TIDMHSD
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
GBP120.5m in PVNBP ("Present Value of New Business Premiums")
terms, down 30.3% from GBP173.0m in FY 2021;
-- New business for Q4 2022 was GBP24.8m, 49.8% lower than
GBP49.4m 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 GBP1.1bn as at 30 June 2022,
down from GBP1.2bn 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 Year ended
ended
30 June 30 June
2022 2021 % 2022 2021 %
Basis GBPm GBPm change GBPm GBPm 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 GBP10.3m, reflected in Q4 2021.
For the 2022 financial year, the change in assumptions had a
smaller increase of GBP2.5m, 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 GBPm GBPm change GBPm GBPm 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 GBPm GBPm change GBPm GBPm change
area
------------------------ ------ ----- -------- ------ ------ --------
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 GBP73.5m 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 GBP126.0m or 10.3% for similar reasons.
The following analysis shows the components of the movement in
AuA during the period:
Three months Year ended
ended
30 June 30 June
2022 2021 2022 2021
GBPm GBPm GBPm GBPm
----------------------------------------- -------- -------- -------- --------
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
GBPm GBPm
--------------------------------- --- -------- ------
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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END
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