Hansard Global managed to attract plenty of new investments in the half year, but profits took a knock as a result of weakness in equity markets. However, management's confidence was translated by another dividend increase, which takes the yield above 9 per cent.
The group provides a range of tax-efficient investment products within a life insurance wrapper, primarily for rich clients in Latin America and the Far East. Demand remained strong, with new business sales on a regular premiums basis rising 41 per cent to £67.6m. Single premium sales fell from £66.6m to £22.1m, but this was up against last year's tough comparative. New business margins after tax rose from 7.4 per cent to a record 10.4 per cent, and the group continues to generate positive cash flows to fund new business.
Set against this, a fall in equity values, which will have an impact on future asset-based income streams, meant that last year's £17.8m profit was turned into an investment return loss of £15m on an embedded value basis. Hansard continues to invest in its internet operation Hansard OnLine, and more than 1,000 policies were introduced electronically, around 76 per cent of regular premium policies.
Numis is forecasting full-year embedded value of 179p (187p in 2011).
| HANSARD GLOBAL (HSD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 151p | MARKET VALUE: | £207m | |
| TOUCH: | 149-153p | 12-MONTH HIGH: | 175p | LOW: 145p |
| DIVIDEND YIELD: | 9.2% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 34p | EMBEDDED VALUE: | 177p | |
| Half-year to 31 Dec | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2010 | 8.6 | 6.1 | 5.75 |
| 2011 | 5.2 | 3.8 | 5.90 |
| % change | - | - | +3 |
Ex-div: 29 Feb Payment: 29 Mar | |||
