Personal Group made solid progress in 2011, helped by robust new business growth. Moreover, with new chief executive Mark Scanlon at the helm, more investment is planned this year on marketing and product development – a commercial director will be appointed. Yet, while the benefits of that are unlikely to show this year, there's already plenty of momentum – add that to a decent dividend yield and the shares look attractive.
The company generates most of its revenue through underwriting hospital and convalescence plans for predominantly blue-collar workers – it has access to 1.2m employees through companies such as Northumbrian Water and UK Mail. New business growth actually reached 13.9 per cent, with voluntary group income protection commission rising to a record high, while personal hospital and convalescence business, as well as death benefits, all contributed strongly. However, increasing compliance costs meant that the Berkeley Morgan IFA and broker subsidiary won't be accepting new investment business, although life business will continue.
There's good news on the dividend, too. Personal pays its dividend quarterly and, last year, it paid out 4.35p a quarter – however, 2012's first-quarter dividend has been raised to 4.45p (paid in March).
Broker Cenkos expects EPS to slip to 23.6p in 2012, before improving to 25.4p in 2013.
| PERSONAL GROUP (PGH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 297p | MARKET VALUE: | £89m | |
| TOUCH: | 294-300p | 12-MONTH HIGH: | 300p | LOW: 254p |
| DIVIDEND YIELD: | 5.9% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 85p | NET CASH: | £1.9m | |
| Year to 31 Dec | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2007 | 8.57 | 21.0 | 12.0 |
| 2008 | 5.23 | 9.20 | 16.5 |
| 2009 | 5.52 | 11.1 | 16.6 |
| 2010 | 9.38 | 22.6 | 17.0 |
| 2011 | 10.0 | 24.8 | 17.4* |
| % change | +7 | +10 | +2 |
Ex-div:- Payment:- *Dividends paid quarterly – fourth-quarter dividend paid in December 2011 | |||
