30th Jan 2008 07:01
Hansard Global plc30 January 2008 Hansard Global plc New business results for the six months ended 31 December 2007 Hansard Global plc ("Hansard" or "the Group"), the specialist long-term savingsprovider, announces solid New business results for the six months ended 31December 2007. Highlights •New business results of £17.1m APE(1), for the six months ended 31 December 2007 are in line with the strong performance shown in the corresponding period(2) on a constant currency basis (2006: £17.2m) •New business margins on a present value of new business premiums ('PVNBP') basis have been maintained at 8.0% (2006: 8.0%) •New business flows using the Group's internal metric, 'Compensation Credit'(3), totalled £9.0m for the period, an increase of 9.8% over the six months ended 31 December 2006 on an actual currency basis •Continued strengthening of sales management team with three senior appointments in Moscow, Latin America and Central America •Assets under Administration at 31 December 2007 rose 7.8% over the period since 30 June 2007 to £1.22 billion (31 December 2006: £1.03 billion). Leonard Polonsky, Chief Executive of Hansard Global, commented: "The first half of the financial year has seen a good performance from theGroup, building on the solid progress we made in our first full year followingthe IPO, despite more challenging overall market conditions. We have maintainedour level of new business and expect first half profits to be ahead of lastyear. "We saw some effects of the volatile equity markets on our business, with singlepremium flows slowing down, although regular premium flows grew strongly. Thesetrends have continued into the first month of 2008. "The diversification of our assets under administration, our strong growth inemerging markets and lack of exposure to the UK and US markets have helped toprotect Hansard from the current financial market uncertainties. Solid New Business Flows The Group has achieved solid new business flows(4), at consistent margins,benefitting from the geographical spread of the intermediaries with whom wedeal, and the diversity of their client base. Strong growth in Regular premiumflows has been achieved, particularly in the Far East and Latin America, whileturbulent market conditions over the last quarter have had the impact ofreducing the flow of single premium cases as compared with the first quarter ofthis financial year. We continue to develop further institutional relationshipswith a view to building our distribution and expanding the range of investmentopportunities for Policyholders. The continued strengthening of sterling against the US Dollar in the first fourmonths of the period has had the effect of depressing a proportion of our newbusiness figures, as approximately 50% of new business in the period continuesto be received in US Dollars. The Group has developed a measure of calculating new business production that isdesigned to indicate the relative value of each piece of new business. Thismeasure is called Compensation Credit ('CC'). The Directors consider CC to be amore meaningful measure of new business volume than APE, which has limitedcorrelation with the profitability of new business. The Company will continue toreport new business volumes on an APE basis but will also report using the CCdata that it uses to manage its sales operations. • APE New business premiums on an APE basis(1), in sterling terms(1), during the sixmonths to 31 December 2007 totalled £17.1m. This represents a decrease of 0.6%over the £17.2m APE in the corresponding period in the previous financial year,calculated on a constant currency basis. Strong growth of 11.9% in Regularpremium flows has been achieved, particularly in the Far East and Latin America. Difficult market conditions in Europe and Scandinavia in the quarter ended 31December 2007, as compared with those of the corresponding period, have resultedin a significant reduction in Single Premiums. Single Premium APE in the periodwas £7.7m, compared with £8.8m. • Compensation Credit New business flows using the Group's internal metric, Compensation Credit(3),totalled £9.0m for the six months to 31 December 2007 compared with £8.2m (on anactual currency basis) in the comparative period of the last financial year, anincrease of 9.8%. Compensation Credit ("CC") is an indication of new business activity that isused by the Group to manage its business. CC measures the relative value of eachpiece of new business to allow the Group to maintain margins and protectcapital. •Present Value of New Business Premiums New business margins were 8.0 % on the PVNBP basis, consistent with thecorresponding period and levels achieved historically. These margins are wellabove industry average, principally due to the Group's continued focus on value. Recruitment of Account Executives With effect from 4 January 2008, three new Account Executives (senior salesexecutives) took up positions in Moscow, Latin America and Central America toprovide new distribution capability for the Group in new markets, and tostrengthen existing relationships. This recruitment is in accordance with theGroup's strategy of doubling the number of Account Executives by December 2012. Growth in Assets under Administration The value of Assets under Administration as at 31 December 2007, at £1.22 bn,has risen by 7.8% since 30 June 2007 on an actual currency basis. Despite thedeclines in capital markets over the period and the weakness of US Dollaragainst Sterling, the value of assets under administration has continued togrow. This reflects positive cash flows and the ability of Policyholders torotate assets held within policy contracts, which has reduced the level ofwithdrawals relative to those experienced by retail funds in the last fewmonths. Since 31 December 2006, Assets under Administration have grown by 17.7%on an actual currency basis. FTSE Index constituent The Company is pleased to have been considered eligible for inclusion in theUK-Series of the FTSE ALL-SHARE index with effect from 24 December 2007. Thecompany is also a constituent of the following indices: FTSE All-Share exInvestment Trusts; FTSE Small Cap; and FTSE Small Cap Ex Investment Trusts. Polar Cap Limited Polar Cap Limited, the former holding company of the Group, has been placed involuntary liquidation in accordance with the timeframe established at the timeof the listing. All shares held by Polar Cap were distributed to itsshareholders during 2007. There was no change to the number of shares of HansardGlobal in existence as a result of the wind-up. Results for the half-year ended 31 December 2007 Results for the half-year ended 31 December 2007 are expected to be announced on28 February 2008. The results will be prepared using International FinancialReporting Standards for the first time. There are not expected to be significantdifferences between profits and retained earnings calculated on the basis of UKGAAP, and those as at 31 December 2007, calculated on the basis of IFRS. For further information Hansard Global Leonard Polonsky, Chief Executive 01624 688000Gordon Marr, Director 01624 688000 Bell Pottinger 020 7861 3232 Ben WoodfordDaniel de Belder HANSARD GLOBAL PLC NEW BUSINESS RESULTS FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2007 1. APE on a Constant Currency Basis Unaudited Six months ended 31 December 2007 2006 Change £m £m %New Business Premiums APE)(1)(2)Regular 9.4 8.4 11.9%Single 7.7 8.8 (12.5)% 17.1 17.2 (0.6)% New Business Premiums (APE)(1)(2)(4)EU and EEA 6.0 7.2 (16.7)%Far East 6.0 4.4 36.4%Latin America 2.6 2.1 23.8%Rest of World 2.5 3.5 (28.6) % 17.1 17.2 (1.1)% 2. APE on an Actual Exchange Rate basis Unaudited Six months ended 31 December 2007 2006 Change £m £m %New Business Premiums (APE) (1)Regular 9.4 8.7 8.0 %Single 7.7 8.6 (12.4)% 17.1 17.3 (1.2)% New Business Premiums (APE)(1)(4)EU and EEA 6.0 6.9 (13.0)%Far East 6.0 4.6 30.4%Latin America 2.6 2.3 13.0%Rest of World 2.5 3.5 (28.6) % 17.1 17.3 (1.2)% NEW BUSINESS RESULTS FOR THE THREE MONTH PERIOD ENDED 31 DECEMBER 2007 1. APE on a Constant Currency Basis Unaudited Three months ended 31 December 2007 2006 Change £m £m %New Business Premiums (APE)(1)(2)Regular 4.9 4.5 8.6 %Single 3.3 6.3 (50.5)% 8.2 10.8 (26.2)% New Business Premiums (APE)(1)(2)(4)EU and EEA 2.6 5.1 (48.8)%Far East 2.9 2.4 23.3 %Latin America 1.5 1.0 51.1 %Rest of World 1.2 2.3 (51.1)% 8.2 10.8 (24.3)% 2. APE on an Actual Exchange Rate basis Unaudited Three months ended 31 December 2007 2006 Change £m £m %New Business Premiums (APE)(1)Regular 4.9 4.5 8.9 %Single 3.3 6.1 (48.6)% 8.2 10.6 (22.6)% New Business Premiums (APE)(1)(4)EU and EEA 2.6 4.8 (44.9)%Far East 2.9 2.5 18.8 %Latin America 1.5 1.0 43.5 %Rest of World 1.2 2.5 (53.6)% 8.2 10.6 (23.7)% HANSARD GLOBAL PLC ASSETS UNDER ADMINISTRATION AS AT 31 DECEMBER 2007 Unaudited Unaudited Audited As at As at As at 31 31 30 December December Change June 2007 2006 2007 £m £m % £mAssets under Administration 1,218 1,035 17.7 1,130(5) Notes (1) New business from long-term savings is calculated on an APE basis inaccordance with the life assurance industry convention by adding new regularpremiums and one tenth of single premiums. Premiums arising in foreigncurrencies are translated to sterling at the rates of exchange ruling at thetransaction date. (2) APE in the period ended 31 December 2006 is presented above on a constantcurrency basis. Premiums arising in foreign currencies in the period aretranslated to sterling at the average rates of exchange applicable to the periodended 31 December 2007. The principal exchange rates applied are: £1 = $2.034and £1 = €1.44. (3) New business from long-term savings is calculated on an CC basis inaccordance with the Group's internal metrics. CC is an indication of newbusiness activity that is used by the Group to manage its business. CC measuresthe relative value of each piece of new business to allow the Group to maintainmargins and protect capital. (4) The geographical split of new business premiums is based on the country ofresidence of the policyholder. (5) Assets under Administration are valued at market values at the relevantdate, using closing exchange rates against sterling. The principal exchangerates applied at 31 December 2007 are: £1 = $1.99 and £1 = €1.36 (31 December2006: £1 = $1.96 and £1 = €1.48). Notes to editors: • Hansard Global plc is the holding company of the Hansard Group of companies. The Group is a specialist long-term savings provider, based in the Isle of Man.The Company was listed on the London Stock Exchange on 18 December 2006. • 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 low-cost distribution model by selling policies exclusively through a network of financial services intermediaries, independent financial advisers and the retail operations of certain financial institutions (collectively "Intermediaries"), who provide access to their clients in more than 170 countries. The Group's distribution model is supported by an award-winning, multi-language internet platform, and is scaleable. • The principal geographic markets in which the Group currently services Intermediaries and policyholders are the Far East, the Middle East, and Latin America in the case of Hansard International Limited, and Western Europe in the case of Hansard Europe Limited, the Group's two life assurance companies. • The Group's objective is to grow its business by attracting new business and positioning itself to adapt rapidly to market trends and conditions. The scaleability 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 tocertain of Hansard Global plc's plans and its current goals and expectationsrelating to future financial condition, performance and results. By their natureforward-looking statements involve risk and uncertainties because they relate tofuture events and circumstances which are beyond Hansard Global plc's control.As a result, Hansard Global plc's actual future condition, performance andresults may differ materially from the plans, goals and expectations set out inHansard Global plc's forward-looking statements. Hansard Global plc does notundertake to update forward-looking statements contained in this announcement orany other forward-looking statement it may make. No statement in thisannouncement is intended to be a profit forecast or be relied upon as a guidefor future performance. 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