Winning new clients was harder than expected for Personal Group’s (PGH) core insurance business during the first half of 2019, which in turn weighed on gross premiums. Chief executive Deborah Frost has been charged with reinvigorating the employee benefits specialist’s strategy, which includes a revamp of the sales and marketing approach. The associated investment costs dampened adjusted cash profits, which fell 5 per cent, while trading has been affected by "a hesitation on the part of companies on making commitments”, according to Mrs Frost.
The recently appointed chief is also focused on widening the reach of the insurance business and catering to workers in the gig economy, where payments would be collected via direct debit rather than via the payroll.
Personal's software-as-a-service (SaaS) business was much stronger, as revenues more than trebled to £8.8m amid rising client transaction spending on employee benefits platform Hapi. In a bid to increase cross-selling, the period also saw the acquisition of Innecto, an online platform providing e-payslips, and pay and reward consulting. That looks to be a good addition, with new business wins up more than half during the period.
Analysts at house broker Cenkos forecast adjusted pre-tax profits of £8.8m and EPS of 22.8p for the year to December 2019, rising to £9.4m and 24.5p next year.
| PERSONAL GROUP (PGH) | ||||
| ORD PRICE: | 365p | MARKET VALUE: | £114m | |
| TOUCH: | 360-370p | 12-MONTH HIGH: | 573p | LOW: 334p |
| DIVIDEND YIELD: | 6.3% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 117p* | NET CASH: | £16.4m | |
| Half-year to 30 Jun | Gross premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 15.8 | 3.87 | 10.5 | 11.5 |
| 2019 | 15.3 | 4.09 | 11.4 | 11.65 |
| % change | -3 | +6 | +9 | +1 |
| Ex-div: | 8 Aug | |||
| Payment: | 20 Sep | |||
| *Includes intangible assets £13.8m, or 44p a share | ||||
