In its results statement, Hansard did not reveal the name of the Asian distributor that has stopped handling its products.
In prepared comments which accompanied the results, group chief executive Gordon Marr noted that a previously-announced review of the company’s new business strategy, aimed at diversifying new business flows and increasing the scale of the business, was under way, and an announcement of the review’s findings will be made on 4 March.
The results reported on Monday were limited to those of Hansard International alone, and do not include what remains of Hansard Europe. As reported, that Dublin-based operation was closed to new business with effect from 30 June 2013, after deciding that it was in the “long term interests of the group” to reduce exposure to the region.
In yesterday's results statement, Hansard Global said new business at Hansard International slid by 24.2% to £55.2m in the six months to the end of December, as new business margins, on a present value of new business premiums basis, fell to 7.5% from 10%.
Noting that the reduction in new business flows in the second quarter had been expected, Marr said new business in the second half, to the end of June 2014, was also forecast to be comparatively weak, “significantly below an exceptionally strong comparative in H2 2013”.
“We remain confident, however, that the group is well positioned in growth markets, and is appropriately capitalised to take advantage of distribution opportunities in the latter part of this financial year and in the future.
“The group’s strong capital position will allow it to pay dividends in line with the guidance previously provided.”
In a research note issued yesterday, Panmure Gordon said the fall in Hansard Global's sales had been "greater than we had antcipated", and had lowered its full year 2014 sales target forecast to £122m from £149m, and target price to 130p a share from 162p.
However, it maintained its "buy" recommendation on the company's stock, "believing that the shares will be largely under-pinned by the 9% dividend yield", and said it was looking forward to hearing the company explain its "new sales strategy" on 4 March.
Hansard Europe
Hansard Global is continuing its efforts to wind down the Hansard Europe operation, it said, with writs totalling approximately £2.5m remaining outstanding against it at the end of December, compared with £11.6m worth at the same period a year earlier. Plans approved by the Central Bank of Ireland to "achieve an orderly run-off of the activities of Hansard Europe have been implemented".
One area Hansard Global is seeking to grow is its OnLine operation, where it says it sees an opportunity to "increase service levels for policyholders and intermediaries and embed process efficiencies". More than 90% of regular premium new business cases were handled through its OnLine operation in the first half, and more than 90% of investment dealing transactions are now being handled there.
