Hansard Global plc HSD Interim Management Statement

  Hansard Global plc (HSD) - Interim Management Statement

RNS Number : 7123Q
Hansard Global plc
09 November 2012






9 November 2012

                              Hansard Global plc

                         Interim Management Statement

Hansard Global plc ("Hansard" or "the Group"), the specialist long-term
savings provider, issues its Interim Management Statement for the period from
1 July 2012 to date. All figures refer to the three months ended 30 September
2012 ("Q1 2013"), except where indicated.

Summary

·Overall new  business  margin  of  10.7% (Q1  2012:  9.7%)  reflects  the 
continued increase in the proportion of regular premium business, in line with
the Group's stated strategy;

·Regular premium new business flows remain resilient: £30.3m PVNBP in  the 
quarter (Q1 2012: £33.9m), arising primarily from the growth market of the Far
East;

·Single premium flows  of £8.8m have  reduced from £10.6m  received in  Q1 
2012. This reflects the  impact of volatile markets,  which are affecting  the 
timing of investment decisions and the  Group's strategy of focussing on  more 
profitable regular premium new business;

·Through profitable new business and improved market conditions, EEV at 30
September 2012 has increased marginally from £224.3m at 30 June 2012;

·The value of  Assets under  Administration as  at 30  September 2012  has 
increased to £1.05bn (30 June 2012: £1.03bn);

·From 1 January 2013  Gordon Marr will assume  the position of Group  CEO, 
whilst the  Group's  founder, Dr  Leonard  Polonsky,  will take  the  role  of 
non-executive Chairman.

Leonard Polonsky, Chairman of Hansard Global plc, commented:

"Whilst new business  levels are below  those of the  comparative period,  the 
investment in distribution relationships means  that the Group is well  placed 
for continued growth in new  business for the remainder  of the year and  over 
the longer term, despite current economic uncertainties.



I congratulate Gordon on his forthcoming appointment as Group Chief  Executive 
Officer. For  some  time I  have  been  considering separating  the  roles  of 
Chairman and Chief Executive. I see this as important for achieving Hansard's
ambitions in the future. This development will enable Gordon to focus on  the 
execution of Hansard's  strategy during the  next phase of  our growth, and  I 
remain committed to  supporting Gordon  and the Board  in my  new capacity  of 
non-executive Chairman."



For further information:

Hansard Global
plc 
+44 (0) 1624 688000

Leonard Polonsky, Chairman

Gordon Marr, Managing Director

Vince Watkins, Chief Financial Officer



Pelham Bell
Pottinger
+44 (0) 20 7861 3232

Daniel de Belder 
 


Hansard Global plc



INTERIM MANAGEMENT STATEMENT



OVERVIEW

Despite continued  volatility  in  global  markets in  the  quarter  ended  30 
September 2012  (Q1 2013),  new business  levels remain  resilient.  Hansard's 
strategy to acquire more profitable regular premium new business continues  to 
be rewarded. Whilst  overall new  business levels  of £39.1m  PVNBP are  12.1% 
lower than a  very strong  comparative quarter  last year  (Q1 2012),  regular 
premium flows of £30.3m are buoyant and represent a 78% increase over Q1 2011.
New business flows since 30 September 2012 have been higher than those of  the 
same period last year on the Group's internal metric.

New business margins on the PVNBP basis have risen to approximately 10.7%  (30 
June 2012: 9.6%), primarily as a result of an increased proportion of  regular 
premium new business.

We believe that our strategic decision to focus on non-EU markets, and the Far
East and Latin America in particular, has been vindicated given the continuing
instability in the eurozone.

Increases in capital market values in  the quarter have been reflected in  the 
increases in  value of  policyholder Assets  under Administration  and in  the 
Group's embedded value at 30 September 2012, when compared with 30 June 2012.

BoaRd Changes

The Board has  agreed that Gordon  Marr will  assume the role  of Group  Chief 
Executive Officer with effect from 1 January 2013. Dr Polonsky will remain  as 
Chairman of the  Board, with  his role  becoming non-executive.  Mr Marr  will 
chair the Group's Executive Committee from 1 January 2013.

As previously reported, Philip Gregory, an Independent Non-Executive Director,
took  over  the  roles  of  Senior  Independent  Director,  Chairman  of   the 
Remuneration Committee and Chairman of the Nominations Committee from  Bernard 
Asher with effect from 24 September 2012.



FINANCIAL PERFORMANCE AND POSITION - 3 MONTHS TO 30 SEPTEMBER 2012

· International Financial Reporting Standards ("IFRS")

During the period, the Group has continued to invest in distribution and other
infrastructure and to  generate IFRS  profits backed by  strong positive  cash 
flows. Income streams remain stable and are in line with Q1 2012. Profit after
tax for Q1  2013 is marginally  above Q1  2012 which reflects  a reduction  in 
unrealized foreign  exchange losses  from those  incurred in  the  comparative 
period.

· European Embedded Value ("EEV")

EEV operating profit continues to be generated through profitable new business
written during  the period,  the persistency  of cash  flows and  the lack  of 
option instruments,  guarantees or  other such  features within  the  products 
issued by  the Group.  The effect  of the  increases in  major capital  market 
levels in Q1 2013 has been to increase our expectations of future  asset-based 
income streams and therefore to contribute to a marginal improvement in EEV at
30 September 2012, when compared with 30 June 2012.

· Capitalisation and Solvency

The Group  continues  to  be  strongly  capitalised  enabling  it  to  satisfy 
operational, regulatory,  intermediary and  policyholder expectations.  At  30 
September  2012  the  aggregate  minimum  regulatory  margin  remains  covered 
approximately 14 times by the Group's capital resources.

The  Group's  solvency  position  is   well  insulated  against  the   current 
challenging capital market conditions. At the date of this report, the Group's
liquid assets  are held  with a  wide  range of  deposit institutions  and  in 
highly-rated money market liquidity funds.

New Business Flows - THREE months ended 30 September 2012

New business flows for  Q1 2013 are summarisedas  follows (comparisons to  Q1 
2012 are on actual currency basis):

                                       Q1 2013 Q1 2012       %
Basis                                       £m      £m  change
Compensation Credit                        3.9     4.3  (9.3)%
Present Value of New Business Premiums    39.1    44.5 (12.1)%
Annualised Premium Equivalent              6.0     6.7 (10.4)%



· Present Value of New Business Premiums ("PVNBP")

In line with the Group's strategy to acquire regular premium new business from
the growth markets  of the  Far East and  Latin America,  regular premium  new 
business levels in  the quarter  of £30.3m constitute  some 78%  of total  new 
business (Q1 2012: 76%). This has  been achieved despite the volatile  market 
conditions during  the  quarter which,  among  other factors,  has  restrained 
single premium investments.

This increased proportion of regular  premium new business has contributed  to 
an increase in new business margins to 10.7% (Q1 2012: 9.7%).

Reflecting the strategic  focus on regular  premium business, volatile  market 
conditions and  deferred  investor  appetite for  lump-sum  investing,  single 
premium new business levels of £8.8m remain lower than the levels of the  last 
few quarters and are 17% below Q1 2012.

                      Q1 2013 Q1 2012       %
PVNBP by Premium type      £m      £m  change
Regular premium          30.3    33.9 (10.6)%
Single premium            8.8    10.6 (17.0)%
                         39.1    44.5 (12.1)%











                                   Q1 2013 Q1 2012       %
PVNBP by residence of policyholder      £m      £m  change
Far East                              19.6    16.4   19.5%
Latin America                          7.0    13.1 (46.6)%
EU and EEA                             8.6     9.9 (13.1)%
Rest of world                          3.9     5.1 (23.5)%
                                      39.1    44.5 (12.1)%



Despite recent economic weaknesses in Latin America, over 68% of new  business 
in the period is sourced from the Far East and Latin America regions (Q1 2012:
66%). We launched  a new  regular premium product  in Latin  America in  early 
October with a view  to recapturing interest  from selected intermediaries  in 
that region. We remain confident that  we can build on existing  relationships 
to enhance new business flows.

· New business margins

The Group's strategy is to focus on generating new single and regular  premium 
business on terms that meet target  returns and contribute to profit. The  new 
business margin is sensitive to  the product mix. As  a result of the  higher 
regular premium component of new business issued in the period, which is  more 
profitable to the Group than single premium business, the overall new business
margin is approximately 10.7% (Q1 2012: 9.7%).

HANSARD ONLINE

The Group is continuing  to develop Hansard OnLine  in order to implement  new 
business initiatives. In particular, over  4,500 regular premium new  business 
cases have been  processed online  by the  Group since  piloting commenced  in 
November 2009, and  approximately 70% of  investment dealing transactions  are 
currently processed OnLine (an increase from 60% in June this year).

Assets under Administration

A continued flow  of regular  premiums underpins  Assets under  Administration 
("AuA") and are reflected in an increase of 1.3% in AuA since 30 June 2012  to 
£1.05bn.

The overall movement in AuA before market and currency effects illustrates the
group's  focus  on  higher  margin,  regular  premium  new  business.  Future 
withdrawals from matured  existing single  premium contracts  are expected  to 
continue, with  new regular  premium contracts  replenishing AuA  at a  slower 
rate. We believe  that moving  the balance  of new  business towards  regular 
premium contracts will be value enhancing in the longer term.

                                           Unaudited
                                        Q1 2013 Q1 2012
                                             £m      £m
Deposits to investment contracts           29.0    33.7
Withdrawals from contracts and charges   (42.8)  (48.4)
Effect of market and currency movements    27.6 (151.1)
Increase in period                         13.8 (165.8)
At 1 July                               1,033.8 1,229.6
Assets under Administration             1,047.6 1,063.8

There have been no significant  changes since the year  end in the volumes  of 
illiquid assets or impaired fund structures  held in AuA, nor in the  currency 
composition of AuA.

LITIGATION AND POLICYHOLDER COMPLAINTS

Even though the Group does not give any investment advice, we havebeen subject
to a  number of  policyholder  complaints in  relation  to the  selection  and 
performance of assets linked to policies. Writs totalling €4.3m (approximately
£3.5m) were  served on  Hansard Europe  Limited during  the period  since  the 
balance sheet date and to the date  of this report. At time of writing,  writs 
totalling approximately £11.5m have been  served on that company. We  estimate 
that current complaints may  result in an additional  £9m of legal actions  in 
due course.

We remain confident that  we will be successful  following our appeal  against 
the initial ruling in  the Norwegian litigation  and we anticipate  continuing 
additional expenditure to address this and other cases.

Based on the  pleadings and  advice received to  date from  legal counsel  the 
Group has  not made  any provision  in respect  of any  complaints. The  Group 
intends to defend itself against all claims strenuously.

Results for the half-year ENDING 31 December 2012

New business results for the half-year ending 31 December 2012 are expected to
be announced  on  29 January  2013.  Trading  results for  the  half-year  are 
expected to be announced on 28 February 2013.

Outlook

We are optimistic that the Group's  focus on non-EU markets including the  Far 
East  and  Latin  America  and  our  continuing  investment  in   distribution 
infrastructure, systems  and  Hansard OnLine,  will  position us  for  further 
growth.



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 low-cost  distribution model  by selling  policies 
exclusively through  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 
scaleable.

· The principal geographic  markets in which  the Group currently  services 
financial advisors and policyholders are the  Far East, Latin America and  the 
Middle East, 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 
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 information is provided by RNS
           The company news service from the London Stock Exchange

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IMSBRBDBRDGBGDI -0- Nov/09/2012 07:00 GMT