What Personal Group does
Personal Group Holdings PLC (LON:PGH) specialises in the provision of employee services, including engagement programmes provided to corporate clients for their employees use and insurance products sold directly to client employees.
Insurance products include hospital cash plans, convalescence plans and death benefit, while employee engagement services focus more on salary sacrifice schemes, retail and leisure discounts and rewards, as well as other services like electronic payslips and app push notifications to help communicate with employees.
Personal Group’s business is currently divided into four main segments:
• An insurance business, which provides most of the group’s profits
• Let’s Connect – a service that allows employees to buy home technology through payroll deduction and salary sacrifice
• Software-as-a-service (SaaS) business – which includes Hapi, a benefits platform and app, enabling client employees to access their benefits
• Innecto – a pay and reward consultancy that provides support to employers setting up pay and reward schemes for their staff.
How is it doing
The group, which paid a reduced quarterly dividend for the second quarter at the height of uncertainty over the pandemic, said in July it intends to return to a “full-fat” dividend of 5.9p per share for the third quarter; no decision has yet been made on the fourth-quarter dividend.
In the first half of 2020 underlying earnings (EBITDA) were £5mln, ahead of both 2019 and the company’s expectations at the start of the pandemic. Revenues were little changed year-on-year at about £30mln.
The group’s core insurance business performed well despite sales representatives being unable to sell insurance products face-to-face, though the inability to drum up many new insurance sales during the lockdown will have an impact on premium income in the second half of 2020 and part of 2021.
Retention rates for existing policyholders improved slightly, reflecting the value of the company's hospital plan and death benefit products during the pandemic, and claims levels remained relatively static, with reduced general activity within the NHS mitigating additional COVID-19 claims.
Revenue from PG Let's Connect, the technology salary sacrifice business, held up well during the period, with lockdown resulting in strong sales of home computing and outdoor equipment, but it remains a business where most of the activity takes place in the fourth quarter.
The pay and reward subsidiary, Innecto, saw demand for its consultancy services tail off during the lockdown but Personal Group said a number of sales opportunities are now starting to re-emerge.
What the boss says: Deborah Frost, chief executive
"Our robust recurring revenue model across the group has enabled us to weather the initial storm of COVID-19 and perform comfortably ahead of expectations, following the initial outbreak of the pandemic, for the first six months of 2020."
“The crisis will not be without consequences for us, however, and we are working hard to minimise the impact of both a period with minimal new sales activity and the predicted post-COVID-19 recession by widening our product offer, developing more channels to market, and ensuring that our policyholders are supported if they experience job changes and redundancy."