal Group's insurance contracts issued and are all
eligible to be measured by applying the PAA, due to meeting the following
criteria:
· Insurance contracts with coverage period of one year or
less are automatically eligible. This covers all hospital, convalescence, and
death benefit insurance contracts.
· Modelling of contracts with a coverage period greater
than one year (employee default policies) produces a measurement for the group
of reinsurance contracts that does not differ materially from that which would
be produced applying the GMM.
Level of aggregation
Personal Group manages all insurance contracts as one portfolio within the
insurance operating segment as they are subject to similar risks.
Onerous contracts
Under the PAA, it is assumed there are no contracts in the portfolio that are
onerous at initial recognition, unless there are facts and circumstances that
may indicate otherwise. Given the short-tailed nature of policies issued be
Personal Group, management do not consider there to be any material
circumstance under which policies in issue would be onerous.
Modification and derecognition
Personal Group derecognises insurance contracts when the rights and
obligations relating to the contract are extinguished (meaning discharged,
cancelled, or expired) or the contract is modified such that the modification
results in a change in the measurement model or the applicable standard for
measuring the contract.
Contract boundaries
The measurement of insurance contracts includes all future cash flows expected
to arise within the boundary of each contract. Cash flows are within the
boundary of an insurance contract if they arise from substantive rights and
obligations that exist during the reporting period in which Personal Group can
compel the policyholder to pay premiums or in which it has a substantive
obligation to provide the policyholder with services.
Personal Group assesses the contract boundary at initial recognition and at
each subsequent reporting date to include the effects of changes in
circumstances on the Group's substantive rights and obligations. The
assessment of the contract boundary, which defines the future cash flows that
are included in the measurement of the contract, requires judgement and
consideration.
Personal Group primarily issues insurance contracts which provide coverage to
policyholders in the event of hospitalisation, convalescence, or death. While
the contracts are typically weekly or monthly in their term length, the
contract boundary is assessed with consideration of the delayed timing around
claims of this nature and the timing of expected future claims payments with
reference to the covered loss event.
Measurement - Liability for remaining coverage
On initial recognition of insurance contract, the carrying amount of the
liability for remaining coverage is measured as the premiums received on
initial recognition, if any, minus any reinsurance acquisition expense cash
flows allocated to the contracts and any amounts arising from the
derecognition of the prepaid reinsurance acquisition expense cash flows asset.
Personal Group has chosen not to expense insurance acquisition expense cash
flows as incurred on its contracts as they have coverage of less than one
year.
Subsequently, at the end of each reporting period, the liability for remaining
coverage is increased by any additional premiums received in the period and
decreased for the amounts of expected premium cash flows recognised as
reinsurance revenue for the services provided in the period.
Personal Group has elected not to adjust the liability for remaining coverage
for the time value of money as its insurance contracts do not contain a
significant financing component.
3 Segment analysis
The segments used by management to review the operations of the business are
disclosed below.
1) Insurance
Personal Assurance Plc (PA), a subsidiary within the Group, is a PRA regulated
general insurance Company and is authorised to transact accident and sickness
insurance. It was established in 1984 and has been underwriting business since
1985. In 1997 Personal Group Holdings Plc (PGH) was created and became the
ultimate parent undertaking of the Group.
Personal Assurance (Guernsey) Limited (PAGL), a subsidiary within the Group,
is regulated by the Guernsey Financial Services Commission and has been
underwriting death benefit policies since March 2015.
This operating segment derives the majority of its revenue from the
underwriting by PA and PAGL of insurance policies that have been bought by
employees of host companies via bespoke benefit programmes. During 2020 PAGL
began underwriting employee default insurance for a proportion of LC
customers.
2) Benefits Platform
Revenue in this segment relates to the annual subscription income and other
related income arising from the licensing of Hapi, the Group's employee
benefit platform. This includes sales to both the large corporate and SME
sectors.
3) Pay and Reward
Pay and Reward refers to the trade of the Group's pay and reward consultancy
companies, Innecto, purchased in 2019, and QCG, purchased in 2022. Revenue in
this segment relates to consultancy, surveys, and licence income derived from
selling digital platform subscriptions.
4) Other
The other operating segment includes revenue generated from the resale of
vouchers. This segment also consists of revenue generated by Berkeley Morgan
Group (BMG) and its subsidiary undertakings along with any investment and
rental income obtained by the Group.
Discontinued Operations - Other Owned Benefits
This segment constitutes any goods or services in the benefits platform supply
chain which are owned by the Group. At present this is made up of a technology
salary sacrifice business trading as PG Let's Connect, purchased by the Group
in 2014. The Group sold Let's Connect in July 2024 (see Note 11 for further
details). As such, this segment is treated as discontinued operations within
these accounts.
The revenue and net result generated by each of the Group's continuing
operating segments are summarised as follows,
6 months 6 months
ended ended
30 June 2024 30 June 2023
Unaudited Unaudited - Restated
£'000 £'000
Revenue by Segment from continuing activities
Insurance 15,409 13,848
Benefits Platform 5,207 4,563
Platform - Group Elimination (1,425) (1,425)
Pay & Reward 1,194 1,074
Other 69 69
Investment income 582 295
Group Revenue from continuing activities 21,036 18,424
Adjusted EBITDA contribution from continuing activities by segment
Insurance 5,291 5,143
Benefits Platform 2,161 1,842
Pay & Reward 347 172
Other 623 299
Group admin and central costs (4,510) (4,449)
Charitable donations (50) (50)
Adjusted EBITDA from continuing activities 3,862 2,957
Depreciation (567) (471)
Amortisation (669) (383)
Interest (52) (22)
Share based payments expenses (80) (111)
Reorganisation Costs (244) -
Profit before tax from continuing activities 2,250 1,970
The revenue and net result generated by the Group's discontinued operating
segment is summarised as follows,
6 months 6 months
ended ended
30 June 2024 30 June 2023
Unaudited Unaudited
£'000 £'000
Revenue by Segment from discontinued activities
Other Owned Benefits 2,489 3,563
Group Revenue from discontinued activities 2,489 3,563
Adjusted EBITDA contribution from discontinued activities
Other Owned Benefits (200) (287)
Adjusted EBITDA from discontinued activities (200) (287)
Depreciation (34) (35)
Amortisation (14) (16)
Interest (1) (2)
Profit before tax from discontinuing activities (249) (340)
All income was derived from customers that are based in the UK.
4 Insurance service expenses
6 months ended 30 June 2024 6 months ended
30 June 2023
£'000 £'000
5,028 3,750
Claims incurred
Insurance operating expenses 3,642 3,480
(________) (________)
8,670 7,230
(________) (________)
5 Taxation
The tax expense recognised is based on the weighted average annual tax rate
expected for the full financial year multiplied by management's best estimate
of the taxable profit of the interim reporting period.
The Group's consolidated effective tax rate in respect of continuing
operations for the six-month period ended 30 June 2024 was 16.7% (six-month
period ended 30 June 2023: 15.5%). The tax charge recognised in the prior
period benefited from the application of the super-deduction capital
allowances tax relief, which ended on 31 March 2023.
6 Earnings per share and dividends
The weighted average numbers of outstanding shares used for basic and diluted
earnings per share are as follows:
6 months ended EPS 6 months ended EPS
30 June 2024 Pence 30 June 2023 Pence
Basic 31,223,218 5.4 31,230,807 4.5
Diluted 31,950,931 5.3 31,230,807 4.5
During the first six months of 2024 Personal Group Holdings Plc paid dividends
of £1,827,000 to its equity shareholders (2023: £1,656,000). This represents
a payment of 5.85p per share (2023: 5.30p).
6 months ended 6 months ended
30 June 2024 30 June 2023
£'000 £'000
Dividends paid or provided for during the period 1,827 1,656
( _____) ( _____)
7 Goodwill
Let's Connect Pay & Reward Total
£'000 £'000 £'000
Cost
At 1 January 2024 10,575 2,684 13,259
Additions in the period - - -
Disposals in the period - - -
(________) _______ (________) _______ (________)
At 30 June 2024 10,575 2,684 13,259
(________) _________ (________) _________ (________)
Amortisation and impairment
At 1 January 2024 10,575 - 10,575
Impairment charge for period - - -
Disposals in period - - -
(________) _________ (________) _________ (________) _________
At 30 June 2024 10,575 - (10,575)
(________) (________) (________)
Net book value at 30 June 2024 - 2,684 2,684
(________) (________) (________)
Net book value at 31 December 2023 - 2,684 2,684
(________) (________) (________)
8 Intangible assets
Let's Connect Customer Value Pay & Reward customer book and trade name Innecto Technology Computer software and development Internally Generated Computer Software WIP Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2024 1,648 1,063 298 2,323 506 2,948 8,786
Transfers - - - 2,806 - (2,806) -
Additions - - - 58 - 1,192 1,250
Disposals - - - - - - -
(________) (________) (________) (________) (________) (________) (________)
At 30 June 2024 1,648 1,063 298 5,187 506 1,334 10,036
(________) (________) (________) (________) (________) (________) (________)
Amortisation
At 1 January 2024 1,648 803 290 1,935 506 - 5,182
Amortisation charge for the period - 58 8 603 - - 669
Disposals in the period - - - - - - -
(________) (________) (________) (________) (________) (________) (________)
At 30 June 2024 1,648 861 298 2,538 506 - 5,851
(________) (________) (________) (________) (________) (________) (________)
Net book amount at 30 June 2024 - 202 - 2,649 - 1,334 4,185
(________) (________) (________) (________) (________) (________) (________)
Net book amount at 31 December 2023 - 260 8 388 - 2,948 3,604
(________) (________) (________) (________) (________) (________) (________)
9 Property, plant and equipment
Freehold land and properties Motor vehicles Computer Furniture fixtures & fittings Right of use Assets Total
equipment
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2024 5,037 53 1,491 2,210 1,916 10,707
Additions - - 63 - 460 523
Disposals - - (253) - (580) (833)
(______) (______) (______) (______) (______) (______)
At 30 June 2024 5,037 53 1,301 2,210 1,796 10,397
(______) (______) (______) (______) (______) (______)
Depreciation
At 1 January 2024 2,002 41 1,224 1,555 970 5,792
Provided in the period 43 5 109 80 330 567
Disposals - - (253) - (540) (793)
(______) (______) (______) (______) (______) (______)
At 30 June 2024 2,045 46 1,080 1,635 760 5,566
(______) (______) (______) (______) (______) (______)
Net book amount at 2,992 7 221 575 1,036 4,831
30 June 2024
(______) (______) (______) (______) (______) (______)
Net book amount at 3,035 12 267 655 946 4,915
31 December 2023
(______) (______) (______) (______) (______) (______)
10 Financial Investments
At 30 June 2024 At 31 December 2023
Unaudited Audited
£'000 £'000
Bank deposits 1,775 2,565
Equity investments 1,560 1,470
(________) (________)
3,335 4,035
(_________) (_________)
IFRS 13 Fair Value Measurement establishes a fair value hierarchy that
categorises into three levels the inputs to valuation techniques used to
measure fair value. The fair value hierarchy gives the highest priority to
quoted prices (unadjusted) in active markets for identical assets or
liabilities (Level 1 inputs) and the lowest priority to unobservable inputs
(Level 3 inputs)
· Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities
· Level 2: inputs other than quoted prices included
within Level 1 that are observable for the asset or
liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices)
· Level 3: inputs for the asset or liability that
are not based on observable market data (unobservable
input).
Bank deposits, held at amortised cost, are due within 6 months and the
amortised cost is a reasonable approximation of the fair value. These would be
included within Level 2 of the fair value hierarchy.
Equity Investments are held at fair value and are considered Level 1 financial
assets.
11 Disposal group classified as held for sale and discontinued operations
At the start of 2024 (following an ongoing strategy review), management
decided it would look to sell the Group's technology salary sacrifice division
("Let's Connect"). Consequently, assets and liabilities allocable to Let's
Connect were classified as a disposal group. Revenue and expenses, gains and
losses relating to the discontinuation of this subgroup have been eliminated
from the profit or loss from the Group's continuing operations and are shown
as a single line in the consolidated income statement.
On 10 July 2024, Let's Connect was sold for a total consideration of £2.0m on
a cash-free, debt-free basis.
6 months 6 months
ended ended
30 June 2024 30 June 2023
Unaudited Unaudited
£'000 £'000
Revenue 2,491 3,563
Operating expenses (2,738) (3,902)
(______) (______)
Loss from discontinued operations before tax (247) (340)
(______) (______)
Tax credit 62 85
(______) (______)
Loss for the period from discontinued operations (185) (255)
(______) (______)
The carrying amounts of assets and liabilities in this disposal group are
summarised as follows:
At 30 June 2024 At 31 Dec 2023
Unaudited Audited
£'000 £'000
Non-current assets
Intangible assets 36 50
Property, plant and equipment 74 105
Current assets
Trade and other receivables 796 7,143
Inventories 215 277
Cash and cash equivalents 598 64
(________) (________)
Assets classified as held for sale 1,719 7,639
Non-current liabilities
Deferred tax liabilities 12 12
Current liabilities
Trade and other payables 541 2,522
(________) (________)
Liabilities classified as held for sale 553 2,534
The table below shows the results of cashflows attributable to discontinued
operations for the six months ended 30 June 2024 and 30 June 2023.
6 months 6 months
ended ended
30 June 2024 30 June 2023
Unaudited Unaudited
£'000 £'000
Net cash from operating activities 586 58
Net cash from investing activities 4 (9)
Net cash from financing activities (56) 14
(________) (________)
Net increase in cash and cash equivalents from discontinued operations 534 63
(______) (______)
12 Long Term Incentive Plan (LTIP)
During the period, the Remuneration Committee granted a fourth tranche of
share awards under the existing LTIP Scheme approved on 6 April 2021. Further
details of the award can be found in the RNS announcement from 05 April 2024.
Under the scheme share options of Personal Group Holdings Plc are granted to
senior executives with an Exercise Price of 5p (nominal value of the shares).
The share options have various market and non-market performance conditions
which are required to be achieved for the options to vest. The options also
contain service conditions that
require option holders to remain in employment of the Group. The market and
non-market performance conditions are set out below.
Total Shareholder Return (Market condition)
50% of the awards vest under this condition. Subject to Compound Annual Growth
Rate (CAGR) of the Total Shareholder Return (TSR) over the Performance Period.
EBITDA Target (Non-market condition)
50% of the awards vest under this condition. Subject to cumulative EBITDA over
the Performance Period.
The fair value of the of the share options is estimated at the grant date
using a Monte-Carlo binomial option pricing model for the market conditions,
and a Black-Scholes pricing model for non-market conditions.
However, the above performance condition is only considered in determining the
number of instruments that will ultimately vest.
There are no cash settlements alternatives. The Group does not have a past
practice of cash settlement for these share options. The Group accounts for
the LTIP as an equity-settled plan.
In total, £69,000 of employee share-based compensation has been included in
the consolidated income statement to 30 June 2024 (2023: £99,000). The
corresponding credit is taken to equity. No liabilities were recognised from
share-based transactions. The remaining £11,000 (2023: £11,000) of
share-based compensation expense relates to the Company Share Option Plan
(CSOP).
13 Post balance sheet events
On the 10 July 2024, the Group disposed of the entire issued share capital of
its technology salary sacrifice division, Lets Connect IT Solutions Limited
("Let's Connect"), to SME HCI Limited (trading as The "Perkbox Vivup Group")
for a total up front cash consideration of £2.0m on a cash-free, debt-free
basis. In the six months to 30 June 2024, Let's Connect delivered a loss
before tax of £0.2m (six months to 30 June 2023: loss before tax of £0.3m).
14 Financial calendar for the year ending 31 December 2024
The Company announces the following dates in its financial calendar for the
year ending 31 December 2024:
· Preliminary results for the year ending 31 December
2024 - March 2025
· Publication of Report and Accounts for 2024
- March 2025
· AGM
- April/May 2025
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. END IR EAENDALFLEAARecent news on Personal group
See all newsREG - AIM - AIM Notice - 30/04/2025
AnnouncementREG - Personal Group - Exercise of Options, PDMR Dealing and TVR
AnnouncementREG - Personal Group - Holding(s) in Company
AnnouncementREG - Personal Group - Grant of LTIP
AnnouncementREG - Personal Group - AGM Notification
Announcement