TIDMPGH
RNS Number : 8309M
Personal Group Holdings PLC
26 January 2021
26 January 2021
Personal Group Holdings plc
("the Company" or "Group")
Trading Update
A solid result for the year alongside clear strategic
progress
Personal Group Holdings Plc (AIM: PGH), the technology-enabled
employee benefits and services provider, is pleased to provide the
following update on the financial year ended 31 December 2020 ("FY
2020"). The Company expects to publish its results for FY 2020 in
late March 2021.
Overview
Following a solid first half performance, we continued to trade
robustly for the remainder of 2020, demonstrating the business'
ongoing resilience during a most challenging period. The Company
made good strategic progress throughout the year, securing a number
of new contracts and strengthening key partnerships. The pandemic
has spurred organisations to increasingly recognise the value of
supporting and protecting their employees' financial and general
wellbeing and this trend is set to grow substantially creating long
term growth opportunities for the Group.
Revenues for the full year 31 December 2020 are expected to be
approximately GBP70m, broadly in line with the previous year, and
adjusted EBITDA to be upwards of GBP9.5m (2019: GBP11.0m)
reflecting the change in revenue mix. This performance, delivered
despite the impact of Covid-19, highlights the strength of our
underlying offering and our diverse business model with its various
streams of recurring revenues.
The Group's balance sheet remains strong with a cash position of
approximately GBP20m as at 31 December 2020 (2019: GBP17.0m) and no
debt.
Operational Review
Insurance
Hospital plan and death benefits policy provision
We are very proud of the service that our teams have provided
over the year to our insurance policyholders, who are mainly key
and essential workers. All claims made have been paid out swiftly
and in full.
Trends in the Insurance division have been consistent since the
onset of the pandemic. Retention rates for existing policyholders
have remained strong, reflecting the value placed on our policies.
Meanwhile claims levels have remained broadly in line with previous
years as the additional Covid-19 related claims were mitigated by a
reduction in claims in other areas of healthcare - the capacity of
the NHS was largely consumed by its Covid-19 response.
Generally, we have remained unable to execute new policy sales
face-to-face, an important channel when attempting to reach
employees directly. Whilst this has had a material impact on new
insurance sales, and will impact the Group's premium income and
profitability in 2021, we still successfully secured major wins
with Royal Mail Group and a large retailer during the period, both
to be rolled out in 2021.
Pleasingly, the new virtual insurance sales solution has shown
encouraging initial results. We have also expanded our policyholder
base to capture contingent workers. These developments, together
with the newly added capability to access insurance benefits
through our digital platforms, will mean the Insurance division
will benefit from expanded distribution channels going forward.
PG Let's Connect
Provision of home technology via salary sacrifice
Trading from PG Let's Connect stepped back from last year due to
global Covid-19 related supply chain disruption, however, demand
remained robust. As previously announced, there have been several
new wins in this division alongside an extension of the existing
Royal Mail Group contract. For a large proportion of the UK
workforce, having a convenient, accessible way to purchase new
technology remains a highly desirable benefit, and is reflected in
the engagement rates of current clients.
SaaS
Digital employee benefits platforms
The recurring revenue nature of the SaaS division meant that
revenue across our digital employee benefit platform products
continued to be relatively unaffected during the second half of the
year. Pass-through transactional spend, through the Hapi platform
on products such as e-vouchers and reloadable cards, was
particularly strong and reflected increased usage of the platform
and its value to clients. The Group's consultancy business, the pay
and reward subsidiary, Innecto, represents roughly a third of
non-transactional revenues, was directly impacted by clients being
in lockdown but made good operational progress developing the
'Innecto digital' product range.
The Group made good progress with its key strategic initiative
to grow the SaaS division and has continued to work with Sage its
partner in the SME sector. Together we offered a limited free trial
offer of Sage Employee Benefits to Sage's customer base, with
Personal Group's in-house sales team helping to embed the product
with SME employers and their staff. Whilst the conversion of SME
businesses into paying customers only commenced recently, initial
conversion levels have been encouraging which we believe will
underpin the expansion of our work with Sage.
Outlook
Protecting employees' health and wellbeing became a key focus
for all employers in 2020. With 72% of UK managers naming wellbeing
as a top priority in 2021, the Company's three divisions remain
well placed to help them deliver on this.
With further Government lockdowns ongoing, 2021 is expected to
see a more significant financial impact on both income and profit
as the ongoing restrictions reduce the ability to write new
insurance sales and the historic impact from 2020 flows through. We
also remain vigilant for the potential impact on the Group from any
increase in claims. Notwithstanding, there are a number of clear
strategic growth opportunities which underpin our confidence in the
Group's prospects over the medium-term. New client wins will give
Personal Group access to a significant number of employees when
restrictions are lifted, all of whom will have the ability to apply
for Group's insurance products, and the partnership with Sage
represents an exciting, tangible opportunity to materially grow our
target market for employee benefits.
With its strong balance sheet, quality customer base and leading
technology platform, the Group is well placed to capitalise on
opportunities that arise as employee wellbeing rises further up the
Board agenda. We remain confident in the long-term outlook for the
Company.
Deborah Frost, Chief Executive of Personal Group, commented:
"2020 has been a year like no other, and first and foremost I'd
like to thank all our teams for their hard work. It is due to their
extraordinary efforts that we have been able to deliver on our core
mission: to protect the unprotected and connect the unconnected.
This is a responsibility employers are increasingly recognising
they owe to their staff, and it is great to see it resonating at
such scale.
Despite the challenge to our traditional business model, we've
delivered robust financial results and made clear strategic
progress in the period, with a number of key clients wins. In
addition, we've enhanced our technical and operational capability,
setting us up well for rebuilding for the long term. We now see
organisations appreciating their responsibility for the health and
wellbeing of their staff, not just as a method to increase
productivity but as a core element of their ESG agendas and
business resilience. Personal Group is an expert in this market and
is well positioned to help businesses deliver on their plans,
whatever the structure of their workforce."
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.
-S-
For more information please contact:
Personal Group Holdings Plc
Deborah Frost (CEO) / Sarah Mace Via Alma PR
(CFO)
Cenkos Securities Plc
Max Hartley / Callum Davidson
(Nomad) +44 (0)20 7397 8900
Russell Kerr (Sales)
Alma PR +44 (0)20 3405 0205
Susie Hudson / Caroline Forde personalgroup@almapr.co.uk
/
Rebecca Sanders-Hewett
Notes to Editors
Personal Group Holdings Plc (AIM: PGH) is a technology enabled
employee benefits and services provider. The Group exists to help
organisations right across the UK to build better connections with
their most important asset - their people - through tailored,
flexible and innovative services, benefits and insurance products.
Its core mission is to connect the unconnected and protect the
unprotected.
Personal Group's offer comprises in-house services, including
employee insurance products (hospital, convalescence plans and
death benefit), the provision of home technology via salary
sacrifice (iPads, computers, laptops, smart phones and smart TVs),
the provision of e-payslips, and pay and reward consulting via
Innecto, the leading independent UK consultancy acquired in 2019.
Third party services include retail discounts, employee assistance
programmes, wellbeing programmes and salary sacrifice cars and
bikes.
The product offer is provided via the Company's proprietary
technology platform, Hapi. The platform is intuitive, designed
primarily for app deployment and also accessible via web and
tablet, driving better engagement, communication and value
recognition. Hapi is flexible and can quickly integrate additional
services, such as existing employee services and partner platforms.
Hapi is a digital SaaS product.
Through technology and select acquisitions, the Company has
grown its addressable market to the majority of the working
population in the UK; including 15.6m SME employees targeted via
its partnership with Sage, the UK's largest software company.
Personal Group's innovative approach to using technology to
deliver its programmes, in combination with its face-to-face method
of communicating with employees, delivers a compelling offer to
blue-chip clients across the UK as a way of attracting, retaining
and motivating employees. The acquisition of Innecto in February
2019 allows Personal Group to engage with clients earlier in their
thinking around Pay and Reward, and to interact with a new base of
blue-chip and fast growth clients typically at HR Director and CEO
level.
Personal Group has a strong client base across a diverse range
of sectors. Clients include: Arsenal F.C., Barchester Healthcare
Ltd, DHL Supply Chain Limited, The Go-Ahead Group plc, Samworth
Brothers Ltd, Independent Television News, Stagecoach Group plc and
Wincanton plc.
For further information, please see www.personalgroup.com
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END
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