LONDON (ShareCast) - The costs of a restructuring dragged pre-tax profits at Personal Group, down 55.1 per cent to 3.7m pounds, but the benefits are expected to flow during the coming year.

The employee benefits and insurance company said 2013 was a “transformational year” as it invested in a new management team to drive growth.

Last year marked the second year in the implementation of the group’s strategic plan to overhaul the business which is now complete.

Earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 11% to £8.8m, reflecting higher investment in the field sales organisation and claims costs which were ahead of historic levels.

Claims costs climbed to £5.8m from £4.2m in 2012, largely as a result of the increased core Hospital Cash plan business.

Basic earnings per share fell 65.3% to 7p, despite a 4.5% jump in revenues to £28.4m driven by the Employee Benefits unit, which achieved organic growth of 6.8%.

The introduction of iPads for presentations in the fourth quarter of the previous year helped to improve efficiency and effectiveness of sales.

Earlier this month the firm acquired Lets Connect IT Solutions Limited, a provider of home technology salary sacrificing, for £12m.

The group won a number of significant contracts last year including with Network Rail, 2Sisters. Last week it secured a contract with Four Season’s Healthcare.

“We did what we said we were going to do. Results were expected and we had some very big wins so we are feeling very positive about the business and its growth prospects,” Finance Director Mike Dougdale told Digital Look/Sharecast.

He added that he expects to see the benefits of the restructuring come through in fiscal year 2014.

The group raised its 2013 dividend by 4.5% to 18.6p per share.

Cenkos gave the group a 'buy' rating, saying earnings exceeded its expectations.

"The combination of increasing conversion rates and a growing market through customer wins presents a strong future growth profile for the Group. Earnings are forecast to grow 17.6% in full year 2015," Cenkos said.


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