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Personal Group targets new opportunities in employee rewards sector after first half meets expectations

Snapshot

  • Specialises in insurance and the provision of employee benefit schemes
  • New CEO wants to double underlying profits by 2025
  • Hapi mobile platform will drive this underpinned by insurance arm

Quick facts: Personal Group Holdings PLC

Price: 351 GBX

AIM:PGH
Market: AIM
Market Cap: £109.58 m
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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 that currently 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

Group revenue rose 42% to £30mln (2018: £21.1mln) in the half-year to June, which included a £6.3m increase in transactional spend and a sharp rise in the commission to £7.4mln from mobile app Hapi.

Profit before tax increased 5.6% to £4.1mln (2018:£3.9mln) while balance sheet cash was £19.2m with no debt.

Deborah Frost, the chief executive, said insurance performed well through new sales were slower than expected.

Salary sacrifice arm Let’s Connect and recent acquisition Innecto both saw strong sales growth, she added, while a deal to cross-sell its benefits offering to SME customers of accountancy software giant Sage went live this month (September).

The interim dividend rose 1.3% to 11.65p.

 

Watch the video

 

Blue Sky

Debrah Frost took over as CEO when the company acquired Innecto.

Her first move was to launch a strategic review, the results of which are an aspiration to double underlying profits (EBITDA) by 2025 and to attract one million users on the Hapi platform.

"We intend to grow the insurance business by widening our accessible market to include the 'gig' economy for current and new clients, improving the attractiveness of our offer to employers and policyholders and retaining more policyholders for longer.

"This is expected to be delivered by disrupting core markets and driving profitable growth by growing the lower cost of acquisition segments with new products and cross-selling across the Group.

"We intend to increase client/customer penetration and retention across all markets."

We will seek to build a more balanced and broader portfolio that focusses on long-term profit and dividend growth, with less reliance on existing core markets.

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Elevator Pitch - Personal Group Holdings PLC

Personal Group Holdings PLC'S (LON:PGH) chief executive Deborah Frost pitches the company to investors. The business specialises in the provision of employee services, including engagement programmes provided to corporate clients for their employees use and insurance products sold directly to...

1 week, 4 days ago

RNS

Director/PDMR Dealing

2 weeks, 5 days ago

Holding(s) in Company

3 weeks, 3 days ago

Interim Results

3 weeks, 6 days ago

Dividend

on 25/7/19

Trading Update

on 25/7/19

3 min read