WELCOME
H A L F Y E A R R E S U L T S 2 0 1 6 / 1 7
WELCOME H A L F Y E A R R E S U L T S 2 0 1 6 / 1 7 This - - PowerPoint PPT Presentation
WELCOME H A L F Y E A R R E S U L T S 2 0 1 6 / 1 7 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
H A L F Y E A R R E S U L T S 2 0 1 6 / 1 7
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 financial conditions, business performance and results of Hansard Global plc. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that are beyond the control of Hansard Global plc, including amongst other things, Hansard Global’s future profitability, competition with the markets in which the Company operates and its ability to retain existing intermediary clients and win new intermediary clients, changes in economic conditions generally or in the life assurance, savings and investment products sectors, terrorist and geopolitical events, changes in legal and regulatory regimes and practice, the ability of its owned and licensed technology to continue to service developing demands, changes in taxation regimes, exchange rate fluctuations, and volatility in the Company’s share price. As a result, Hansard Global’s actual future financial condition, business performance and results may differ materially from the plans, goals and expectations expressed or implied in these forward-looking statements. Hansard Global undertakes no obligation to publicly update or revise forward-looking statements, except as may be required by applicable law and regulation (including the Listing Rules). No statement in this presentation is intended to be a profit forecast or be relied upon as a guide to future
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Graham Morrall
Global Sales & Marketing Director
Gordon Marr
Chief Executive Officer
Tim Davies
Chief Financial Officer
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IFRS profit
(H1 2016: £4.9m) Key strategic alliance launched in the UAE New Business
(H1 2016: £56.4m) Interim dividend
share (H1 2016: 3.6p)
Hig Highlig ights
Value of future profits increased 12% to £145.9m (H1 2016: £130.3m) Assets Under Administration up 8% to £1 billion
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To add significant sc scal ale to the business, on a more di diversified basis, through or
acceptable levels of risk & pr profitability To be the preferred choice of distributors when recommending international savings and investment products to their clients
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More long-term rela latio ionship ips with distributors A more vis isib ible le profile in the market Better valu alue for Customers Ex Excelle llent customer service Market lead adin ing online systems Motivated & eng ngaged workforce
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Next phase of growth focussed around delivering sustainable access to attractive markets We remain alert to changes within our operating environment
implemented in 2018 and beyond Internal structures being reorganised to better position for change Leveraging our strengths of agility and technology
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̶ 3rd party administration ̶ technology ̶ reinsurance
̶ regulatory license ̶ local market expertise and distribution capabilities ̶ product underwriting
contribution for FY 2018 and beyond
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H1 2017 H1 2016 New business sales – PVNBP £74.9m £56.4m New business margin 1.3% (0.4)% Operating cash surplus £9.3m £8.8m IFRS profit after tax £4.4m £4.9m EEV operating loss after tax (£2.4m) (£0.6m) EEV profit after tax £8.5m £1.2m Interim dividend per share 3.6p 3.6p H1 2017 H1 2016 European Embedded Value £197m £189m Assets Under Administration £1,001m £856m
Su Summary Res Results 13
H1 2017 H1 2016 Present Value of New Business Premiums £m £m Regular premiums 42.6 29.9 Single premium 32.3 26.5 PVNBP 74.9 56.4 Annual Premium Equivalent (“APE”) 11.7 8.4 New Business Margin (PVNBP basis) 1.3% (0.4)%
New ew Bus Busin iness
RP and SP sales both increased substantially Improved new business margin with increasing scale
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Asse ssets ts un under Adm dministr tratio ion Dev Development
743 726 701 682 827 303 260 223 174 174 100 200 300 400 500 600 700 800 900 2013 2014 2015 2016 2017
AuA £M Year
Hansard International and Hansard Europe 5 year trend
HI HE
HI: AuA reflecting increased new business and positive stock market / fx gains HE: Flattening AuA after declines experienced post closure to new business in 2013
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H1 2017 H1 2016
£m £m Operating cash surplus 9.3 8.8 Interest and other income 0.4 0.5 Cash inflow 9.7 9.3 Investment in new business (8.7) (7.1) Capital expenditure (0.3) (0.2) Net Cash inflow before dividends 0.7 2.0 Dividends paid (7.3) (7.2) Net Cash outflow for the year (6.6) (5.2)
Increased investment in new business in the financial year. Continued net cash flow outflow not sustainable – while healthy cash reserves exist, we intend to rebalance dividend levels in next financial year.
Cas Cash Fl Flows
9.3
5 10 15 20 Operating cash surplus in period to 31 Dec (£m) 71.8 10 20 30 40 50 60 70 80 90 Shareholder cash at 31 December (£m)
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H1 2017 H1 2016 £m £m Total Group cash + deposit balances 71.8 79.6 Net shareholder payables (1.4) (1.9) Policyholder claims payable (21.8) (20.2) Regulatory reserves (4.5) (4.5) Minimum regulatory capital * (7.0) (6.2) 37.1 46.8 Net assets restricted within Hansard Europe (19.5) (19.2) “Free” Group cash + deposit balances 17.6 27.6
Free Free Cas Cash
* Includes capital requirements in Isle of Man and Labuan. Minimum regulatory capital taken as 200% of amount needed to continue in operation. Until greater scale of fee income reached, cash is being depleted by approx. £8-9m p.a. Headline cash balance is allocated to a number of constituents before true free cash can be identified
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business plan
strain (projecting in excess of £200m PVNBP in FY 2018)
via Union Insurance channel
developments
future dividends to free up cash flow for investment in new business
In light of projected cash flows and anticipated growth, a change in dividend policy will be necessary from 2018
Guiding a 50% dividend reduction in the 2018 Financial Year (i.e. commencing with the March 2018 interim dividend)
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which will ensure there are no cash constraints should the Union Insurance relationship grow by multiples of what we currently project
borrowing to fund a dividend was not considered by the Board to be the optimum use of cash resources and would dilute future IFRS and EEV profits
additional dividend or investment capacity at some point in the future
Attractive and sustainable returns can be made by investing further in new business
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H1 2017 H1 2016 £m £m Fees and commissions
21.3 21.7
3.1 3.6 24.4 25.3 Investment and other income 0.9 1.0 25.3 26.3 Origination costs (9.5) (10.5) Administrative and other expenses (9.7) (9.7) Strategic spend (1.0) (1.2) 5.1 4.9 Provision for bad debts (0.7)
4.4 4.9
IFRS IFRS - Abr brid idged income st statement
Fee income declining as HE book reduces and lower initial fees in HI Close control on administrative expenses, despite significant increase in new business
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H1 2017 H1 2016 £m £m Deferred origination costs 111.3 111.2 Other assets 8.6 6.0 Shareholder cash and bank deposits 71.8 79.6 Total assets 191.7 196.8 Deferred income 129.3 132.7 Other payables 29.1 26.3 158.4 159.0 Net assets 33.3 37.8 Shareholders’ Equity 33.3 37.8
IFRS IFRS - Abr brid idged ba bala lance she sheet
111.3
100 105 110 115 120 125 130 135
Deferred Origination Costs at 31 December (£m)
129.3
120 125 130 135 140 145
Deferred Income at 31 December (£m)
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H1 2017 H1 2016
£m £m Free surplus 23.2 31.4 Required capital 28.0 27.2 Net worth 51.2 58.7 Value of future profits 145.9 130.3 European embedded value 197.1 189.0
New business was added in the year at a higher rate than future profits were converted to cash. Change in EEV from H1 2016 includes pay out of £12.2m dividends.
EE EEV – ba bala lance she sheet
50 100 150 200 250
EEV balance sheet as at 31 December
VIF Net Worth EEV per share = 143p (H1 2016: 138p)
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H1 2017 H1 2016 £m £m New business contribution 1.0 (0.2) Expected return 0.4 0.7 Experience variances (1.8) (1.5) Assumptions and other changes (2.0) 0.4 EEV operating profit (2.4) (0.6) Investment return variances 12.1 1.3 Economic assumption variances (1.2) 0.5 EEV profit for the year 8.5 1.2
EE EEV retu return af afte ter taxa axatio ion
Positive new business contribution reflecting increased volumes of new business Experience variances and assumption changes reflect lower than assumed policy count and adjusted persistency assumptions Positive investment return variances driven by stock market and foreign exchange gains
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Union Insurance Project 8 Funds added to Savings Plans Continuation in work to increase Market Awareness Consolidating Production - Reduced Concentration Risk PVNBP up 32.8%
Activity H1 2017
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Top 20 Distributors accounted for 74% of H1 2017 Production, of which… New Business received from all Distributors worldwide, of which…
Asia 23% 21% Lat Am 13% 10% RoW 27% 28% Middle East 37% 40%
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RoW
Latin America
North Asia SE Asia
Middle East & Africa
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Events ts
Prod
provide improved customer value
corporate and affinity group savings customers
support Indian investors
personal portfolio bond investors with access to over 30 DFMs globally
access to further providers
accessing discounted trust fees for investments into Capital Builder II
choice of two flexible saving and investment products – called Infinity Wealth and Infinity Access
Investments Add Addit itio ional l So Solut utio ions
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IFRS profit
(H1 2016: £4.9m) Key strategic alliance launched in the UAE New Business
(H1 2016: £56.4m) Interim dividend
share (H1 2016: 3.6p)
Hig Highlig ights
Value of future profits increased 12% to £145.9m (H1 2016: £130.3m) Assets Under Administration up 8% to £1 billion
We remain confident on the future outlook for the Group
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