TIDMPGH
RNS Number : 0528G
Personal Group Holdings PLC
22 July 2021
22 July 2021
Personal Group Holdings plc
("the Company" or "Group")
Trading Update
Trading in-line with expectations; continued strategic
progress
Personal Group Holdings Plc (AIM: PGH), the workforce benefits
and services provider, is pleased to provide the following update
for the six months ended 30 June 2021. The Company expects to
publish its interim results, and notification of its H1 dividend,
on 21 September 2021.
Highlights:
-- Positive start to the year across all divisions with the
Company trading in-line with management expectations;
-- Revenues for the six months to 30 June 2021 were
approximately GBP34m (2020: 30.4m), driven primarily by increased
pass-through transactional spend via the Hapi platform
demonstrating high employee usage;
-- Adjusted EBITDA of approximately GBP4m (2020: GBP5.0m), reflecting change in revenue mix;
-- Strong balance sheet with a cash position of approximately
GBP22m as at 30 June 2021 (31 December 2019: GBP20.2m) and no debt;
and
Positive outlook with trading for the full financial year
anticipated to be in line with market expectations. The Board
believes that this performance, delivered despite Covid-19 related
restrictions continuing for the duration of the period, reflects
the strength of the Group's business model with its diverse streams
of recurring revenues and the strong demand for the Company's
offering.
Alongside the financial results, we have also progressed our
commitment towards becoming net carbon neutral over the next 10
years and installed solar panels at our Head Office in Milton
Keynes to support the Group's energy base load.
Operational Review
Insurance benefits
Hospital plan and death benefits policy provision
The first half of 2021 continued in a similar vein to the second
half of 2020, with retention rates for existing policyholders
remaining strong and claims ratios broadly in line with previous
years at approximately 23%. We are proud of the service that our
teams have provided over the last six months with all claims,
including Covid-19 related claims, paid out swiftly and in
full.
We were also pleased to have successfully secured a number of
new contract wins in the period, including home goods retailer
Homebase.
As expected, premium income was down around 15% on the same
period in previous year, reflecting the impact of significantly
reduced new insurance sales during 2020 as a result of our
inability to execute face-to-face new policy sales during the
pandemic. However, we are pleased to report that we have continued
to see strong policyholder retention rates. Where we have been able
to restart our face-to-face activity towards the end of H1 2021, we
have seen conversion rates equalling or exceeding pre-Covid levels.
The pandemic has brought health risks into focus, with the
importance of having healthcare provisions and life insurance in
place resonating more than ever. We observe that our corporate
clients are now keen to recommence our face-to-face visits with
their workforces, as well as the employees themselves being more
interested in taking up policies. Whilst still significantly down
on pre-Covid levels, policy sales in June 2021 were up 28% on May
2021, demonstrating this upward curve.
The new virtual insurance sales solution, introduced last year
when face-to-face meetings were largely impossible, has also
continued to deliver encouraging results. We will continue to offer
this format as it enables us to increase our reach and connect with
workforces in sites that would otherwise be difficult to
access.
As we move into the second half of the year, we are anticipating
a return of face-to-face activity towards pre-Covid levels and look
forward to reconnecting with workforces across our recent client
wins, which include Royal Mail Group, Kingfisher Group, and
Homebase, as well as our existing client base. This activity will
enable the rebuilding of our insurance book as we go into 2022 and
2023.
Consumer technology benefits
Provision of home technology via salary sacrifice
PG Let's Connect, our consumer technology benefits business,
delivered revenue up almost 20% on the same period last year, aided
by the catch up of some deferred 2020 schemes. We expect this trend
to continue looking forward, as customer demand for products
increases in line with general spending patterns. The profile of
trading in this division remains Q4 dominated.
The demand for a convenient, accessible way to purchase new
technology has remained a highly desirable benefit for a large
proportion of the UK workforce. This has been reflected in new
client wins, including North Yorkshire County Council, in the first
half as well as the ongoing engagement rates of existing
clients.
Trading in this division felt the effects of the scarcity of
certain electronic goods product lines due to global Covid-19
related supply chain disruption, particularly in relation to the
well-publicised global computer chip shortage. We expect this trend
to continue into H2 with margins broadly in line with 2020.
Supply-chain shortages notwithstanding, currently the Group has
been able to satisfy all demand and orders, with offering of
outdoor and fitness products proving a particular success in the
period.
Workforce engagement and benefits delivered via SaaS
Digital workforce benefits platforms
Pass-through transactional spend through the Hapi platform on
products such as e-vouchers and reloadable cards was particularly
strong in H1, up over 50% on the same period in 2020, reflecting
increased usage of the platform by registered card users. Recurring
revenue from platform subscriptions has remained stable.
Our pay and reward consultancy business, Innecto, delivered a
strong H1 performance. Its project pipeline has started to refill
as the HR community begins to turn their attention away from
Covid-19 related activity back to attracting, retaining and
motivating their employees and they have signed several new clients
including Avanti West Coast and Newcastle University. We therefore
expect this momentum to continue into the second half of the
year.
The Group's key strategic initiative to grow the SaaS division,
working with Sage, its partner in the SME sector, has progressed
with the continuation of free trial offers of Sage Employee
Benefits to Sage's customer base. Given the early success of the
offering, with robust levels of conversion to the paid offering,
Sage clients will now be marketed to using a free trial model on a
continuous basis.
Outlook
In 2021, employers are increasingly focused on supporting their
employees as they once again contend with a drastic overhaul of
working life, with government restrictions beginning to lift and
many employees returning to the workplace for the first time in 18
months. Personal Group's three divisions remain well placed to help
employers deliver on this goal.
As restrictions ease and face-to-face insurance sales resume,
the new client wins achieved last year will give us a 40% increase
in employees to connect with, all of whom have the ability to apply
for the Group's insurance products. Whilst we remain vigilant of
the potential impact from an increase in claims, however, none has
been noted so far, with rates generally in line with pre-pandemic
years. As such, when coupled with the resumption of face-to-face
sales, we remain confident in our prospects over the medium-term
and that trading for the full financial year remains in line with
market expectations.
With our strong balance sheet, quality customer base and leading
technology platform, we are well placed to capitalise on
opportunities that arise as employee health and wellbeing rises
further up the Board agenda and we look to the future with
confidence.
Deborah Frost, Chief Executive of Personal Group, commented:
"Against the backdrop of COVID I am extremely pleased with the
progress we have made across all our divisions in the first half of
the year. We have achieved a number of key clients wins and, as
workplaces start preparing to open up further, we have been
delighted to see strong demand for our in-person site visits from
corporate clients and potential policyholders alike. We now have a
strong pipeline of visits in place across H2 as our product
offering resonates now, more than ever before.
I would like to thank all our teams for the hard work that has
allowed us to continue to deliver on our core mission: to protect
the unprotected and connect the unconnected. We have seen employers
acknowledging the importance of this responsibility and working
hard to address their employees' needs, as well as a wider
recognition by the UK workforce of what they should expect from
their employers. In light of this and the progress outlined above I
have reason to look to the future with increased confidence."
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
-S-
For more information please contact:
Personal Group Holdings Plc
Deborah Frost (CEO) / Sarah Mace Via Alma PR
(CFO)
Cenkos Securities Plc
Camilla Hume / Callum Davidson
(Nomad) +44 (0)20 7397 8900
Russell Kerr (Sales)
Alma PR +44 (0)20 3405 0205
Susie Hudson / Caroline Forde personalgroup@almapr.co.uk
/
Harriet Jackson
Notes to Editors
Personal Group Holdings Plc (AIM: PGH) is a digitally enabled
workforce benefits and services provider. The Group enables
employers across the UK to improve workforce 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.
Many of these services are delivered through its proprietary app,
Hapi.
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.
Clients include: Arsenal FC, Barchester Healthcare, DHL Supply
Chain Limited, Merseyrail, Randstad, Royal Mail Group, the Sandwell
& Birmingham NHS trust and Stagecoach Group plc. c.40% of
clients are served by two or more Personal Group companies.
For further information, please see www.personalgroup.com
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END
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