Personal Group PLC (LON:PGH), the employee services provider, said it had a positive first half of 2020 with underlying earnings (EBITDA) ahead of 2019.
The company said much of the first half of the year was spent preparing for and dealing with the coronavirus (COVID-19) pandemic, which happily did not have as big an impact on its business as feared.
While half-year revenues were little changed year-on-year at about £30mln, EBITDA of around £5mln was ahead of the company’s expectations at the start of the pandemic.
The group, which paid a reduced quarterly dividend for the second quarter at the height of uncertainty over the pandemic, said 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.
The group’s core insurance business performed well despite the company’s sales representatives being unable to sell insurance products face-to-face. It did advise investors, however, that 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.
"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,” Deborah Frost, the chief executive officer of Personal Group said in the trading update.
“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. I am confident that we are in a strong position to deliver against these objectives and we have used the period of lockdown constructively to develop our business to deliver future stability.
"We are proud to have been paying out on Covid-19 claims and supporting bereaved families and hospitalised policyholders, as well as our own employees, through this difficult period,” she concluded.