Personal Group Holdings unveils annual profit fall

Personal Group Holdings Chief Executive Officer Mark Scanlon said 2012 was a significant year of investment as earnings and revenues decreased.

The UK employee benefits company reported annual earnings before interest tax, depreciation and amortisation (EBITDA of £9.9m, a fall from the prior year's £10.2m, in line with expectations.

Revenue also met forecasts at £27.4m, down from £27.5m in 2011, due to the group's decision to cease accepting new investment business into its financial services division Berkeley Morgan from last April.

Pre-tax profits dropped to £9.4m from £10m.

Scanlon said the results reflected costs associated with growing its online offering and increasing its recruitment, including the appointment of Chief Financial Officer Mike Dugdale and Commercial Director David Walker, along with the expansion of the sales team to meet demand.

During the year, the firm launched a new iPad application to provide management with key information on clients and make services more readily available to customers.

Scanlon expects the addition of new employees and the new iPad application will facilitate progress in 2013.

Based on this confident outlook, the company proposed a 4.5% increase in the dividend of 4.65p per share.

On the macro-economic front, Scanlon said the rise in the unemployment rate and the tough financial climate did little to hurt the business as the firm continued to benefit from its "loyalty to customers".

"The amount of times we go out and meet our customers personally has gone up over the years," he told Sharecast.

"We settled over 80% of claims within 24 hours. We want to have a good reputation."

Key sectors for the company include logistics, health care, hospitality and food services while retail remains the biggest challenge due to a high turnover of staff.

Looking ahead, Scanlon said the company has a strong pipeline of projects and partnerships in the pipeline including its "second biggest contract win" in history which will be announced in due course. However, Personal Group will be taking a cautious approach to acquisitions this year, he added.

The updated forecast for 2013 earnings is revenue of £28.7m, EBITDA of £10.5m and pre-tax profit of £10m.

RD