Hansard Global : Results for the year ended 30 June 2021

23 September 2021

Hansard Global plc

Results for the year ended 30 June 2021

Profit and earnings per share up 9% and 13% respectively, dividend maintained

Hansard Global plc ("Hansard" or "the Group"), the specialist long-term savings provider, issues its results for the year ended 30 June 2021 ("FY 2021").

Summary

		FY 2021	FY 2020	% Change
	New business sales - PVNBP 1 basis	£173.0m	£159.8m	+8%
	IFRS profit before tax	£5.1m	£4.7m	+9%
	Underlying profit	£6.8m	£6.2m	+10%
	Recommended final dividend per share 2	2.65p	2.65p	Unchanged
	IFRS earnings per share	3.6p	3.2p	+13%
	As at	30 June	30 June
		2021	2020
	Assets under Administration	£1.22bn	£1.08bn	+13%
	Value of In-Force	£145.8m	£147.9m	-1%
1	Present Value of New Business Premiums
2	Subject to approval at the AGM

Graham Sheward, Group Chief Executive Officer, commented:

"I am pleased to present Hansard's full year results for the 2021 financial year. Our new business, profit before tax and assets under administration were all up compared to FY 2020 despite the on-going challenges presented by Covid-19. I would like to thank all our employees and distribution partners for their hard work and resilience in delivering this result.

We have continued to make progress with our strategic initiatives although the launch of our proposition in Japan is subject to the lifting of the current Covid-related restrictions. Once these are lifted, we believe this initiative can deliver significant growth for the Group.

Given these results and our current financial outlook, we are delighted to be in a position to maintain our dividend in line with last year."

Legal Entity Identifier: 213800ZJ9F2EA3Q24K05

NEW BUSINESS

As previously announced, our new business levels were £173.0m on a Present Value of New Business Premiums ("PVNBP") basis, 8.3% higher than FY 2020. Each of our regions achieved positive growth as we saw increased levels of high net worth contributions being made.

TRADING RESULTS

IFRS profit before tax for the year was £5.1m, up 8.5% from £4.7m in FY 2020. Excluding litigation defence costs and other non-recurring provisions, underlying profit was £6.8m compared with £6.2m in FY 2020.

Fee and commission income was £50.5m for the year (FY 2020: £49.5m) as increased fee income in Hansard International offset lower fee income in Hansard Europe which continues to run-off since closing to new business in 2013.

Administrative expenses, exclusive of litigation and non-recurring items, were £22.5m (FY 2020: £23.0m). Investment in our Japanese branch was offset by prudent cost management across a range of areas.

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 £145.8m as at 30 June 2021 compared to £147.9m at 30 June 2020.

While positive on a marginal cost basis, New Business Margin calculated on an EEV basis was negative 0.5% for the year as compared to negative 0.1% in FY 2020. This was primarily due to business mix and changes in economic and operating assumptions. We expect the primary drivers for margin improvement to be a successful launch of our new product into the Japanese market and the cost savings that will follow the implementation of our new IT systems.

STRATEGY IMPLEMENTATION

During the past financial year, the primary focus has continued to be on our two most significant near-term strategic initiatives:

• Bringing to market our locally-licensed investment product in Japan; and
• Upgrading and streamlining our administration systems and IT infrastructure.

We have completed the internal development of our Japanese product. In order to launch with our first distribution partner, we are dependent on the Covid-19 restrictions in Japan being lifted. It is our strong intention to go to market before the end of 2021. We continue to expect this initiative to deliver significant growth in the 2022 financial year.

Our new systems are ready to on-board new business from the Japanese product and we continue to work on enabling it for our existing products and ultimately for a full migration by the end of 2022.

DIVIDENDS

The Board has proposed a final dividend of 2.65p per share, the same level as last year. The Board considers this a prudent decision in the current environment.

This dividend, if approved by the shareholders at the Annual General Meeting on 3 November 2021, represents a total dividend of 4.45p (2020: 4.45p) per share in respect of the financial year. Such dividend will be paid on 11 November 2021 to shareholders on the register on 1 October 2021. The associated ex-dividend date is 30 September 2021.

POLICYHOLDER LITIGATION

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.

Exposures from outstanding writs were £22.7m at 30 June 2021 compared to £23.4m at 30 June 2020. Settlement provisions of £0.4m (2020: £0.1m) have been made as at 30 June 2021 where we expect to make settlements for lower value cases.

During the year, the Group successfully defended sixteen cases with net exposures of approximately £1.6m (2020: nine cases with net exposures of approximately £0.6m), ten of which have been appealed by the plaintiffs. These successes 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.

CURRENT TRADING

New business levels to date in Q1 FY 2022 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 2022 is expected to be published on 4 November 2021.

For further information:
Hansard Global plc	[phone]
Graham Sheward, Group Chief Executive Officer
Tim Davies, Chief Financial Officer
Email: [e-mail]
Camarco	[phone]
Ben Woodford, Hugo Liddy

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.

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

Chairman's Statement

I am delighted to present to you my first annual report as Chairman of Hansard Global plc ("Hansard" or "Group"). As mentioned at the half year, I wish to formally thank Philip Gregory for his previous chairmanship, leadership and guidance provided to the Group over the past 9 years.

In March our CEO, Gordon Marr, decided he wished to retire after a 33-year career with Hansard. I would like to similarly thank Gordon for his many years' service and commitment to the Group. Having overseen the successful acquisition of our licence in Japan, Gordon leaves Hansard well-positioned for the future. Our new CEO, Graham Sheward, joined us in May and is working well with me and the whole Board to build on Hansard's long-term legacy and deliver the next phase of the Group's development and growth.

I also welcome David Peach to our Board as an additional independent non-executive director and Chairman of our Audit Committee.

New business

New business for the 2021 financial year ("FY 2021") improved to £173.0m (in Present Value of New Business Premiums ("PVNBP") terms), up 8.3% from the FY 2020 figure of £159.8m.

This was a significant success given the continuing challenges of Covid-19 and associated restrictions on travel and meeting with customers and distribution partners. We have seen Hansard's on-line model and ability to accept business electronically as a strong factor in maintaining new business levels.

Financial performance

Our IFRS profit before tax for the year was £5.1m, up from £4.7m in 2020.

Fees and commissions were up £1.0m to £50.5m for the year (2020: £49.5m), reflecting a number of factors, including strong growth in assets under management.

Origination costs to acquire new business were down £1.6m to £16.4m, reflecting strong cost control over our new business activities while significant uncertainty existed around the impact of Covid-19.

Administration costs were up £0.2m to £29.5m. This reflects our continued investment in our Japanese branch and in our project to replace our policy administration systems. We have sought to offset these additional costs by prudent cost control and savings in other areas.

Litigation defence activity continued to be active with significant costs incurred during the year, primarily in Italy, Belgium and Germany. These costs, together with provisions for future settlements, totalled £1.9m compared to £1.3m in 2020.

Further detail and analysis is contained in the Business and Financial Review.

Japan

As noted in our 2020 Annual Report, the key to significantly increased new business lies in our ability to take advantage of the opportunity we have developed in Japan.

During the 2021 financial year we concluded the development of our innovative new product for the Japanese market. This is ready to launch on our newly implemented administration system, bringing a highly-advanced platform that will benefit our customers, our distribution partners and our own operational efficiency.