Date: Thursday 26 Sep 2013
LONDON (ShareCast) - Litigation payments and the closure of its continental European business held back profit growth at long-term savings specialist Hansard Global.
The FTSE SmallCap listed firm, which provides life assurance wrappers to independent financial advisers and their clients, saw its statutory post-tax profit fall 7% in the year to the end of June, having achieved a record level of regular premium new business of £156.2m.
However, if prior to the exceptional items of litigation and closure costs the business would have recorded a 14.4% increase to £12.7m.
Furthermore, profits reported according to the European Embedded Value (EEV) basis used by life insurance companies to reflect their long-term value, would see profit for the year of £17m, compared with a loss of £13.7m in the previous year,.
The EEV profit was driven by increased new business profits and investment returns, as the former FTSE 250 company made its operations more efficient with the removal of certain costs and reduction of staff numbers from 243 to 209.
These savings were outweighed by the effects of those litigation settlements of £1.6m, and by the charge of £0.4m taken in relation to the closure of Hansard Europe to new business in the current year but Chief Executive Officer Gordon Marr is confident about their effect in future years.
Looking forward, he said: “We plan to refresh certain aspects of the Group's new business strategies with our new Chief Distribution Officer, Graham Morrall, in order to further diversify new business flows, reduce risk and increase the scale of our business.
“Whilst wider market conditions are uncertain, we are confident that our strategy of focusing on regular premium business in growth markets will maintain growth in new business and that our investments in terms of recruitment, Hansard OnLine and infrastructure will continue to bear fruit."
Shares in HSD were up 2.5% to 121p at 08:30 on Thursday.
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