For the 2017 financial year, the Isle of Man-based life company reported underlying IFRS profit after tax for the year was £7.7m ($10m, €8.7m) compared with £8.3m in the previous financial year.
This compares with 2016 when Hansard reported year-on-year growth despite a halt in new business expansion in the Middle East and Africa region during the fourth quarter.
“This (the 2017) figure reflects a charge of £1.1m taken as a provision against balances due from a brokerage firm which has experienced financial difficulties during the year,” said Hansard chairman Philip Gregory.
“Underlying profit for FY 2017 was £8.8m compared to £9.2m for FY 2016. This underlying performance reflects the development of the Group’s international business within Hansard International, offset by reducing Hansard Europe income and increased legal defence costs.”
He concluded: “The board is pleased to see the continuing growth of the business but is clear that further growth is required to achieve increased economies of scale and improved margins.”
European litigation exposure
The group continues to manage litigation exposures of Hansard Europe. Outstanding writs total €16.3m (£14.3m $18.6m), up €600,000 from the half-year. Hansard said it had strong arguments and successfully defended net claims of approximately £300,000 during the year.
New business expressed as present value of new business premiums (PVNBP) was up 24% on the 2016 fiscal year to £148.3m ($193m, €168.4m).
“Our annual results again demonstrate the continuing trend of strong, diversified levels of new business growth across all the regions in which we operate.” said Gordon Marr, Hansard’s group chief executive.
“We are confident that we can continue to leverage opportunities for growth while maintaining an efficient cost base and that this will ultimately produce attractive returns,” he said.
Brexit-driven foreign exchange gains in 2016 of £1m were not repeated in 2017, although a weaker sterling has pushed the group’s fee income up to £52.6m ($68.5m, €59.7m) from £51.3m in FY 2016.
“Increased sales volumes in Hansard International have more than offset a reduction of £1m in fee income from our closed book of business in Hansard Europe,” it reported.
Performance by geography
Hansard made £7.8m ($10.1m, €8.8m) profit before tax in the Isle of Man, down from £8.3m in 2016, and made a £100,000 ($0.13m, €0.11m) loss in Dublin, down from a small profit in the centre of £100,000 in 2016.
Basic initial commission paid to intermediaries was down across the Middle East and Africa to £3m ($3.9m, €3.4m) from £4.5m to £3m ($3.9m, €3.4m) in 2016.
In the Far East and Latin America commission payments increased, and in the rest of the world it rose £1.9m to £3m ($3.9m, €3.4m).
Assets under Administration, costs and dividend
Group assets under administration remained little change, increasing from to £148.3m ($155.3m, €168.4m) from £119.3m.
Administration costs were also steady despite the PVNBP increase, and the final dividend will be 5.3p, the same as 2016.
