REG - Personal Group - Trading Update and Notice of Results

Personal groupAnnouncement

25/01/2024 07:00

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RNS Number : 8327A  Personal Group Holdings PLC  25 January 2024

     25 January 2024

 

Personal Group Holdings plc

("the Company", "Personal Group" or "Group")

 

Trading Update and Notice of Results

Continued growth in recurring revenues and a record year for new insurance
sales

 

Personal Group (AIM: PGH), the workforce benefits and services provider, is
pleased to provide the following update for the financial year ended 31
December 2023 (FY 2023) and confirms that the Company expects to publish its
results for FY 2023, together with notification of its final dividend, on 19
March 2024.

 

Financial Highlights

 ·         Revenue of approximately £103m (2022: £86.7m) (£49m excluding voucher
           resales (2022: £49.3m) and adjusted EBITDA* of approximately £8m (2022:
           £6.0m), in line with market expectations
 ·         The Group continues to benefit from an increasing proportion of recurring
           revenues, providing high levels of visibility for 2024 and beyond:
           o                                        Total recurring revenue increased by c.14% to £38.3m (31 Dec 2022: £33.5m)
           o                                        Insurance Annualised Premium Income ("API") increased by c.13% to £31.6m (31
                                                    Dec 2022: £28.0m), driven by a record year for new annualised insurance sales
           o                                        Benefits Platform Annual Recurring Revenue ("ARR") increased c.22%. to £6.1m
                                                    (31 Dec 2022: £5.0m)
           o                                        Pay & Reward ARR increased c.6% to £0.57m (31 Dec 2022: £0.54m)
 ·         Strong balance sheet and liquidity with a cash position in excess of £20m as
           at 31 December 2023 (31 Dec 2022: £18.7m) and no debt

 

*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.

 

Operational Highlights

 

Paula Constant assumed the role of Group Chief Executive Officer on 1 August
2023 and is undertaking a review of the Group's strategy. The review is
focussed on identifying the greatest available opportunities to improve
profitability across the Group and drive longer term growth. The findings have
confirmed the demand for Personal Group's insurance product and highlighted
the industries where the largest growth opportunities exist for the Group. As
part of the Company's preparation for growth at pace, the Group's senior
leadership team is being restructured in order to optimise processes and drive
efficiencies.

 

Given the unfavourable economic backdrop, in which HR departments across the
country have had to manage a shortage of labour and increased employment
costs, it was pleasing that the Group's client base continued to grow through
the second half, collectively achieving 133 new client wins across the full
year (2022: 101). Continued progress against the Board's key strategic
objectives was also made; in particular, positive momentum across the
business' largest division - Affordable Insurance.

 

Affordable Insurance

 

Strong insurance sales continued into the second half, resulting in a record
year for new annualised insurance sales, with growth of 24% to £11.8m for the
full year (2022: £9.5m). This, alongside strong retention levels, which
remain above pre-pandemic averages, helped to drive up the API value to
£31.6m (31 Dec 2022: £28.0m).  Claims levels remained stable in the second
half but continue above historic norms on Hospital Cashplans, as expected and
in line with activity to address NHS backlogs.

 

Benefits Platform

 

Continued growth was seen in H2, across enterprise clients taking both Hapi
and Sage Employee Benefits, with each ending the year with ARR of £2.5m and
£3.7m respectively (31 Dec 2022: £2.0m and £3.0m). Following our investment
during the year into the next generation of our benefits platform, Hapi 2.0,
the platform was launched internally in H2. Initial feedback from customers
has been positive, as the platform continues to be developed ahead of
completion and external launch in 2024.

 

Whilst the economic challenges continued to impact the market demand, the
contribution from Pay & Reward, comprising Innecto and Quintige Consulting
Group, remained steady in the second half of the year, ending the year with
ARR of £0.57m (31 Dec 2022: £0.54m).

 

Contribution from Other Owned Benefits (Let's Connect) was in line with
management's expectations post cessation of the long-term scheme with a major
client in March 2023, as previously announced.

 

The Group also benefitted from increased investment returns on its cash
balances within the insurance business.

 

Outlook

 

Following the progress made in 2023, Personal Group is well positioned moving
forwards, bolstered by an increasing proportion of recurring revenue and a
strong balance sheet. Trading in the first few weeks of 2024 has been
positive, reinforcing confidence in ongoing delivery moving forward.

 

The first phase of the strategy review has served to highlight the
considerable market opportunity ahead for Personal Group and helped to
identify where the further growth opportunities for the Group exist. It has
also reaffirmed the strength of the Group's insurance offering, benefits
platform and brand. Confidence across the Company is high for 2024 and the
Group is well-placed to deliver ongoing growth acceleration.

 

Paula Constant, Chief Executive of Personal Group, commented:

 

"I am delighted to have assumed my role at Personal Group and I have been
pleased with my findings during the first few months of my tenure. The
financial results reported for the year are testament to the hard work of the
team who have worked at a relentless pace.

 

"The value of the Personal Group offering is clear, as supported by our record
new insurance sales and number of new client wins. Despite contending with a
challenging trading environment, we have achieved a robust financial
performance, with strong growth across our Affordable Insurance offering
alongside steady growth across other areas of the business.

 

"The findings of our strategy review will be presented in March and underline
the demand for our products and, whilst there will be much work ahead, I am
excited by the future opportunities."

 

 

 

 

-ENDS-

 

 

 

 

 

For more information please contact:

 

 Personal Group Holdings Plc
 Paula Constant (CEO) / Sarah Mace (CFO)               Via Alma

 Cavendish Capital Markets Limited
 Camilla Hume / Callum Davidson (Nomad)                +44 (0)20 7397 8900
 Jasper Berry (Sales)

 Alma Strategic Communications                         +44 (0)20 3405 0205
 Caroline Forde / Joe Pederzolli / Kinvara Verdon      personalgroup@almastrategic.com

 

 

Notes to Editors

 

Personal Group Holdings Plc (AIM: PGH) is a workforce benefits and services
provider. The Group enables employers across the UK to improve employee
engagement and support their people's physical, mental, social and financial
wellbeing. Its vision is to create a brighter future for the UK workforce.

Personal Group provides health insurance services and a broad range of
employee benefits, engagement, and wellbeing products. Its offerings can also
be delivered through its proprietary app, Hapi, and the recently developed
extension to the platform, Hapiflex.

The Group's growth strategy is centred around widening the footprint of the
business into the SME, talent-led & Public Sectors, thereby expanding the
addressable customer base. In addition, it aims to grow in its existing
industrial heartlands, to re-invigorate growth in insurance policyholders and
to drive the use of its SaaS offerings.

Group Clients include: Airbus, Barchester Healthcare, British Transport
Police, Merseyrail, Randstad, Royal Mail Group, The Royal Mint, the Sandwell
& Birmingham NHS Trust, Stagecoach Group plc, and The University of York.

For further information on the Group please see www.personalgroup.com
(http://www.personalgroup.com)

 

 

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