Hansard Global Plc · LSE:HSD
Hansard Global — H1 2009 Earnings Presentation
31 slides from Hansard Global's earnings presentation, Feb 26, 2009
Slide 1: Results for the half-year ended 31 December 2008
Results for the half-year ended 31 December 2008 26 February 2009
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an invitation to subscribe for or otherwise to acquire or dispose of shares in Hansard Global plc. This presentation may contain forward-looking statements with respect to certain of the plans and current goals and expectations relating to the future
Slide 3: Index
Index Highlights and Overview Hansard OnLine developments Financial Performance Summary Appendices 2
Slide 4: Highlights of half-year ended December 2008
Highlights of half-year ended 31 December 2008 IFRS earnings per share up 1.1% to 9.3 pence (2007: 9.2 pence) IFRS PAT increased to £12.7m (2007: £12.6m) 2009 interim dividend per share increased by 5% to 5.25 pence (2008: 5.0 pence) Assets under Administration resilient at £1.09bn, down 4.4% (30 Ju
Slide 5: Performance in current markets
Performance in current markets Current market environment is extremely challenging Hansard’s resilient business model is well placed to deal with these conditions: Over £1 billion Assets under Administration (AUA) New business flows at industry leading margins Regular premium flows Unit-link
Slide 6: Highlights - strong financial track record
Highlights - strong financial track record EEV Balance Sheet as at 31 December AUA as at 31 December 1, 400 300 268 1, 217. 4 1, 200 1, 093. 4 250 232 1, 034. 4 193 1, 000 886. 1 200 800 150 £m £m 600 100 400 50 200 0 0 2006 2007 2008 2005 2006 2007 2008 A s at 3 1 D e c e mbe r A s at 3 1 D e c e m
Slide 7: Highlights - well capitalised with no debt
Highlights - well capitalised with no debt Required m inim um solvency m argin cover Shareholders capital 60 18 50 16 14 40 55.5 12 48.5 d 10 £m 30 47.5 8 20 11.2 12.9 15.6 15.7 27.6 6 4 10 2 0 0 2005 2006 2007 2008 2005 2006 2007 2008 As at 31 Decem ber As at 31 Decem ber Progressive dividend polic
Slide 8: Hansard OnLine - developments continue
Hansard OnLine - developments continue Intermediaries can now upload % split of languages scanned documents directly to the company, increasing data security Ot her while reducing cost. 15% Clients can now see copies of correspondence issued by the life English companies via their client sites. Mand
Slide 9: Results for the half-year ended December 2008
Results for the half-year ended 31 December 2008
Slide 10: New business at industry leading margins
New business at industry leading margins Half-year ended 31 December 2008 2007 £m £m Annualised regular premiums 7.0 9.4 Single premiums 5.3 7.7 Annualised Premium Equivalent 12.3 17.1 Compensation Credit (internal measure) 6.7 9.0 PVNBP 93.0 130.5 New Business Margin – PVNBP basis 7.0% 8.0% 9
Slide 11: Global distribution - new business (APE)
Global distribution - new business (APE) 100% 90% Increasing % of RP business 80% 55.2% 52.9% 57.4% 54.7% SP business more susceptible to market 70% 60% volatility 50% 40% 30% 42.6% 44.8% 45.3% 20% 10% 0% 31 December 2008 31 December 2007 Year to 30 June 2008 Annualised RP SP South America and Far E
Slide 12: Summarised Profit & Loss Account
Summarised Profit & Loss Account for the half-year ended 31 December 2008 2007 £m £m Fees and Commission 25.7 26.9 Contract investment income (50.0) 74.7 Group foreign exchange gains 2.7 1.4 Group investment income 3.5 2.7 Other operating income 0.2 0.3 Net Income (17.9) 106.0 Investment contract be
Slide 13: Sources of revenue – half year ended December 2008
Sources of revenue – half year ended 31 December 2008 Fees and Commission By Type 30.0 2.3 25.0 2.0 6.7 6.1 20.0 Commission receivable 15.0 Fund management fees Contract fee income 10.0 17.6 17.9 5.0 0.0 31-Dec-08 31-Dec-07 Contract Fee Income analysis (£m) 31 Dec 2008 31 Dec 2007 Establishment fees
Slide 14: Summarised Balance Sheet
Summarised Balance Sheet (1) (£ millions) As at 31 Dec As at 31 Dec 2008 2007 Assets Financial investments 1,093.4 1,217.4 Deferred Origination Costs 104.6 98.9 Other Assets 14.1 16.3 Shareholder Cash and cash equivalents 73.4 66.0 Total Assets 1,285.7 1,398.6 Liabilities Financial Liabilities Under
Slide 15: Analysis of movement in financial investments
Analysis of movement in financial investments Half-year ended Year ended 31 Dec 2008 31 Dec 2007 June 2008 £m £m £m Opening assets 1,137.4 1,130.2 1,130.2 Deposits to investment contracts 66.8 84.7 148.9 Redemptions (60.8) (72.2) (144.2) FX movements 213.7 41.9 74.6 Market movements (263.7) 32.8 (72
Slide 16: Summarised Cashflow Statement
Summarised Cashflow Statement (1) Half-year ended 31 December (£ millions) 2008 2007 Cash generated from operations 6.6 6.5 Investment income and foreign exchange 6.2 4.1 Cash inflow 12.8 10.6 Capital Expenditure (0.5) (0.4) Net Cash Inflow before dividends 12.3 10.2 Ordinary dividends paid during t
Slide 17: Summary & Outlook
Summary & Outlook Solid performance with IFRS PAT of £12.7m, EEV up 10%, despite capital market volatility Hansard business model enables the company to receive business from a strong and diversified intermediary base at industry leading margins Experienced management team Strong financial track rec
Slide 18: Appendix
Appendix
Slide 19: Experienced Management Team
Experienced Management Team Dr Leonard Polonsky, Executive Chairman. Dr Polonsky founded the Group in 1970. Robert Hall, Chief Operating Officer. Robert joined the Group in 1995 as Appointed Actuary, becoming the Group’s Chief Operating Officer in 1997. Paul Harwood, Managing Director: Hansard Admin
Slide 20: What Hansard Does
What Hansard Does Expat clients interact with their IFA IFA recommends a life wrapper for their clients IFA agrees with the client the funds in which to invest Reinsure all Life Client has access to Hansard OnLine 24 / 7 to Risk see his policy and investment performance …but client only sees the IFA
Slide 21: Hansard Business Model
Hansard Business Model Low fixed costs Benefits of online functionality Operational Gearing Centralised product design & ‘manufacturing’ Attractive intermediary proposition Wide range of underlying funds Core of long-term intermediaries Online platform supports intermediaries Growing assets under ma
Slide 22: Why Do Intermediaries Choose Hansard?
Why Do Intermediaries Choose Hansard? Hansard offers them local presence and support (through its relationship managers) Hansard OnLine provides them with a valuable support tool White labelling allows intermediary to promote their brand Helps build their business Client monitoring capabilitie
Slide 23: Global Distribution
Global Distribution NEW BUSINESS BY GEOGRAPHY (1) Rest of w orld 17% EU and EEA 34% Far East 23% Latin America 26% Hansard Europe Limited writes policies sold by intermediaries in EEA markets; Hansard International Limited writes policies sold by intermediaries in the remainder (not US) (1) New busi
Slide 24: EEV profit and operating profit
EEV profit and operating profit Half-year ended 31 December (£ millions) 2008 2007 EEV operating profit New Business Contribution 6.5 10.5 Expected Return on Existing 4.8 4.3 2008 Business Experience Variances (2.7) 1.1 6 mon t h s 2007 Model changes 1.3 0.0 Expected Return on Net Worth 1.4 1.4 2006
Slide 25: EEV Balance Sheet
EEV Balance Sheet 300 .8% +19 250 61.4 .7% +15 200 53.0 52.9 Net Worth £m 150 Value in Force 100 206.5 178.5 140.3 50 0 Dec-06 Dec-07 Dec-08 24
Slide 26: Details of EEV Methodology
Details of EEV Methodology The EEV is an estimate of the after-tax value of the shareholders’ interest in the life and related businesses of the Group at the relevant valuation date. Which parts of the Group are reported on an EEV basis? The entire Group, excluding future new business but includin
Slide 27: Key Areas of Hansard’s EEV Methodology
Key Areas of Hansard’s EEV Methodology Allowance for risk A market consistent approach – future cash flows are discounted at the risk free rate – the assumed return on assets is also equal to the risk free rate (Hansard’s business has no guarantees over future investment return that require techni
Slide 28: Key Areas of Hansard’s EEV Methodology (cont.)
Key Areas of Hansard’s EEV Methodology (cont.) Other assumptions for future uncertainties – the assumptions reflect management’s best estimate of future experience, for example of future persistency rates and expenses – the risk that actual experience may vary from assumptions, is included in the
Slide 29: Strong Financial Track Record – financial years ended June
Strong Financial Track Record – financial years ended 30 June EEV Balance Sheet AUA 300 1200 250 1000 200 800 150 600 £m £m 1130 1137 243 947 100 218 400 179 771 143 50 200 0 0 2005 2006 2007 2008 2005 2006 2007 2008 IFRS Profit after tax EEV Profit after tax 25 50 45 20 40 35 15 30 23.6 £m £m 25 10
Slide 30: Additional Key Ratios
Additional Key Ratios Year Ended Year Ended Year Ended Year Ended Year Ended June 2008 June 2007 June 2006 June 2005 June 2004 Revenues / AUA 4.72% 4.73% 5.18% 5.54% 5.54% Profit / AUA 2.08% 1.90% 2.06% 2.12% 1.56% Adm in expens es / AUA 12.0 10.3 10.2 12.0 14.9 Average Incom e per Policy 1,122 1,09
Slide 31: Timeline
Timeline 1970 - Liberty Life founded by Dr Polonsky in the UK 1986 - Hansard International incorporated on the Isle of Man 1995 - Liberty Life sold 1995 - Hansard Europe incorporated in Dublin, Republic of Ireland 1999 - Hansard OnLine launched 1999 - Direct sales channel closed 2000 - Fund manageme