Hansard Global plc · LSE:HSD
Hansard Global — H1 2007 Earnings Presentation
36 slides from Hansard Global's earnings presentation, Mar 29, 2007
Slide 1: Half-yearly results for the 6 months ended 31 December 2006
Half-yearly results For the 6 months ended 31 December 2006 29 March 2007
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an invitation to subscribe for or otherwise to acquire or dispose of shares in Hansard Global plc. This presentation may contain forward-looking statements with respect to certain of the plans and current goals and expectations relating to the future
Slide 3: Table of Contents
Table of Contents 1. Overview and Highlights Leonard Polonsky 2. Operational Review Gordon Marr 3. Financial Review Vince Watkins 4. Summary & Outlook Leonard Polonsky 2
Slide 4: 1. Overview and Highlights
1. Overview and Highlights Leonard Polonsky Chairman
Slide 5: Overview
Overview Hansard is a specialist long term savings provider, based on the Isle of Man The Group offers a range of flexible and tax-efficient investment products within a life assurance policy wrapper, designed to appeal to affluent, international investors Hansard sells policies exclusively through
Slide 6: Highlights
Highlights Half-year ended 31 December 2006 2005 % change UK GAAP PAT (£ millions) 10.6 8.3 +27.7% UK GAAP EPS (pence) 7.7p 6.0p +28.3% New Business Contribution (£m) 10.3 9.8 +5.1% APE (£m) 17.3 15.9 +8.8% New Business Margin (%) – 8.0% 8.0% - PVNBP basis 5
Slide 7: Highlights (cont)
Highlights (cont) Half-year ended 31 December 2006 2005 % change EEV (£m) 193.2 162.8 +18.7% Assets under Administration (£m) 1,034.6 886.3 +16.7% Coverage of Capital Requirements 12.3 x 10.9 x +12.8% 6
Slide 8: 2. Operational Review
2. Operational Review Gordon Marr Chairman of Hansard Europe and Group Counsel
Slide 9: What Hansard Does
What Hansard Does UNDERLYING INTERMEDIARIES POLICYHOLDERS INVESTMENTS Approximately Packages IFAs / Private Hansard 195 third party investment Banks / focuses on high funds products within Financial net worth, mass Hansard Hansard a life assurance Institutions affluent and Personalised Online Online
Slide 10: Operational Review
Operational Review APE up 8.8%; new business margin stable New business initiatives providing growth Enhanced ability to attract and compete for new business from a wider range of Intermediaries Four new non-executive directors added to the Board Hansard Online continues to differentiate 9
Slide 11: 3. Financial Review
3. Financial Review Vince Watkins Chief Financial Officer ! "
Slide 12: Highlights
Highlights PAT up 28% to £10.6m from corresponding period in prior year EEV up 8% to £193m as at 31 December 2006 (30 June 2006: £179m) APE of £17.3m up 8.8% (H1 05/06: £15.9m) New business margin maintained at 8.0% (H1 05/06: 8.0%) Fees and commission income up 14% to £24.2m Strong positive cash fl
Slide 13: P&L Under UK GAAP
P&L Under UK GAAP (£ millions) Half-Year Ended 31 December H1 06/07 H1 05/06 FY 05/06 Fees and Commission 24.2 21.2 44.5 Investment Income 51.1 85.1 102.6 Other Operating Income 1.8 0.7 0.8 Net Income 77.1 107.0 147.9 Change in Investment Contract Liabilities (49.9) (84.0) (99.3) Origination Costs (
Slide 14: Balance Sheet Under UK GAAP
Balance Sheet Under UK GAAP (£ millions) 31 Dec 06 31 Dec 05 30 June 06 Assets Tangible Assets 0.6 0.6 0.6 Investments 1,034.6 886.3 947.3 Deferred Origination Costs 90.1 81.6 86.6 Other Receivables 12.0 11.9 11.7 Cash and Cash Equivalents 64.4 44.5 57.9 Total Assets 1,201.7 1,024.9 1,104.1 Liabilit
Slide 15: New Business Volumes
New Business Volumes Half Year Ended 31 December (£ millions) 2006 2005 Annualised Regular premiums 8.7 8.3 Single premiums 8.6 7.6 Annualised Premium Equivalent 17.3 15.9 New Business Margin (%) 8.0% 8.0% 14
Slide 16: EEV Balance Sheet
EEV Balance Sheet MAKE UP OF EMBEDDED VALUE (EEV BASIS) 200 (£m ) 193.2 178.6 180 162.8 160 142.6 140 120 140.3 135.3 Value in Force 100 127.0 Value in Force 113.1 Net Worth 80 60 40 52.9 20 35.8 43.3 29.5 0 Jun-05 Dec-05 Jun-06 Dec-06 1 2 9 . 6 1 4 7 . 3 1 6 0 1 4 0 Net Worth Value in Force 1 2 0 1
Slide 17: Analysis of Change in EEV
Analysis of Change in EEV (£ millions) 31 Dec 2006 31 Dec 2005 New Business Contribution 10.3 9.8 Expected Return on Existing Business 3.2 2.6 Experience Variances 1.2 1.9 Operating Assumption Changes (3.9) 0.0 Expected Return on Net Worth 1.0 0.6 Investment Return Variances 2.3 5.4 Economic Assumpt
Slide 18: Cash flow
Cash flow Half Year Ended 31 December (£ millions) 2006 2005 Net Cashflow from Operating Activities 4.7 2.4 Returns on Investment 1.8 1.1 Capital Expenditure (0.1) 0.0 Net Cash Inflow 6.4 3.5 17
Slide 19: 4. Summary & Outlook
4. Summary & Outlook Leonard Polonsky Chairman
Slide 20: Summary
Summary Strong results with Profit After Tax up 28% APE up 8.8% and margins maintained High margin, low cost, scaleable, flexible business model Simple, risk reduced business model: products, distribution & geography Online service will continue to differentiate Maiden interim dividend Well position
Slide 21: Q&A
Q&A
Slide 22: Appendix
Appendix
Slide 23: Legal Structure
Legal Structure Hansard Global plc (Isle of Man) Hansard Hansard Hansard Hansard Hansard Europe International Development Administration Information Limited Limited Services Limited Services Limited Services Limited (Ireland) (Isle of Man) (Isle of Man) (Isle of Man) (Isle of Man) Information Life A
Slide 24: Strongly Capitalised Business
Strongly Capitalised Business REQUIRED MINIMUM MARGIN (RMM) COVERAGE (1) (£m) 70 8.1x 9.6x 12.5x 60 50 51.5 40 48.9 30 36.6 20 10 3.8 3.9 4.1 0 Jun-05 Jun-06 Dec-06 RMM Shareholder Capital (1) •x RMM Coverage (2) The Group has no borrowings, either long-term or short-term (1) Shareholder capital of
Slide 25: Details of EEV Methodology
Details of EEV Methodology Which parts of the Group are reported on an EEV basis? The entire Group, excluding future new business but including: – both life companies – subsidiaries providing administration, distribution and other services. – the holding company How do we define new business? New po
Slide 26: Key Areas of Hansard's EEV Methodology
Key Areas of Hansard’s EEV Methodology Allowance for risk A market consistent approach – future cash flows are discounted at the risk free rate – the assumed return on assets is also equal to the risk free rate (Hansard’s business has no guarantees over future investment return that require techniqu
Slide 27: Key Areas of Hansard's EEV Methodology
Key Areas of Hansard’s EEV Methodology Allowance for risk (continued from previous page) Other assumptions for future uncertainties – the assumptions reflect management’s best estimate of future experience, for example of future persistency rates and expenses – the risk that actual experience may va
Slide 28: Hansard Business Model
Hansard Business Model Low fixed costs Benefits of online functionality Operational Gearing Centralised product design & ‘manufacturing’ Attractive intermediary proposition Wide range of underlying funds Core of long-term intermediaries Online platform supports intermediaries Growing assets under ma
Slide 29: Sources of Revenue
Sources of Revenue Revenue is generated from FEES BY TYPE (1) Contract fee income £24.2 million – Establishment fees and other charges Fund management – Charges on policyholder- fees directed activity (e.g. fund 22% switching) Commission – Service charge (inflation receivable linked) 7% Fund managem
Slide 30: Product Features
Product Features Unit linking provides exposure to approximately 195 investment funds across a wide range of asset types Approx. 35% (1) of assets under administration invested through Fidelity, BlackRock Merrill Lynch, JP Morgan Fleming and Invesco Regular performance review by Hansard No guarantee
Slide 31: Secure, Robust and Resilient Online Platform
Secure, Robust and Resilient Online Platform Hansard OnLine Hansard Intermediaries Policyholders Highly visible audit trail for 24/ 7/ 365 access to 24/ 7/ 365 access to intermediary & policyholder information information contact policy info commission status Managing policyholder investment info cl
Slide 32: Hansard Product Suite
Hansard Product Suite Hansard uses three product families to construct a suite of single and regular premium investment opportunities Retirement Programme Capital Builder Personal Portfolios These can be customised and configured – at minimal cost to Hansard - in many different combinations, to meet
Slide 33: How does Hansard Distribute?
How does Hansard Distribute? Exclusively through intermediaries These intermediaries are: Independent financial advisers (IFAs) / individuals Groups of IFAs (e.g. deVere) Institutional intermediaries (banks, private banks, broker-dealers) Supported by our network of 14 relationship managers spread t
Slide 34: Where Do Hansard's Intermediaries Distribute?
Where Do Hansard’s Intermediaries Distribute? NEW BUSINESS BY GEOGRAPHY (1) Other (excl. USA) South America 7% 8% Africa 2% Middle East 11% Europe (excl. UK) 48% Far East 24% Over 470 active intermediaries servicing over 43,000 policies in over 170 countries Hansard Europe Limited writes policies so
Slide 35: Why Do Intermediaries Choose Hansard?
Why Do Intermediaries Choose Hansard? Hansard offers them local presence and support (through its relationship managers) Hansard Online provides them with a valuable support tool White labelling allows intermediary to promote their brand Helps build their business Client monitoring capabilities Poli
Slide 36: Hansard Online – Award Winning Platform
Hansard Online – Award Winning Platform Significant operational efficiency for intermediaries & Hansard 2.1 million queries processed online(1) 61,000 queries by phone / fax(1) Award winning “International Investment” magazine - Best Internet Servicer Award in 2003 & 2004 “International Investment F