Press Release 10 January 2017
Personal Group Holding PLC
(the “Company”, “Personal Group”, “PGH” or “Group”)
Personal Group PLC, a leading provider of employee benefits and employee related insurance products in the UK, is providing the following trading update post the financial year ended 31 December 2016 (“FY 16’’).
The underlying performance of the business has remained strong, with FY 16 EBITDA marginally ahead of expectations despite a lower than expected top line out turn. This performance reflects the continued strength of the Company’s core insurance business, which during the period saw its fifth consecutive year of record sales, demonstrating the continued attractiveness of its products to employers and employees.
As previously highlighted, HMRC undertook a review of salary sacrifice during 2016, the results of which were announced towards the end of the year. This caused some uncertainty, which meant a proportion of employers delayed contract decisions at a crucial time of year for the Lets Connect business. Whilst Lets Connect represents a small percentage of the Group’s overall profit, by its nature, it represents a higher proportion of Group revenue. As a result of this period of uncertainty, the Company expects a one-off adverse impact to 2017 sales and profits guidance, but 2017 to be a profit growth year, and the Company remains confident for the outlook in the longer term.
PGH welcomes the clarity from the Autumn Statement as it now allows the Company to progress on a sound footing. The continued attractiveness of the Lets Connect product to employers and employees is reflected in the signing of a significant contract with the Royal Mail Group in October 2016. Furthermore, as highlighted by a survey of over 4,000 end users, none of the key attractions of the Lets Connect service were impacted by the outcome of the review, including: convenience, absence of credit checks, no upfront costs, affordability and trusted provision from their employer.
Through the development of its technology platform, Hapi, the Company has opened up new opportunities in the SME market increasing the Company’s available market in the private sector by 15.7 million employees to 26.2 million. The Company is now well positioned to service over 85% of the UK working population. In particular, the partnership contract signed with Sage in November 2016 offers a significant first introduction to this market. Sage have established a specific team within their business to sell the Company’s tailored SME offering into their very considerable customer base. It represents a significant opportunity for the Group, which we look forward to seeing take shape over the course of 2017 and beyond.
Mark Scanlon, Chief Executive of Personal Group, commented: “It is encouraging to see the underlying core business continuing to perform well in the face of some challenges in 2016. The attractiveness of the Lets Connect offer remains strong, and while the uncertainty caused by the HMRC consultation into salary sacrifice has been frustrating in the short run, and will impact 2017 sales and profit guidance. We look forward to growing this business in the future.
“With the signing of the Sage agreement, 2016 also saw us make significant progress in developing our available markets. The Company has more than doubled its market opportunity to over 26 million private sector employees. This gives us a strong platform from which to develop the business further in 2017 and beyond.”
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
Mark Scanlon / Mike Dugdale +44 (0)1908 605 000
Philip Dennis (Investor Relations) +44 (0)7947 868 206
Cenkos Securities Plc
Max Hartley / Stephen Keys (Nomad) +44 (0)20 7397 8900
Russell Kerr (Sales)
Nick Lyon / Sophie Lister / Lucy Wollam +44 (0)20 7796 4133