8th Nov 2013 11:04
LONDON (Alliance News) - Hansard Global PLC Friday said it expects its second quarter results to be below last year's result after a large distributor ceased production.
Shares in the company were Friday down 6.7% at 104.00 pence.
The long-term savings provider said it had attracted higher levels of new business premiums, up 4.2% to GBP34.4 million on a like-for-like basis in the first quarter of 2014, but said that new business margins had been reduced to 10.0% from 10.7% in the first quarter of 2013.
"In conjunction with the appointment of our new Chief Distribution Officer we have been undertaking a thorough review of our new business strategy in order to diversify new business flows, reduce risk and increase the scale of our business. We will be making an announcement about this review in due course in 2014. We remain confident that we are well positioned in the growth markets for future sales," Gordon Marr, chief executive, said in a statement.
That said, Hansard Global said its profits after tax in the first quarter were marginally above those reported for the corresponding quarter last financial year, despite taking a GBP300,000 charge for redundancy costs, professional fees and other costs as part of the run-off plan for Hansard Europe.
But the savings provider said it has also reduced its expectations of future asset-based income streams as a result of "decreases in major capital market levels" in the first quarter.
Assets under management totalled GBP1.0 billion on September 30, down from GBP1.05 billion last year, with the savings provider citing currency movements, which dragged the figure down by GBP11.3 million, compared with an uplift of GBP27.6 million last year.
Litigation issues have been a source of concern for the company. It agreed a EUR1.5 million settlement in relation to a claim of approximately EUR5.5 million in Norway on June 21, and it said there are still a number of writs served upon its European division, totalling EUR4.6 million.
"The company continues to deal with a number of policyholder complaints and there can be no guarantee that such complaints will not turn into future litigation. However, the group does not provide investment advice and, accordingly, the board is of the view that these complaints have no merit and have not made any provision against them. We will continue to defend ourselves vigorously against all claims," Hansard Global said in a statement.
Hansard Europe is closed to new business.
By Samuel Agini; [email protected]; @samuelagini
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