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Personal Group weathers the COVID-19 storm to grow profits and revenues

Personal Group made a solid start to the year, with half-year trading ahead of management's expectations at the start of the pandemic

Personal Group Holdings PLC -

Personal Group Holdings PLC (LON:PGH) achieved revenue and profit growth in the first half of 2020 despite the impact of the coronavirus (COVID-19) pandemic.

Group revenue in the six months to the end of June 2020 rose by 1.3% to £30.4mln, up from £30.0mln in the first half of 2019.

Adjusted underlying earnings (EBITDA) climbed 9.9% to £5.0mln from £4.5mln the previous year while profit before tax increased 2.3% to £4.2mln from £4.1mlm.

The employee services provider said its balance sheet remains strong with cash and deposits of £19.0mln and no debt.

The group's core insurance division saw adjusted EBITDA jump by 16% to £4.5mln from £3.6mln despite revenue dipping a little from last year’s level.

Claims ratios remained fairly static, with additional COVID-19 claims mitigated by reduced levels of general activity within the NHS more widely. The company's face-to-face sales activity was put on hold during the pandemic lockdown, resulting in reduced new insurance sales of £2.1mln annualised premium (2019: £4.6m), which will have an impact on premium income in the second half of 2020 and into 2021.

On the plus side, the lockdown restrictions also resulted in reduced employee and associated costs while team members were off the road.

Sales in PG Let's Connect, the company's salary sacrifice technology business, eased to £5.2mln (2019: £5.8m). The group has widened the product range to capitalise on people spending more time at home.

The company's software-as-a-service (SaaS) business saw revenues climb to £10.2mln from £8.8mln in the first half of 2019.

Personal Group said the market for employee benefits remains strong, with businesses looking to implement and/or develop their benefits programmes further.

“COVID-19 has also increased market awareness on the importance of employers having a benefits programme for their employees, particularly one with a focus on well-being. Personal Group has a strong proposition and is well placed to deliver these solutions into the market,” the group said in its results statement.

Nevertheless, the second half of the year will not be without its challenges, the company added, with the prospect of a recession in the UK looming large.

“However, health and well-being will undoubtedly become a significant focus for all employers going forwards and the company remains well placed to help them deliver on this,” it said.

Given the uncertainty, Personal Group has opted not to provide market guidance currently.

It also announced that non-executive chairman Mark Winlow is to step down at the annual general meeting next April while Andrew Lothian has expressed a desire to move to a non-executive position on the board at the beginning of next year.

"Our robust recurring revenue model across the group has enabled us to weather the initial storm of COVID-19 and resulted in continued growth, delivering a first half ahead of the same period in 2019. The pandemic 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 or redundancy,” said Deborah Frost, the chief executive of Personal Group.

“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,” she added.

“In protecting the unprotected, we are proud to say that we have supported bereaved families and hospitalised policyholders throughout the COVID crisis - making sure all claims were paid in full as quickly as possible. It is more important than ever that employers look after the health and well-being of their workforces, ensuring they have the appropriate cover in place if they fall ill,” Frost concluded.

Shares in Personal Group rose 5.6% to 263p in the first hour of trading.

Quick facts: Personal Group Holdings PLC

Price: 200 GBX

Market: AIM
Market Cap: £62.44 m

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