RESULTS FOR THE YEAR ENDED 30 JUNE 2022
Dividend maintained in challenging year for new business
Hansard Global plc (“Hansard” or “the Group”), the specialist long-term savings provider, issues its full-year results for the year ended 30 June 2022 (“FY 2022”).
New business sales – PVNBP 1 basis
IFRS profit before tax
Recommended final dividend per share 2
IFRS earnings per share
Assets under Administration
Value of In-Force
1 Present Value of New Business Premiums
2 Subject to approval at the AGM
GRAHAM SHEWARD, GROUP CHIEF EXECUTIVE OFFICER, COMMENTED:
“Our results for the 2022 financial year reflect a challenging year for new business together with £1.0m of provisions made at the time of our half-year results to write-down all amounts receivable from a set of external legacy funds in liquidation.
We are 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.
We are also making encouraging progress with additional distribution options for our Japanese proposition.
Excellent progress has been made with our major systems project to replace our policy administration system and portals which will support our next generation of products whilst realising associated cost and efficiency gains.
Given the underlying strength of the business as we manage through this cycle, the Board has recommended maintaining our dividend in line with last year.”
As previously announced, our new business levels were £120.5m on a Present Value of New Business Premiums (“PVNBP”) basis, down 30.3% from £173.0m in FY 2021.
New business 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, particularly those with contractual regular premiums. The prior year comparative figures also benefited from a number of high net-worth single premium policies which did not repeat in FY 2022.
We have taken a number of actions to improve new business generation. 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.
The expanded sales team will drive a number of broker and product initiatives to increase new business in the 2023 financial 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.
IFRS profit before tax for the year was £3.8m, down from £5.1m in FY 2021. Excluding litigation defence costs and other non-recurring provisions, underlying profit was £5.9m compared with £6.8m in FY 2021.
Fee and commission income was £48.8m for the year (FY 2021: £50.5m) with lower transactional based income in Hansard International and lower income from Hansard Europe which continues to run-off since closing to new business in 2013.
Administrative and other expenses were £29.8m for the year (FY 2021: £29.5m) as a £1.0m provision for amounts receivable from a set of legacy funds in liquidation was mitigated by lower litigation-related expenditure and tight management of overheads, despite inflationary pressures.
VIF represents the present value of expected future shareholder profits less the present value cost of holding capital required to support the in-force business. VIF totalled £128.5m as at 30 June 2022 compared to £145.8m at 30 June 2021 reflecting new business levels being lower in volume and profitability than the unwind of older business written and lower assets under administration.
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 latter part of the year.
During the past financial year the primary focus has continued to be on delivering our two most significant near-term strategic initiatives:
- bringing to market our locally-licensed investment product in Japan; and
- upgrading and streamlining our systems and IT infrastructure.
As previously noted, we have completed internally the development of our Japanese product. Whilst the timetable for launching with our first distribution partner in Japan remains unclear despite vigorous efforts, additional forward-looking strategic and tactical product developments commenced in earnest earlier this year, with a view to mitigating the impact of this delay. These revenue accretive initiatives are progressing well.
Positive progress has been made with our major systems project to replace our policy administration system and portals to support our next generation of products and secure significant cost and efficiency gains. The primary core system functionality has now been delivered and we are working through the final project stages which will allow us to implement a full migration from our legacy systems in 2023.
The Group continues to manage carefully its litigation exposures relating to the legacy operations of Hansard Europe. We continue to believe we have strong defences against the claims being made.
Contingent liabilities arising out of outstanding writs were £21.2m as at 30 June 2022 compared to £22.7m at 30 June 2021. The exposure has fallen from the prior year primarily due to the settlement of a significant case which was covered by our corporate insurance and which reduced contingent liabilities by £2.9m.
In addition, the Group successfully defended 24 cases during the year with net exposures of approximately £3.2m, 11 of which have been appealed by the plaintiffs. These successes continue to affirm confidence in the Group’s legal arguments. 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.
The Board has proposed a final dividend of 2.65p per share, the same level as last year.
This dividend, if approved by the shareholders at the Annual General Meeting on 2 November 2022, represents a total dividend of 4.45p (2021: 4.45p) per share in respect of the financial year. Upon approval, the dividend will be paid on 10 November 2022 to shareholders on the register on 30 September 2022. The associated ex-dividend date is 29 September 2022.
New business levels to date in Q1 FY 2023 are broadly in line with those of the prior year. There have been no significant post balance sheet events to report.
NEXT TRADING UPDATE
The first trading update in respect of the year ending 30 June 2023 is expected to be published on 3 November 2022.
FOR FURTHER INFORMATION:
|Hansard Global plc
Graham Sheward, Group Chief Executive Officer
Tim Davies, Chief Financial Officer
|+44 (0) 1624 688 000
Ben Woodford, Hugo Liddy
|+44 (0) 7990 653 341
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 often without the need for significant further investment.
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.
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