22 July 2021
Personal Group Holdings plc
("the Company" or "Group")
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.
· 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 £34m (2020: 30.4m), driven primarily by increased pass-through transactional spend via the Hapi platform demonstrating high employee usage;
· Adjusted EBITDA of approximately £4m (2020: £5.0m), reflecting change in revenue mix;
· Strong balance sheet with a cash position of approximately £22m as at 30 June 2021 (31 December 2019: £20.2m) 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.
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.
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.
For more information please contact:
Personal Group Holdings Plc
Deborah Frost (CEO) / Sarah Mace (CFO)
Via Alma PR
Cenkos Securities Plc
Camilla Hume / Callum Davidson (Nomad)
+44 (0)20 7397 8900
Russell Kerr (Sales)
+44 (0)20 3405 0205
Susie Hudson / Caroline Forde /
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