hansard globals shift to reg prem pays off

The company’s after-tax new business margin during the period was 10.4% in the six months, compared with 7.4% in the same period a year earlier, as regular new business sales of regular premium products leapt 41% to £67.6m, from £47.9m.

At the same time, new business sales of single premium products plunged 67% to £22.1m from £66.6m.

Analysts said the results had been impacted by market and currency variances, that held back asset-based fee income. A "higher proportion of clients requesting a reduction in premiums as well as ceasing their premiums" was also noted.  

At midday, the company’s shares were up by less than 1%, at 150p, valuing the company at £205.94m. In  a note to investors this morning, Numis said the results "demonstrate Hansard remains much too cheap and we re-iterate our buy rating".

It added: "The group are now sourcing a significant amount of new business from wealthy investors in EM countries (LatAm and the Far East), who typically make relatively small (in the context of their wealth/income) monthly investments (as part of a much wider portfolio) into a Hansard offshore savings plan.

"The company estimates it will generate a lifetime [internal rate of return] in excess of 15% on the capital required to set up and run these policies, which we regard as economically attractive."

Hansard, which is listed on the London Stock Exchange, was founded by Leonard Polonsky as Liberty Life in the UK in1970, and floated on the LSE in 2006.

In a statement accompanying the results today, Polonsky, who remains chairman, attributed the growth in the six month period to “continued investment in distribution infrastructure, and focus on particular markets such as the Far East and Latin America”, which he noted had taken place in spite of difficult economic conditions.

Hansard Global, six months ended 31 December 2011 

 *Present value of new business premium basis