With a fairly lengthy period of reorganisation now behind it, Personal Group (PGH) - which is focused on underwriting hospital and convalescence plans for blue-collar workers - grew underlying cash profits at the half-year stage by nearly 11 per cent year-on-year, to £4.4m.
That performance was helped by a near-5 per cent rise in new business premia, and the group also announced contract wins in the period with Four Seasons Health Care, Translink and Oak Furniture Land. Earnings would have been better still had it not been for legal costs relating to action being taken against three former employees.
There was also a contribution from March’s acquisition of Lets Connect IT Solutions, which helps employees buy electronic gadgets through salary-sacrifice schemes. As well as broadening the group’s product offering, that deal also added over 100 corporate clients, only one of which overlaps with Personal's existing customer base. Analysts think the move should generate significant cross-selling opportunities.
The Berkeley Morgan unit, meanwhile, remains in run-down. The implementation of the Retail Distribution Review hit the business hard, and management expects the run-down process to be largely complete within the next two or three years.
Broker Cenkos expects full-year adjusted pre-tax profit of £10.4m, giving EPS of 26.2p (from £8.3m and 21p) and a 19.6p dividend.
PERSONAL (PGH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 533p | MARKET VALUE: | £160m | |
| TOUCH: | 525-540p | 12-MONTH HIGH: | 571p | LOW: 380p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 73 | |
| NET ASSET VALUE: | 82p* | NET CASH: | £1.8m | |
| Half-year to 30 Jun | Gross premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)† |
|---|---|---|---|---|
| 2013 | 11.2 | 3.31 | 8.32 | 9.3 |
| 2014 | 11.9 | 3.46 | 8.62 | 9.8 |
| % change | +6 | +5 | +4 | +5 |
*Includes intangible assets of £11.2m or 37p a share †Dividends paid quarterly; second-quarter dividend paid on 24 June | ||||
