Personal Group Holdings Plc · LSE:PGH
Personal — FY2018 Earnings Presentation
31 slides from Personal's earnings presentation, March 2019
Slide 1: Preliminary Statement
Preliminary Statement For the year ended 31st December 2018 March 2019
Slide 2: Market landscape
Market landscape General market for our products is buoyant: • Full employment resulting in significant war for talent • Increase in National Living Wage limiting companies to afford meaningful pay rises • PG offers a benefit and communications package via mobile - an attractive alternative to pay r
Slide 3: Financial highlights
Financial highlights • Group revenue of £55.3m (2017: £45.2m) h 22.4% • EBITDA from continuing operations of £11.4m (2017: £10.8m) h 5.8% • Profit before tax from continuing operations of £10.2m (2017: £9.5m) h 7.4% • Basic EPS from continuing operations of 27.2p (2017: 26.9p) h 1.1% • Balance sheet
Slide 4: Operational highlights
Operational highlights • Continuing to deliver on strategy • All three business segments traded ahead of previous year despite strong headwinds in the 2nd half of 2018 • New Insurance sales 97% of all time record at £10.5m annualised premium • Let’s Connect started to bounce back post HMRC issues of
Slide 5: New Insurance Sales
New Insurance Sales * 12.00 10.00 8.00 £m 6.00 H2 H1 4.00 2.00 0.00 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * Annualised revenue from Hospital Cash and Convalescence Plans, Death Benefit and Voluntary Group Income Protection Plans 5
Slide 6: Insurance
Insurance • Earned premium £31.2m marginally up on PY (2017: £30.7m) • Strong new insurance sales of £10.5m annualised insurance premiums – 97% of best ever – 22% of new business was from new customers at new companies (2017: 15%) • Second half impacted by 3rd party data breach and GDPR resulting in
Slide 7: Hapi – proposition
Hapi — proposition Retail & Leisure Core Discounts Salary Benefits Sacrifice & Exchange Reward & Mental Recognition Wellness surveys hapi. wieness — Financial Wellness Recruiting & Onboarding Personalisation Payslips Content Holiday Buy/Sell Recognition Home Awards Technology usage & Promotions Adop
Slide 8: Hapi – business model
Hapi – business model 8
Slide 9: SaaS
Saas • Strong revenue growth of 277% to £8.7m (2017: £2.7m) – driven by spend on Hapi • Significant increase in customer spend through Hapi platform helping drive engagement, up 13% • Over £1.1m saved by users of Hapi with the top 25 retailers representing 95% of spend. 321,000 activated users on Ha
Slide 10: PG Let's Connect
PG Let’s Connect • Revenue £15.0m up 33% (2017: £11.3m) but recovery taking longer than expected – Private sector 20%, Public sector 42%, RMG 38% – Top categories iPad £1.9m, iPhone £1.7m, TV £1.6m, Consoles £1.4m, MacBook £1.3m, HP £1.3m, Apple watch £1.1m, Sonos £0.6m • Adjusted EBITDA £1.2m (2017
Slide 11: Innecto
Innecto • In February PGH acquired Innecto People Consulting Limited ("Innecto"), a leading UK independent pay and reward consultancy, for a cash consideration of £3m • Expect earnings accretive immediately • Well established complementary business • Operates at a more senior level in large corporat
Slide 12: Technology and cyber security
Technology and cyber security • Hapi functionality extended to include Reward & Recognition features • New native app well into roll-out • Underpinning technology platform (Out-systems) major upgrade – First major upgrade since original implementation 4 years ago – SOC II and ISO27001 compliant – AW
Slide 13: Financial Performance
Financial Performance For the year ended 31st December 2018
Slide 14: Group results
Group results Dec-18 Dec-17 Growth £000 £000 % Continuing Operations Revenue 55,347 45,233 22.4 EBITDA* 11,437 10,812 5.8 Operating profit 9,548 9,512 0.3 Profit before tax 10,210 9,510 7.4 Tax 1,819 1,486 22.4 Profit for the period 8,391 8,024 4.5 Discontinued Operations Profit for the period 0 238
Slide 15: Profit & Loss
Profit & Loss • Revenue from continuing operations of £55.3m (2017: £45.2m) h 22.4% – Core insurance (PHP & DB) earned premium £31.0m (2017: £30.3m) o New insurance sales £10.5m (2017: £10.8m) – SaaS income £8.7m (2017: £2.7m) • EBITDA of £11.4m from continuing operations (2017: £10.8m) h 5.8% • Cas
Slide 16: New business insurance sales ratios
New business insurance sales ratios 2018 2017 2016 2015 FY FY FY FY Enrolled to presented % 52% 52% 51% 54% Acquisition cost of £100 API* £77 £69 £72 £72 Av API per employee enrolled £257 £237 £232 £210 Sales executive daily API £1,145 £1,207 £1,145 £1,100 * Annualised Premium Income 16
Slide 17: Earned premium
Earned premium 35.0 30.0 25.0 20.0 H2 15.0 H1 10.0 5.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 17
Slide 18: Segmental analysis
Segmental analysis Dec-18 Dec-17 Growth £000 £000 % Continuing Operations Total Revenue Insurance 31,210 30,727 1.6 Let's Connect 14,970 11,292 32.6 SaaS 8,742 2,657 229.0 Other 425 557 (23.7) Total 55,347 45,233 22.4 EBITDA Insurance 9,777 9,960 (1.8) Let's Connect 1,226 288 326.0 SaaS 196 344 (43.
Slide 19: Dividend record 2008 – 2018
Dividend record 2008 – 2018 23.50 22.50 21.50 20.50 19.50 18.50 17.50 16.50 15.50 14.50 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Continuation of progressive dividend * First quarterly dividend of 5.825p will be paid on 29th March 2019 19
Slide 20: Significant shareholders
Significant shareholders % Christopher Johnston 37.8 Miton Asset Management Limited 12.4 Investec Wealth & Investment Limited 6.5 Royal London Asset Management Ltd 5.6 NN Group N.V. 5.1 Chelverton Asset Management Ltd 5.0 Other directors, staff and AESOP Trust 0.1 Source: NASDAQ (as at 31 December 2
Slide 21: Summary
Summary • Strong underlying performance despite strong headwinds in the second half • Enter 2019 in robust shape, however, challenges in latter part of 2018 will have some effect and we also face a more uncertain business environment • Brexit – as a UK centric business we believe that the increased
Slide 22: Appendices
Personal RS Group Appendices
Slide 23: Summary income statement
Summary income statement Better / Dec-18 Dec-17 (worse) £000 £000 £000 Net premiums earned 31,232 30,679 553 Less: claims incurred (7,175) (6,780) (395) Insurance underwriting profit 24,057 23,899 158 Other income 333 496 (163) Salary Sacrifice profit 1,119 256 863 SAAS profit 168 189 (21) Other exp
Slide 24: Earned premium and claims
Earned premium and claims Dec-18 Dec-17 PHP DB Other Total PHP DB Other Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Earned premium 24,480 6,554 198 31,232 24,034 6,294 351 30,679 Claims (5,465) (1,004) (706) (7,175) (4,932) (1,181) (667) (6,780) 19,015 5,550 (508) 24,057 19,101 5,113 (316)
Slide 25: EBITDA reconciliation
EBITDA reconciliation Dec-18 Dec-17 £000 £000 Continuing Operations Profit before tax 10,210 9,510 Interest costs 148 - LC - amortisation 330 330 Share-based payments 117 192 Depreciation 797 437 Amortisation (other) 331 343 Corporate acquisition costs 150 - PG Let's Connect - release of tax provisi
Slide 26: Summary balance sheet
Summary balance sheet Increase / Dec-18 Dec-17 Reduction £’000 £’000 £’000 Tangible fixed assets (buildings, cars,computer, FF&F) 6,040 4,747 1,294 Intangible fixed assets (computer software) 500 986 (486) Investment properties 130 130 0 Equity - accounted investee 50 638 (588) Equities 0 900 (900)
Slide 27: Hapi – client landscape
Hapi – client landscape = New Client Launches 27 = New Hapi Client Launches
Slide 28: SMT Bio
SMT Bio Deborah Frost * Mike Dugdale * Andy Lothian * Group Chief Executive Chief Financial Officer Managing Director PGB Sales Appointed Date Appointed Date Appointed Date September 2015 (Appointed CEO 28 January 2013 July 2017 (employee since 1998) February 2019) Experience Experience Experience P
Slide 29: SMT Bio
SMT Bio Sarah Mace * Group Financial Controller and Ashley Doody Rebekah Tapping Company Secretary Chief Information Officer Group HR Director Appointed Date Appointed Date Appointed Date April 2014 May 2013 January 2015 Experience Experience Experience Previously Head of Finance for private Spent t
Slide 30: Board Bio
Board Bio Mark Winlow Bob Head Ken Rooney Non Executive Chairman Non Executive Director Non Executive Director and Deputy Chairman Appointed Date Appointed Date Appointed Date May 2016 (Non Executive October 2013) November 2016 July 2000 (Non-Executive since July 2015) Experience Experience Experien
Slide 31: Our History
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Personal Group Holdings — FY2018 Earnings Presentation on 6ix