Four factors contributed to last year's post-tax profit decline at long-term savings provider Hansard Global (HSD). Most important was the continued drop-off in customers of the group's European operations, which closed to new business in 2013. Second, the products replacing those older revenue streams have lengthier earning periods. Then there was the punishing effect of rocky stock markets, which checked annual management charges. Investments in the distribution network and new markets didn't help the bottom line, either.
The profit drop may have explained the nervy market response to Hansard's half-year results. Legal issues from the legacy European operations continue to curdle investor sentiment, too, although a £1m net increase in litigation exposure is arguably less significant than the successful resolution of two cases in Belgium and one in Italy during the period.
Strong sales momentum offered further encouragement. The current value of new business premiums increased by a whopping 64 per cent year on year, thanks to strong sales in the Middle East and Africa, although chairman Philip Gregory now says this is being replicated in the Far East and the Rest of World regions.
Broker Panmure Gordon now expects full-year IFRS pre-tax profit of £11.9m, giving EPS of 8.7p, down from £14.9m and 10.9p, respectively, in the year to June 2015.
HANSARD GLOBAL (HSD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 106p | MARKET VALUE: | £146m | |
| TOUCH: | 106-109p | 12-MONTH HIGH: | 122p | LOW: 81p |
| DIVIDEND YIELD: | 8.3% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 28p | EMBEDDED VALUE: | 138p | |
| Half-year to 31 Dec | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2014 | 6.6 | 4.8 | 3.5 |
| 2015 | 4.9 | 3.5 | 3.6 |
| % change | -26 | -27 | +3 |
Ex-div: 3 Mar Payment: 31 Mar | |||
