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Personal Group Holdings Plc
Annual Report and Accounts 2023
Overview
01
2023 Highlights
02
Why Invest in Personal Group?
03
Our Business at a Glance
05
Chair’s Statement
08
Chief Executive’s Statement
Governance
36
Corporate Governance
38
Board of Directors
40
Risk and Compliance Committee Report
41
Audit Committee Report
44
Remuneration Committee Report
48
Nominations Committee Report
50
Directors’ Report
51
Statement of Directors’ Responsibilities
Strategic Report
12
Our Business Model
13
Our Strategy in Action
18
Key Performance Indicators
20
Chief Financial Officer’s Statement
25
Risk Management
28
Environmental, Social and Governance
34
Section 172 Statement
Financial Statements
52
Independent Auditor’s Report
60
Consolidated Income Statement
61
Consolidated Balance Sheet
63
Company Balance Sheet
64
Consolidated Statement of Changes
in Equity
65
Company Statement of Changes
in Equity
66
Consolidated Cash Flow Statement
68
Company Cash Flow Statement
69
Notes to the Financial Statements
103
Company Information
Personal Group provides
benefits and services
focused on improving
employee health, wellbeing
and engagement.
Contents
For the latest Investor relations:
www.personalgroup.com/investors
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
Strategic Report
Governance
Financial Statements
Overview
Read more in our strategy in action |
Page 13
Record year for new
insurance sales
New annualised insurance
sales of £11.8m (2022: £9.5m).
High policyholder
retention rates
Year on year retention rates
for our insurance products
remained strong at 82.5%
(2022: 81.0%).
Significant new
contracts secured
133 new client wins across
the Group (2022: 101).
High client
retention rates
Strong retention rates
across the Groups SaaS
offerings resulted in an
increased ARR of £6.7m
(2022: £5.6m) as at the
end of the year.
Continued growth
of SME offering
The Sage partnership
continued to grow reaching
over 56,500 paying
employees on the Sage
Employee Benefits (SEB)
platform at the end of 2023.
Internal launch
of Hapi 2.0
The next generation of
our employee benefits
platform was launched
internally in September 23.
2023 Highlights
Group Revenue
£49.7m
(2022 restated*:
£49.8m)
Basic EPS
13.8p
(2022: (23.2p))
Profit/(Loss) before tax
£5.3m
(2022: (£6.8m))
Unique Client Number
555
(2022: 502)
Cash & Deposits
£20.1m
(2022: £18.7m)
No. of Insurance Payers
97,327
(2022: 94,877)
Adjusted EBITDA
£8.1m
(2022: £6.0m)
Dividend Per Share
11.7p
(2022: 10.6p)
Financial
Non-financial
Operational
*
please see page 21
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
Governance
Financial Statements
01
Strategic Report
Overview
Why Invest in Personal Group?
A progressive, profitable business addressing
a growing market.
The right offering for
today’s world
The world of work is changing, and our
offerings are needed now more than ever.
Employers are more aware and more
determined to support the wellbeing of their
employees, to help retain and incentivise
their workforce. Meanwhile, the ongoing
effects of long-COVID and NHS wait lists
have highlighted the potential impact of
poor health on people’s ability to maintain
their income and support their families.
Hapi Platform Retention
95%
2022: 95%
Year on Year Insurance Retention
82.5%
2022: 81.0%
See our strategy in action |
Page 13
Unique sales proposition
with high levels of brand
awareness
Our market review has identified that we
are the only affordable insurance offering
delivered via a face to face sales model, and
that this is the sales method that is most
effective in our target markets.
It has also identified that our brand is well
known and liked, providing a fantastic basis
for future growth of our customer base.
Unique Client Numbers
11%
to 555
2022: 502
SME Customers Via SEB
40%
to >3,900
2022: 2,800
See our business model |
Page 12
Strong financial
position
We have achieved strong growth in
profitability, driven by record new insurance
sales and new client wins. We are profitable,
cash generative, debt free with a strong
balance sheet and dividend paying.
We have seen recurring revenue streams
grow in 2023 by 14% to over £38.3m. This
high level of revenue visibility means we
can be confident in our continued growth.
Cash & Deposits of
£20.1m
2022: £18.7m
Dividend Per Share
11.7p
2022: 10.6p
See our CFO statement |
Page 20
Large growth
opportunity
The investments we have made in expanding
our offerings, sales team and partnerships
mean we have a stronger business,
with an increased growth opportunity.
Informed by our market review, the Group
developed a targeted marketing strategy
aimed at specific customer types and the
most appropriate market segments. Our
addressable market is now the majority of
the UK workforce, either addressed directly
or through our partners, such as Sage.
Our market research has shown there are
approximately 9.8m employees in the UK
without or with partial short-term sick pay
support and approximately 2.8m employees
with no short-term support.
Activated Users on Hapi and
Sage Employee Benefits
635,733
2022: 582,733
ARR for SaaS Licences
£6.1m
2022: £5.6m
See our business at a glance |
Page 03
Personal Group Holdings Plc
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Annual Report and Accounts 2023
Strategic Report
Governance
Financial Statements
02
Overview
Affordable
Insurance
On weekly or monthly
rolling contracts
Insurance
– hospital plan, convalescence
plan, and death benefit policies,
underwritten by Group subsidiaries.
Our easy to understand, affordable plans
are secured for the lifetime of the policy,
providing peace of mind for diverse
workforces from across society.
Hapi
– is our technology platform that
powers growth through enhanced
connectivity, engagement, health
and wellbeing.
Sage Employee Benefits
– our tailored
engagement product designed for the
SME market.
Innecto & QCG
– offer strategic consultancy
on pay and reward through their experts
and a suite of cloud-based SaaS solutions
and surveys.
Clients can tailor their solution with our
experts to help them define and implement
fair, consistent reward programmes
that align to their business strategy
and workforce.
Let’s Connect
– delivers a benefit scheme
that allows employers to give their
employees affordable access to the latest
consumer technology and a variety of high-
end products from leading manufacturers.
Employees can spread the cost either by
salary sacrifice or net pay arrangements.
Read about Saga | 
Page 16
Read about the Merseyrail |
Page 14
Read about Natures Menu | 
Page 15
Read about our business model | 
Page 12
Benefits
Platform
Delivered to employers directly
and through channel partners
Pay & Reward
Consultancy and
software solutions
Other Owned
Benefits
Access to consumer
technology
Helping employees
thrive in work and in life.
Personal Group provides consultancy, benefits and technology services
focused on improving employee health, wellbeing and engagement.
Our mission is to build great working environments where people
flourish and shine.
Our Business at a Glance
Annualised Premium
Income
£31.6m
(2022: £28.0m)
Benefit Platform ARR
£6.1m
(2022: £5.0m)
Pay & Reward ARR
£0.6m
(2022: £0.5m)
Number of orders
17,668
(2022: 34,297)
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
Governance
Financial Statements
03
Strategic Report
Overview
Driving insurance sales
through new and existing 
partners and channels
Our Business at a Glance
continued
Transforming reward and benefits
Accelerating our
SME offer
We offer a uniquely holistic market proposition, spanning insurance, employee benefits, and reward consultancy, allowing us to cater to every
sector of UK business and offer relevant, timely and price‑appropriate services that help companies address these key themes.
Product offering by vertical
Read about Merseyrail | 
Page 14
See Merseyrail case study | 
Page 14
See Saga case study | 
Page 16
See our business model | 
Page 12
See Sage case study | 
Page 17
Read about Natures Menu and Saga | 
Pages 15 and 16
Read about our partnership with Sage | 
Page 17
Our growth strategy is based on three key areas focused on widening our footprint across a broader range of industry sectors.
Enterprise
eg: Royal Mail Group,
Cranswick
Fair-deal health and
life insurance products
Our digital benefits platform –
Hapi
Talent-Driven
eg: Skyscanner, Refinitiv
Pay and reward
consultancy (Innecto & QCG)
Our digital benefits platform –
Hapi (our flex option ‘Hapiflex’
is likely to be the most relevant)
Public Sector
eg: Sandwell & West
Birmingham NHS Trust
Other owned benefits
(Let’s Connect)
Our digital benefits platform –
Hapi (our flex option ‘Hapiflex’
is likely to be the most relevant)
SMEs
eg: Any enterprise
with <250 employees
Digital benefits platform
(Hapi white-labelled as
‘Sage Employee Benefits’ (SEB))
Our markets
Our strategy
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
Strategic Report
Governance
Financial Statements
04
Overview
Chair’s Statement
“It has been
a year of
continued
progress for
Personal Group”
Martin Bennett
Non-Executive Chair
05
Strategic Report
Governance
Financial Statements
Overview
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
It has been a year of continued progress for Personal Group,
in which we have performed well amidst a challenging
market backdrop, delivering on our financial objectives while
responding positively to a change in leadership.
HR teams across the UK have had to focus their efforts
on dealing with the well-documented market challenges,
such as the decreased availability of labour, and increased
employment costs. We have nonetheless continued to win
customers at a steady rate, supporting the wellbeing of key
workers across the country, a historically underserviced and
growing segment of the UK workforce.
I would like to thank the team for their continued hard work,
with this year’s results again reflecting the quality and
diligence of our people. It is clear to me that we have a solid
foundation on which to grow, bolstered by increasing levels
of revenue visibility for 2024 and beyond. I look forward to
the future with confidence.
A year of change
In August 2023 we welcomed Paula Constant to the Group
as Chief Executive Officer. Paula has brought with her strong
strategic acumen and over 20 years of telecoms, banking, and
outsourcing experience, largely gathered from multinational
organisations. Paula has had a significant impact on the
business in a short period of time, reinforcing my faith in her
to take Personal Group to its next stage of growth.
Under Paula’s leadership, a review of the Group’s strategy
is being undertaken to identify the greatest opportunities
to improve profitability and drive longer term growth in the
business. A detailed analysis of our market has validated the
strength of our insurance offering and the sectors we are
best placed to target. Paula has simplified the organisational
structure of the Group, with the senior leadership team
refreshed by key hires, and introduced new operational KPIs.
With the transitionary period now complete and Paula fully
integrated into day-to-day operations of the business, we look
forward to the Group further progressing under her leadership.
I would like to take this opportunity to thank Deborah Frost for
her contribution to Personal Group, first as a Non-Executive
Director, and then as Chief Executive. Deborah’s stewardship
in successfully navigating the business through the pandemic
was excellent, and it was her work which laid the foundations
for Personal Group to emerge as a stronger business and to
return to a growth trajectory. On behalf of the Board, we wish
her all the very best with her future endeavours.
Solid delivery
We have successfully delivered across our KPIs in the year,
achieving increased revenue and EBITDA in line with market
expectations in all segments except Let’s Connect. We are
strengthened by a robust balance sheet and our highest
ever rate of recurring revenue, providing high levels of
visibility for 2024 and beyond.
Following the reinvigoration of the insurance division
in 2022, I am particularly pleased with the ongoing
momentum gathered across our core Affordable Insurance
offering in 2023, which has gone from strength to strength
in the year, driven by a record level of new sales and high
retention rates amongst existing customers.
Benefits platform revenue has also continued to grow,
delivering increased levels of annual recurring revenue
(“ARR”). We are pleased to have successfully launched the
next generation of our platform, Hapi 2.0, internally. The
initial external launch and migration began in early 2024.
The contribution from Pay & Reward and Other Owned
Benefits remained steady throughout the year, in line with
the Board’s expectations.
Unique client number
555
(2022: 502)
Annualised premium income
31.6m
(2022: 28.0m)
Dividend per share
11.7p
(2022: 10.6p)
Chair’s Statement
continued
Personal Group Holdings Plc
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Annual Report and Accounts 2023
Strategic Report
Governance
Financial Statements
06
Overview
ESG
A key feature of Personal Group’s business
is the caring attitude towards people and
communities. This is reflected not only in
our aim to improve employee engagement
and support people’s physical, mental, social
and financial wellbeing, but also in how the
business is run.
We remain committed as a Board to
maintaining high standards of ESG and during
the year we made progress in executing
against our ESG strategy. We have worked on
reducing our carbon footprint, continued to
foster an inclusive, progressive and diverse
working environment, while ensuring a
robust corporate governance framework.
We have incorporated ESG success metrics
into our Executive remuneration for the last
few years and from 2024 will be extending
this to the group bonus scheme, applicable
to all employees, to encourage greater
engagement across the entire business.
Our Board and senior leadership have a deep
understanding of the business and industry,
and a proven track record in scaling-up
businesses and extensive commercial
experience. They are committed to ensuring
Personal Group couples innovation with
strong financial stewardship and delivers on
its purpose to the benefit of all stakeholders,
whether they be customers, employees, our
communities or shareholders.
We are proud of the diversity of our
business, from Board level through to our
teams, and we will continue to be driven
by our social purpose.
See our Social section of ESG | 
Page 28
experienced and engaged.
The right team in place
Read more online:
www.personalgroup.com/about-us/
Women on the board
43%
(2022: 43%)
Independent directors
57%
(2022: 57%)
Dividend
I am pleased to announce that the Board has
recommended a final ordinary dividend of
5.85 pence per share which will be paid to
shareholders on 8 May 2024. This makes a
total ordinary dividend for 2023 of 11.7 pence
per share.
Outlook
This has been a year of positive change
for Personal Group. We have continued to
gather momentum, focusing on enhancing
the quality and organisational structure of
the business to exploit our opportunity.
With the first phase of the review of Group’s
product and markets complete, we have
a clearer sense of our positioning, vision
and areas of focus, leaving us well-placed
to maximise value for shareholders. I look
forward to the results of the second phase of
the review and am excited by the opportunity
that lies ahead.
Martin Bennett
Non-Executive Chair
18 March 2024
Personal Group Holdings Plc
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Annual Report and Accounts 2023
07
Strategic Report
Governance
Financial Statements
Overview
Chair’s Statement
continued
Chief Executive’s Statement
“I am confident that
Personal Group has
solid foundations
from which we can
deliver an accelerated
rate of growth.”
Paula Constant
Chief Executive
08
Personal Group Holdings Plc
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Annual Report and Accounts 2023
Strategic Report
Governance
Financial Statements
Overview
Q: Which business leader has
inspired you and why?
There are far too many inspirational
leaders to mention, but my time at BT
was a splendid amalgamation of deep
commercial focus combined with strong
ethics under John Petter, incredible passion,
pace and belief that anything is achievable
under Liv Garfield, and brave commercial
differentiation with Gavin Patterson’s move
into BT Sport. All three have an incredible
ability to get across breadth and detail up
and down an organisation.
Q: What are you most proud
of in your career to date?
Turning around the Business Engineering
performance in Openreach whilst pregnant,
and the incredible pace of shifting work
from physical sales and service channels to
online through Covid at National Australia
Bank have been monumental experiences
involving bottomless resilience and selfless
team work – it was a huge privilege to have
led teams through both periods.
Q: What is your approach/ethos
in running a business?
I bring drive, focus, energy and
determination to each role and I like
to galvanise the organisation to think
ambitiously, act with decision and to be
intolerant of processes, procedures and
ways of working which are unsympathetic
to customers’ needs. I highly value a
forensically analytical fact-based approach
and I am used to running bold and pacey
transformation programmes. I am also a
huge believer in building the team that plays
together, supporting, and taking the time
to develop, each other.
Q: How have you started to apply
that to Personal Group?
We are undertaking forensic analysis up and
down the business to size the market, target
relevant sectors and build out the KPIs that
move our operations forward.
Q: How important is ESG
within that?
Doing the right focused activity is important
to me. For example, we have some real
work to do on the ground: lots of policies to
rewrite, starting with maternity, paternity
and carers’; volunteering in our local
community for causes that align with our
offerings of affordable benefits; increasing
our appeal as a diverse employer. There are
some more challenging priorities which
on the surface are harder to accelerate
because they depend on many external
influences – for example, the future use
of our building space, accelerating a greater
use of electrical charging in our hybrid
fleet when we have various customer
sites with no provision – so we are building
a bolder plan of influence across our
supplier and customer base to improve
our environmental impact.
Q: What are your areas of focus
for the coming months?
We’ve set out our focus this year on
Strategy, Sales and Simplification. We are
thoroughly analysing the role of our
benefits portfolio to determine strategies
for each area of the business. Focusing on
the right activities to accelerate sales across
marketing, account management and
transformational activity is key to unlock
our 3-5 year plan.
There is a lengthy list of simplification
activities, from underpinning every
operational metric in the business,
streamlining our end to end support,
improving our processing times across all
areas, and making our people initiatives and
policies simpler and more meaningful.
Initial reflections
International leader
Held senior positions in the
US, Europe and Asia
Paula Constant CV
International leader
Held senior positions in the US,
Europe and Asia
Track record of delivering innovative
strategic solutions, growth and
shareholder value at:
National Australia Bank, Mitie, BT,
Vodafone, Accenture and most
recently, Woven
Experienced in:
Technology
·
Digital
·
New business
Strategy
·
Banking
·
Product innovation
Sales and marketing
·
M&A
National Awards:
2016 Leader Award Winner, Everywoman
Technology Awards
Years of experience
22
Children
02
Employees managed
5,000+
Q&A with Paula Constant.
09
Personal Group Holdings Plc
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Annual Report and Accounts 2023
Strategic Report
Governance
Financial Statements
Overview
Group Chief Executive’s Statement
continued
I am pleased to report on this positive set of results
delivering strong growth across the core Affordable
Insurance and Benefits Platform offerings. The financial
performance speaks to the quality of both the offerings
and the team, whose efforts have driven a record year of
insurance sales, and an increased proportion of recurring
revenue, despite a testing trading environment.
Since assuming the role of Chief Executive, I have focused
on invigorating the energy of the organisation, our customer
focus, and the pace at which we deliver our services,
preparing the business to build upon its solid foundations.
As part of this process, I initiated an external review of
the Group’s product offering, market position and market
opportunity to inform the strategic direction of the
business and position Personal Group to drive sustainable
long-term growth.
The first phase of this review, which concluded in December
2023, included market mapping and insight into the size
and segmentation of the UK employee benefits landscape
applicable to our core insurance offering. This confirmed
the ongoing relevance of our insurance products and
emphasised the industries which present the largest
opportunities to the Group. The market mapping also
confirmed that Personal Group has a clear competitive
advantage through being the only ‘face to face’ sales-led
offering in its area of the market and that there remains
a large addressable market opportunity. Informed by the
research, we have developed a targeted marketing strategy
aimed at specific customer types and the most appropriate
market segments for our insurance offerings being, in the
first instance, construction, transport and production.
The second phase of the review is nearing completion and
aims to determine the Group’s opportunity in benefits
platform provision and assess success factors across various
market segments.
The initial results of the review have highlighted that the
Group has a strong, repeatable business and currently
operates in the right segments with clear options for
strategic growth available. As the detailed outputs of the
review are digested and assessed, they will serve to inform
and provide focus to our detailed Group strategy update
later in the year, which will also consider the most effective
way to optimise performance in the Pay and Reward and
Let’s Connect segments.
Sales and Operational Review
We made good progress in the year under each of our three
strategic areas of focus: driving our Affordable Insurance
sales, transforming reward & benefits offerings, and
accelerating our SME offering.
Affordable Insurance
Key achievements in 2023 were the improved delivery and
productivity of the face-to-face sales team, helping to deliver
a record year for new annualised insurance sales of £11.8m,
up 24% from 2022. We continued to reduce the time spent
working away from home for the sales team, to improve
their wellbeing, and implemented new tools and operational
enhancements to support FCA Customer Duty and ensure
better outcomes for customers. £6.8m of claims payments
were made to support policyholders in 2023 (2022: £6.4m)
and customer retention rates remained high, demonstrating
the value employees place on the Group’s product offering.
New client wins across the group
133
(2022: 101)
Annualised new business premium
£11.8m
(2022: £9.5m)
Platform annual recurring revenue
£6.1m
(2022: £5.0m)
Chief Executive’s Statement
continued
As a result of all the above, the insurance book increased from
£28.0m in 2022 to £31.6m in Annualised Premium Income at
the end of 2023, setting us up for further success in 2024.
In 2024 we will increase our focus on specific sectors
identified as offering the largest opportunities for growth,
continue to review our insurance product offering, progress
opportunities to partner with other benefits providers to
promote their benefits platforms alongside the sale of
insurance and explore opportunities to partner with third
party providers to offer alternative products that would
benefit our growing client base.
Transforming Reward & Benefits
The internal launch of the next generation of our benefits
platform, Hapi 2.0, and subsequent go live of our first new
client in January 2024 marks a key highlight for the year.
The new and enhanced platform, now with improved
Reward and Recognition functionality, navigation, search
capabilities, onboarding processes, and modularisation for
tiered and self-serve offers, sets the service up well for
sustained success. We won 31 new Benefits clients in 2023
(2022: 22) which helped to drive growth in Hapi related
annual recurring revenue up 29% to £2.5m (2022: £2.0m).
We also secured a place on the Crown Commercial Framework,
providing a new avenue for customer acquisition in 2024.
Our focus for 2024 will be the external launch of the full
functionality of Hapi 2.0 alongside existing client migration.
In addition, we anticipate that the development of a new
‘career pathways’ product, for the Pay & Reward segment,
will provide an opportunity for upsell to our customer base
and increase the attractiveness of our offering.
Personal Group Holdings Plc
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Annual Report and Accounts 2023
Strategic Report
Governance
Financial Statements
10
Overview
Contribution from Pay & Reward, comprising Innecto
and QCG, remained steady in the year with ARR of £0.6m,
despite market demand being affected by wider economic
challenges. The combination of the Innecto and QCG
consultancies was completed in the year, aiming to create
operational efficiencies.
As previously announced, Other Owned Benefits (Let’s
Connect) had a challenging period with the cessation of
a long-term scheme with a major client in March 2023.
Notwithstanding, the business performed resiliently and
performance was in line with management’s expectations.
SME Offering
We have an SME version of Hapi pre-populated, with key
benefits, taken to market through our partnership with
Sage as Sage Employee Benefits (SEB) which now serves
around 4,100 clients and 60,000 employees. Areas of
focus in 2023 were the improved onboarding journey for
both account managed and digitally onboarded clients,
the improvement of the end-to-end customer journey to
improve lifetime value of clients going onto the platform,
and the preparation for launch of SEB 2.0 in 2024. SEB 2.0 is
based on Hapi 2.0 and aims to increase the attractiveness of
the offering and accelerate uptake, with a new look and feel.
We saw steady growth in SEB annual recurring revenues in
the year, to £3.7m (2022: £3.0m).
In early 2024, we began working alongside Sage to migrate
all clients onto SEB 2.0 with this expected to conclude
in the coming months. We are continuing to develop a
premium version of SEB with a wider range of benefits
to attract businesses at the larger end of the SME market
and progress conversations with prospective partners in
different markets to increase the number of routes to the
SME market.
Organisational change
In addition to the Group’s market review, we conducted a
review of our internal operations with a view to enhancing
visibility across the organisation on delivery against our
strategy and to drive profitability. We are in the process of
implementing more granular operational KPIs, particularly
across our sales processes and pipeline, giving greater
visibility into the effectiveness of our lead conversions and
opportunities for process improvements.
As part of our preparation for growth at pace, we have
streamlined the operations of the business, creating a new
senior leadership structure. This has included the hiring,
post-period end, of a new Chief Operations Officer, with
our current Chief Operations Officer moving into a tech
transformation role, and a new interim Chief People Officer,
to ensure the success of this vital piece of our strategy.
Future outlook
I am confident that Personal Group has solid foundations
from which we can deliver an accelerated rate of growth.
Increasing recurring revenues, a compelling offering,
powerful partnerships, and a well-run and expert sales team
that delivers strong results, combine to create an exciting
opportunity for future growth.
Through completion of the market review, we have
validated the strength of our insurance offering and
benefits platform while gaining a fuller understanding of
the large market opportunity that exists for Personal Group.
Equipped with the insight gleaned from the market review
and the strengthened team, I am excited by the fantastic
opportunities that lie ahead for Personal Group.
Paula Constant
Group Chief Executive
18 March 2024
Market Segmentation Analysis -
key findings
The market segmentation analysis found that the
UK workforce overall grew moderately from 2010 to
2020 and is expected to grow by 4% over the next
12-24 months. Importantly, within this moderately
growing overall market, the research found there are
approximately 9.8m employees in the UK without
any, or only partial short-term sick pay support. This
compares to the number of employees accessing our
services of 1.6m people, demonstrating considerable
room for further market penetration.
The research demonstrated the ongoing relevance
of our insurance products, emphasised the industries
which present the largest opportunities to the
Group, and that these sectors remain largely under
penetrated by any offering, with our highest
penetration rate being 12%, demonstrating a
considerable opportunity for growth.
The market mapping also confirmed that Personal
Group has a clear competitive advantage through
being the only ‘face to face’ sales-led offering in its
area of the market and that there remains a large
addressable market opportunity. Informed by the
research, we have developed a targeted marketing
strategy aimed at specific customer types and the
most appropriate market segments for our insurance
offerings being, in the first instance, construction,
transport and production.
Personal Group Holdings Plc
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Financial Statements
11
Strategic Report
Overview
Group Chief Executive’s Statement
continued
Our Business Model
We provide a broad range of employee
engagement and wellbeing offerings
to all sectors of the UK workforce.
Our full service solutions, encompassing
employee benefits and employee insurance
products, enable organisations to stand
out as an employer of choice, helping their
employees thrive in work and in life.
Adjusted EBITDA contribution
Affordable insurance
Benefits platform
Pay and Reward
Other owned benefits
We are
improving the lives of the UK workforce.
Pay &
Reward
Affordable
Insurance
Benefits
Platform
Other Owned
Benefits
Employee-paid insurance
plans – access to our insurance
products is made available
through an individual’s wider
employee benefits offering.
Premiums are paid by the
employee via a weekly or
monthly payroll deduction.
Hapi subscriptions –
employers pay monthly or
annual subscriptions per
employee for use of the Hapi
platform and app.
Can be white-labelled through
a corporate partner, eg. Sage
Employee Benefits.
Commission on third party
transactions – we earn
a margin on some of the
discounted vouchers available
to employees through Hapi and
commission on any third-party
financing arranged or employer
purchases of partner solutions.
Innecto Digital subscriptions
– employers pay an annual
subscription for digital analysis
and predictive SaaS tools for
use in making pay decisions.
Innecto & QCG consultancy
income – employers pay for a
full reward service – from pay
benchmarking and surveys
to the development of job
evaluation and bonus schemes.
Employer-paid home
technology salary sacrifice
sales – employers pay up
front for their employees’
technology and other
purchases with employees
making subsequent monthly
salary sacrifice payments back
to their employers.
How we make money
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Overview
Our growth strategy is based on three key areas focused on widening our footprint across a broader range of industry sectors.
Our Strategy in Action
Solid performance
against our priorities.
Driving Insurance
Transforming Reward & Benefits
Accelerating our SME offer
1
2
3
Our unique sales approach helps employers communicate their
messages about employee wellbeing and the key benefits they
offer through a face‑to‑face meeting with their employees, both
introducing them to their benefits package and offering them the
chance to buy insurance there and then.
2023 Progress
Delivery and productivity of face-to-face field sales team improved
through ‘New Ways of Working’, resulting in:
- Highest ever levels of new insurance sales.
- Enhanced leadership capability.
-
Improved wellbeing for the field sales team with time working
away from home reduced from 66% to 53%.
Operational enhancements to support FCA Consumer Duty, including:
-
Implementation of VOYC, an AI compliance tool which has
enabled full coverage of sales presentations by the field sales
team, ensuring better outcomes for customers.
-
Introduction of additional point of sale information to enhance
customer understanding of the product they have bought.
Size of insurance book increased to £31.6m of Annualised Premium
Income (2022: £28.0m).
2024 Aspirations
-
Focused targeting of specific sectors identified from the
strategic review as being the largest opportunities for growth.
- Review of product set.
-
Progress opportunities to partner with other benefit providers to
promote their benefit platforms alongside the sale of insurance.
-
Continue to progress opportunities to partner with 3rd-party
providers to offer alternative products suitable for the widening
client base.
Our employee benefits app‑first solution, Hapi, is a market‑leading
employee engagement platform, which for larger clients is fully
customised and white‑labelled with their own bespoke mix of
benefits and branding. Alongside this our Pay & Reward division is
able to help clients with pay, recognition or bonus issues alongside
their benefit offering.
2023 Progress
Internal launch of Hapi 2.0 with first external client going live
in January 2024.
31 new clients and won a place on the Crown Commercial Framework.
Continued growth in annual recurring revenue to £3.1m (2022:
£2.5m) across the Hapi platform and Innecto Digital products.
Uplift in commissions for 3rd-party products that sit on the benefits
platform, such as cycle to work, of 25%.
Combined the Innecto and QCG consultancies to create
operational efficiencies.
2024 Aspirations
Full launch of Hapi 2.0 which will result in:
- Enhanced reward & recognition functionality.
-
A tiered proposition with greater opportunity for self-serve
by clients.
- Improved MI for clients.
Migration of all existing Hapi 1.0 clients onto Hapi 2.0.
Develop new Pay & Reward ‘career pathways’ product to launch
with major client which will create an additional software solution
to offer to existing customers.
Our SME version of Hapi enables us to target small businesses
with a standardised product pre‑populated with key benefits.
We currently deliver to this traditionally hard to access market
through our partnership with Sage with our proposition of ‘Sage
Employee Benefits (SEB)’ offered through an initial free trial.
2023 Progress
SEB 2.0 launched in early 2024 for new Sage customers alongside
the refreshed Hapi 2.0 providing improved reward & recognition
functionality alongside a new look and feel.
Continued growth in annual recurring revenue for SEB to £3.7m
(2022: £3.0m).
Improved onboarding journey for both account managed and
digitally onboarded clients.
2024 Aspirations
Migration of all existing SEB 1.0 clients onto SEB 2.0.
Continue development of premium version of SEB with a wider
range of benefits to attract larger clients.
Progress conversations with prospective partners in different
markets to increase number of routes to the SME market.
Continue to improve the end to end customer journey to improve
lifetime value of clients going onto the platform.
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Posed by model
How was your experience
with Personal Group over
the years?
“ We’ve worked with Personal
Group and Let’s Connect
for over 9 years, and it’s
been a seamless process.
Recommendation – 100%”
Frank Kenwright
Head of Payroll, Merseyrail
Our Strategy in Action
continued
Company:
Merseyrail
Sector:
Transport
Employees:
1,227
Challenge:
Employee Communication, Employee
Engagement, Employee Recruitment and Retention
Challenge
Merseyrail is a self-contained rail network carrying over 90,000
passengers daily with Liverpool Central station being one of the
busiest outside of London. The company is focused on maintaining
a competitive advantage in recruitment and retention and sees a
benefits package integral to meeting its goals for its 1,227 employees.
Solution
Partnering with Personal Group back in 2015, Hapi, which is accessible
via desktop or app, helps create a happier, healthier and more
productive workforce. Employees can access discounts from leading
retailers, gym memberships, a Cycle to Work (C2W) scheme, electric
vehicles via Octopus as well as a technology salary sacrifice scheme
by Let’s Connect.
The app and all its benefits are demonstrated to employees at
roadshows and face-to-face visits to further increase engagement.
At these site visits, Employee Engagement Executives demonstrate
the available insurance policies including Death in Service, Hospital
and Convalescence plans. Since the pandemic, employees are aware
that insurance purchased for a rainy day could be needed any day and
at the end of last year, 216 policies were held by Merseyrail employees
and their dependents.
Outcomes
Merseyrail employees’ use of retailer discount vouchers yielded a
total saving of £6.6k over 12 months and continues to grow. The home
and technology scheme has had an outstanding 36% adoption rate
by 442 employees – more than 7 times the industry average.
Conclusion
The company’s commitment to providing a comprehensive benefits
package has contributed to its success in the industry, including a
competitive advantage with recruitment and retention.
Driving Insurance
1
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Governance
Overview
Employees can now access wellbeing resources
through an online health portal including an
Online GP and 24/7 helpline. Further support is
provided by the Employee Assistance Programme
(EAP) as well as retail discounts and a Cycle to
Work scheme, where employees can save money.
EEEs from Personal Group spent 9 days with
Natures Menu employees in 2023, taking
employees through their benefits and offering
hospital, convalescence and death benefit plans.
This has been popular with the employees and
out of the 30% employees that the EEEs spoke
to, 56% took out policies last year.
Outcomes
This has had a positive impact on the business.
Employees rave about the retailer discounts and
Cycle to Work scheme is great for cost savings
and employee health. Engagement levels sit at
around 60%, which is more than three times the
industry average.
Company:
Natures Menu
Sector:
Food Manufacturing
Employees:
+250
Challenge:
Employee Recruitment,
Retention and Engagement;
Employee Wellbeing
Challenge
Founded in 1981, Natures Menu, a rapidly growing
raw pet food producer, has undergone rapid growth
in the last decade and now employs more than
250 people.
In early 2022, Natures Menu sought to improve
employee engagement and bolster their employee
value proposition through a user-friendly platform.
They wanted to offer employee benefits, an
Employee Assistance Program (EAP), and a discount
marketplace. The initiative supported employee
wellbeing and retaining talent during a time of
rapid expansion.
Solution
Personal Group’s Hapi app helped address many
of the challenges the company faced. By putting
their employees’ entire benefits offering in one
place, employees could access them anytime,
anywhere via an app on their smartphones.
Transforming Reward & Benefits
2
“ We operate within a strict
reward budget, yet Personal
Group enables us to maximise
every penny. An enticing
benefits package and ensuring
its accessibility distinguishes
us from competitors.”
Nicola Sharpe
HR Manager UK, Natures Menu
How is Personal Group
transforming rewards
and benefits?
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Our Strategy in Action
continued
Our Strategy in Action
continued
Transforming Reward & Benefits
2
Company:
SAGA PLC
Sector:
Financial Services, Travel & Leisure
Employees:
4,000
Challenge:
A disjointed reward package
Challenge
Saga PLC, a leading UK provider for individuals over 50, faced
inefficiencies in their benefits proposition despite offering
a comprehensive total reward package to their 4,000 employees.
The benefits were disjointed and lacked clarity, raising concerns
about their value for money and competitiveness.
Solution
Innecto Reward Consultancy, part of the Personal Group family,
conducted a thorough analysis of Saga’s benefits offering. Leveraging
desktop research and sector expertise, they identified overlaps
and areas for improvement. By examining creative initiatives from
other companies, Innecto proposed strategic recommendations
to strengthen Saga’s benefits proposition and align it with the
company’s values and objectives.
Outcomes
Innecto’s review revealed opportunities for Saga to optimise their
benefits package. They recommended streamlining services to
eliminate duplication, such as consolidating multiple mental health
support providers. Additionally, Innecto suggested introducing unique
benefits such as ‘Grandparent Leave’ and leveraging Saga’s insurance
products to enhance the proposition’s appeal.
Conclusion
Mark Powell, Interim Chief People Officer at Saga, praised Innecto
for their insightful recommendations and collaborative approach.
By aligning benefits with Saga’s brand identity and strategic goals,
the proposed changes aim to improve employee satisfaction and
overall company performance.
“ Justine and the team
understood our challenges
and worked closely with us
to concisely articulate the
opportunities we could embrace
that could clearly benefit both
the company’s bottom line and
the employees that work here.”
Mark Powell
Interim Chief People Officer at Saga
How is Personal Group helping with
enhancing employee satisfaction?
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Accelerating our SME offer
3
Company:
Sage Group plc
Sector:
Software Development
Serving:
4,841 Sage Employee Benefits Clients
Sage plc is a market leader in accounting, financial,
HR and payroll technology for small and mid-sized
enterprises (SMEs), with an annual revenue of over
£2.1 billion, Sage software is used by millions of
SMEs in the UK.
Across the UK, Sage’s finance, HR and payroll
software is trusted to make work and money
flow. Back in 2017, a strategic partnership
between Personal Group and Sage resulted in the
birth of Sage Employee Benefits, an employee
engagement product designed for SMBs and
integrated into Sage’s product portfolio.
Sage has been a valued Personal Group partner for
more than seven years. A vast number of people in
the UK are paid using a Sage Payroll solution, and
almost 42% of businesses in the private sector use
a Sage Payroll solution to pay their employees.
Many of Sage’s customers typically do not access
this type of employee benefits technology, which
is usually available to larger enterprises. However,
Sage Employee Benefits means that even the
people employed by the smallest businesses
can access an entire benefit offering, which they
can access anytime, anywhere via an app or on
their smartphones.
Sage Employee Benefits delivers benefits that
small businesses and their employees want and
need. They can access unrivalled access to savings
and discounts across hundreds of retailers, salary
sacrifice options, and wellbeing support. Based on
Personal Group’s own proprietary platform named
Hapi, Sage Employee Benefits is optimised for App
delivery, which means that employees can access
and manage their benefit services directly from
their smartphone.
Personal Group’s Sage Employee Benefits teams
provide everything from the onboarding of SMBs
to bespoke marketing for Sage’s clients with a
total of 33,838 activated users on the platform
across 4,841 clients (as of March 2024).
Beth Johnson, Product Marketing Manager
commented:
“Working with Personal Group has been phenomenal
as it’s a true partnership where we collaborate every
day with the same shared objective: to make life
easier and better for small business owners. Since
we started back in 2017, we’ve served thousands
of businesses and their employees who can enjoy
the benefits that are usually only available to large
enterprise businesses.”
The partnership and the app have been a great
success and in particular the usage of retailer
discounts – which has been increasingly valuable
to employees during the cost-of-living crisis.
In total, Sage clients have saved more than £1.1
million by using the benefit. Going forward, Sage
and Personal Group plans to further improve the
customer journey of the app to drive even more
value in its Reward and Recognition programme.
“ The pandemic and the cost-
of-living crisis has had such a
profound impact on SMEs. Being
able to offer peace of mind and
real financial support means
these businesses have truly
benefited from the extra value
that Personal Group and Sage
Employee Benefits brings.”
Beth Johnson,
Product Marketing Manager
How is Personal Group
accelerating your SME offer?
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Our Strategy in Action
continued
Key Performance Indicators
Lead indicators
As part of our strategy for delivering long-term sustainable growth, we identified a number of lead indicators, the improvement of which will enable us to grow both our revenue and
profits and build future value for the business.
Lead Indicator
Why we chose it
31 December
2023
31 December
2022
Unique client number
Winning new clients and retaining existing ones will be key to us being able to grow our business.
555
502
Number of clients served by two
or more lines of business
Encouraging cross-selling across the Group will enable us to achieve increased penetration across our
existing clients as well as making us an important part of clients’ employee wellbeing proposition.
143
128
Total number of employees to
whom one or more of our services
are made available
Increasing the number of employees we provide services to will be fundamental to us achieving our
growth aspirations as well as helping us achieve our vision of being a winning team creating a brighter
future for the UK workforce.
1,567,393
1,432,670
Activated users on Hapi and Sage
Employee Benefits
Increasing the number of activated users on Hapi and Sage Employee Benefits will help us drive greater
return on the Group’s SaaS digitally enabled products.
635,733
582,733
Number of insurance payers
Re-invigorating growth in insurance payers, together with a consistent focus on retention, will help us
increase the size of our insurance business. We have chosen to use payers instead of our historic measure
of policies to reflect that the majority of our premiums are collected through payroll deduction and our
retention rates are largely determined by the actions of the individual payer.
97,327
94,877
Unique client number
555
(2022: 502)
Number of insurance payers
97,327
(2022: 94,877)
Activated users on Hapi
and Sage Employee Benefits
635,733
(2022: 582,733)
The Group meticulously reviews its performance, measured across a number of KPIs.
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2023
£31.6m
2022
2021
2020
2023
2022
2021
2020
2023
2023
2022
2021
2020
2022
2021
2020
2023
2022
2021
2020
2023
2022
2021
2020
1.
Annualised premium income refers to the annualised premium value of policies in force at the end of the financial year net of IPT.
2.
Annualised new business premiums are a key performance indicator as, whilst no direct reconciliation to earned premiums for the year can be carried out, they are a primary driver of earned premiums in future years and, as such,
are a key measure for the Group. For a weekly premium, the measure is calculated as the value of the premium (net of IPT) x 52; for a monthly premium, the value of the net premium (net of IPT) x 12.
3.
The claims ratio is calculated as claims incurred plus net change in claims provision, less reinsurers share of claims paid as a proportion of insurance income less outward reinsurance premiums.
4. The year on year retention rate is the annual retention rate of policyholders who have held the policy for more than 1 year.
5.
The SaaS license total includes Hapi, SEB and Innecto Digital recurring revenue.
Other KPIs
In addition to our lead indicators we continue to measure against a variety of additional KPIs both across the Group and within the various business segments.
Annualised premium income
1
£31.6m
(2022: £28.0m)
Year on year
insurance retention
4
82.5%
(2022: 81.0%)
Annualised new business premium
2
£11.8m
(2022: £9.5m)
Annualised recurring revenue
for SAAS licences
5
£6.7m
(2022: £5.6m)
Claims ratio
3
27.0%
(2022: 27.7%)
LC orders
17,668
(2022: 34,297)
£28.0m
£24.4m
£27.1m
81.0%
80.7%
80.5%
82.5%
£6.7m
£11.8m
27.0%
27.7%
24.5%
24.4%
£9.5m
17,668
£5.6m
£3.7m
£2.4m
34,297
33,155
27,320
£3.6m
£1.8m
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Key Performance Indicators
continued
Chief Financial Officer’s Statement
“The Group continues
to benefit from an
increasing proportion
of recurring revenues,
providing high levels
of visibility for 2024.”
Sarah Mace
Chief Financial Officer
20
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Personal Group Holdings Plc
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Annual Report and Accounts 2023
Group revenue
Group revenue remained stable at £49.7m (2022: £49.8m).
With the exception of the Other Owned Benefits division (Let’s
Connect), growth was seen across all areas of the business.
Our insurance segment continues to grow as anticipated and
as at 31 December 2023 we had an insurance book of £31.6m
Annualised Premium Income (API) (2022 £28.0m), the majority
of which is renewable on weekly or monthly rolling contracts.
External income from our internally developed Benefits Platform
increased by 28% year on year, following on from the 45% growth
seen in the previous year. This growth is a result of our continued
expansion into the SME sector through our partnership with Sage
and growth in our own Hapi platform sales.
Growth in our Pay and Reward segment was moderate
as economic challenges continued to impact the market
demand. ARR across all the Group’s digital platforms now
stands at £6.1m (2022: £5.6m).
Sales of technology and other products to employers as part
of their employee benefit provision through the Group’s
subsidiary, Let’s Connect, fell 34% year on year, in line with
expectation, reflecting the loss of its largest customer in Q1.
Other income increased to £1.0m (2022: £0.4m) as a result of
increased rates on the cash deposits held by the insurance
subsidiaries.
The Group continues to benefit from an increasing proportion
of recurring revenues, providing high levels of visibility for 2024
.
Adjusted EBITDA*
Adjusted EBITDA* for the year increased to £8.1m (2022:
£6.0m) reflecting the growth in contribution from the higher
margin insurance segment, in particular where underwriting
profit continued to grow in line with the size of the
insurance book.
The increased EBITDA in the period has been driven by
continued contribution growth (up 33% to £3.8m) from the
Benefits Platform, both through new Hapi platform sales
and the growth in size of the white labelled Sage Employee
Benefits. We saw a stable contribution from our Pay & Reward
businesses, however, the contribution from Other Owned
Benefits fell in line with the loss in top line revenue (down 56%
to 0.4m). Outside of the core segments, Group administration
and central costs increased year on year reflecting the
investment in the Group’s sales and marketing function
alongside inflationary staff and operating expenses.
We believe adjusted EBITDA* remains the most appropriate
measure of performance for our business, reflecting the
underlying profitability of the business and removing the
impact of one-off items arising from past acquisitions on the
Group’s reported profit before tax. The definition remains
unchanged from previous years.
Group results
2023
£’000
2022
restated
£’000
Revenue
49,666
49,804
Adjusted EBITDA*
8,126
6,010
Operating profit
5,414
3,835
Profit / (Loss) before tax
5,334
(6,760)
Tax
(1,010)
(493)
Profit / (Loss) for the year
4,324
(7,253)
2023
£’000
2022
£’000
Profit / (Loss) before tax
5,334
(6,760)
Finance costs
79
20
Depreciation
1,135
1,052
Amortisation of acquired
intangibles
273
238
Amortisation (other)
497
548
Goodwill impairment**
10,575
Share-based payment expense
169
291
Corporate acquisition costs***
46
Restructuring Costs
639
Adjusted EBITDA*
8,126
6,010
*
Adjusted EBITDA is defined as earnings before interest,
tax,depreciation, amortisation of intangible assets, goodwill
impairment, share-based payment expenses, corporate acquisition
costs and restructuring costs.
**
Result of impairment review of Let’s Connect in 2022, please see note
13 for further details.
***
Corporate acquisition costs incurred during the acquisition of QCG.
Group revenue
£49.7m
(2022 restated: £49.8m)
Adjusted EBITDA*
£8.1m
(2022: £6.0m)
Earnings per share
13.8p
(2022: (23.2p))
Accounting changes
IFRS 17
During the year the Group adopted IFRS 17 which
has had a significant impact on the accounting for
insurance contracts but mainly from a presentation
perspective as can be seen in Note 2 and Note 23.
Restated Revenue
Furthermore, the Group reviewed the application of its
accounting policy and now treats all vouchers as agency,
showing only the voucher margin and not income as
previously stated, this is discussed further in Note 30.
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Chief Financial Officer’s Statement
continued
Alternative performance measure
Adjusted EBITDA, which is referenced throughout
this document, is an alternative (non-Generally
Accepted Accounting Practice (non-GAAP))
financial measure used by the Group when
reviewing performance, evidenced by executive
management bonus performance targets. As
such, this measure is important and should be
considered alongside the IFRS measures.
Adjusted EBITDA takes into account adjustments,
in addition to the standard IFRS measure, which
are considered to be non-underlying to trading
activities and which are significant in size. For
example, goodwill impairment is a non-cash item
relevant to historic acquisitions; share-based
payment expenses are a non-cash item which have
historically been significant in size but can fluctuate
based on judgemental assumptions made about
share price and have no impact on total equity;
corporate acquisition costs and reorganisation costs
are both one-off items which are not incurred in the
regular course of business. The definition above has
not changed during the year.
Profit before and after tax
Statutory profit before tax for the year was £5.3m (2022:
loss of £6.8m), which includes £0.6m of costs associated
with restructuring the organisation following the change
of Chief Executive. The 2022 loss before tax reflected a
£10.6m impairment charge relating to the goodwill balance
associated with Let’s Connect, excluding the non-cash
impairment charge the profit before tax for 2022 was
£3.8m. The tax charge for the year was £1.0m (2022: £0.5m),
and profit after tax for the year £4.3m (2022: loss of £7.3m).
EPS
Resulting earnings per share were 13.8p (2022: (23.2p)),
excluding the non-cash impairment charge this would have
been 10.6p in 2022. The calculation is detailed in Note 11.
Dividend
The Board has recommended a final ordinary dividend of
5.85 pence per share, making a total ordinary dividend for
2023 of 11.7 pence per share. The Board has considered the
level of dividend in the context of the underlying growth
seen during the year and the continued confidence in the
Group’s business model and prospects.
Chief Financial Officer’s Statement
continued
“Our strong balance
sheet means we remain
well positioned for
future growth.”
Sarah Mace
Chief Financial Officer
Balance sheet
As at 31 December 2023 the Group’s balance sheet remained
strong, with cash and deposits of £20.1m (2022: £18.7m)
and no debt. The Group’s main underwriting subsidiary,
Personal Assurance Plc (PA), continues to maintain a
conservative solvency ratio of 272% (unaudited), with a
£6.8m surplus over its Solvency Capital Requirement of
£4.0m. The Company has consistently maintained a prudent
position in relation to its Solvency II requirement. Personal
Assurance (Guernsey) Limited, the Group’s subsidiary which
underwrites the death benefit policy, also maintained a
healthy solvency ratio of 484% (unaudited), under its
own regime.
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Financial Statements
Overview
The Group saw increased contribution from affordable insurance after a record year.
Segment
Description
Income Streams
Affordable
Insurance
A directly owned benefit, provision of simple
insurance products underwritten by Group
subsidiaries.
Insurance income.
Benefits
Platform
Provision of a benefits platform to employers both
directly and through channel partners, currently
Sage for our SME solution.
Digital platform subscriptions, commissions from
third party benefits which sit on the platform.
Pay & Reward
Provision of a full reward service to employers
through the Group’s pay and reward subsidiaries,
Innecto and QCG.
Consultancy, industry surveys and digital
platform subscriptions.
Other Owned
Benefits
Other directly owned benefits: sale of technology
and other products to employers as part of their
employee benefit provision through the Group’s
subsidiary, Let’s Connect.
Retail sales directly to employers, commission
received from the introduction of third party finance.
Segmental results
The Group reports across four core segments as detailed in the table above.
For each of the segments, the adjusted EBITDA contribution comprises the gross profit of that segment together with any
costs associated directly with the operation of that segment. Sales and marketing costs and other central costs that are
not directly attributable to a segment, such as Finance, HR, depreciation, amortisation and Group Board expenses are not
allocated to a segment and are shown separately as ‘Group Admin and Central Costs’.
We believe this presentation provides transparency to enable the impact of top line growth on adjusted EBITDA contribution
for each area of the business to be better understood.
Revenue
Dec-23
£’000
Dec-22
Restated
£’000
Affordable Insurance
28,708
25,406
Benefits Platform
6,685
5,208
Pay & Reward
2,246
2,008
Other Owned Benefits
11,081
16,800
Other
946
382
Total Revenue
49,666
49,804
Adj EBITDA Contribution
Dec-23
£’000
Dec-22
Restated
£’000
Affordable Insurance
11,226
9,032
Benefits Platform
3,837
2,887
Pay & Reward
493
495
Other Owned Benefits
369
664
Group Admin & Central Costs
(8,732)
(7,107)
Other
933
39
Total Adj EBITDA
8,126
6,010
Further information
CE Statement
From Personal Group
Read more |
 Page 08
KPIs
Read more |
 Page 18
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Chief Financial Officer’s Statement
continued
Affordable insurance
Insurance revenue from the Group’s core insurance business
increased by £3.3m to £28.7m (2022: £25.4m).
The continued opportunity for our face-to-face sales
activity, driven by employers wishing to engage more
effectively with their workforce, has provided the
opportunity to continue to expand the sales team and grow
the insurance book back to levels seen pre-COVID. A record
of £11.8m of new insurance sales were written during the
year (2022: £9.5m) which, together with continued strong
retention rates for existing policyholders, meant that as
at 31 December 2023 we have £31.6m (2022: £28.0m) of
Annualised Premium Income, the majority of which are
renewable on weekly or monthly rolling contracts.
Claims ratios remained stable at 27.0% (2022: 27.7%), as the
NHS continues to address long waiting lists.
Adjusted EBITDA contribution of £11.2m for the year
(2022: £9.0m), reflects the increased underlying profit
arising from increased revenue alongside the stabilisation
of acquisition costs.
Benefits platform
Revenue from digital platform subscriptions and commissions
from third party benefit suppliers which sit on the benefits
platform rose 28% to £6.7m in 2023 (2022: £5.2m).
Subscriptions for our enterprise platform, Hapi, continued
to grow throughout 2023 with ARR on the platform
increasing to £2.5m (2022: £2.0m) during the course of the
year with 31 new clients onboarded.
Our expansion into the SME market also continued to grow,
with Sage Employee Benefits, the Group’s SME proposition
being taken to market through its partner Sage. ARR
increased to £3.7m at the end of the year (2022: £3.0m).
Chief Financial Officer’s Statement
continued
As at 31 December 2023 the ARR from Benefits Platform
subscriptions across all channels stood at £6.1m (2022: £5.0m).
Adjusted EBITDA contribution of £3.8m (2022: £2.9m)
increased in line with increased revenue but also
demonstrates the increased margins available as this area
of the business scales up.
Pay & reward
Whilst economic challenges impacted market demand,
revenue from consultancy income and digital subscription
income from proprietary HR solutions increased to £2.2m
(2022: £2.0m). This reflected a full year’s contribution from
Innecto and QCG. ARR from digital products remained stable
and stood at £0.6m on 31 December (2022: £0.5m).
Towards the end of the year, the operational capabilities of
the two entities were merged which is anticipated to lead
to efficiencies and improved productivity in 2024.
Other owned benefits: Let’s Connect
Let’s Connect, which provides technology and other
products to employers as part of their employee benefit
provision, saw revenues decrease to £11.1m (2022: £16.8m)
following the loss of a key client in March 2023. Increased
average order values, alongside margin improvements and
operational downsizing helped mitigate the impact on its
EBITDA contribution of £0.4m (2022: £0.7m).
Group administration expenses and
central costs
Group administration and central costs of £8.7m (2022:
£7.1m) reflects an investment in the year building the sales
and marketing function to accommodate for future growth
alongside inflationary cost increases associated with
utilities, Group insurances and other services. Expenses
for the year also reflect additional costs in relation to the
change of Chief Executive during the year.
Sarah Mace
Chief Financial Officer
18 March 2024
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Risk Management
Oversight
The Board is responsible for overseeing and maintaining the
adequacy and effectiveness of the risk management and
internal control systems as well as identifying the nature
and extent of the principle risks the Group is willing to take
in achieving its strategic objectives, including the setting of
the overall risk appetite and tolerance levels.
The Board delegates oversight of risk management to the
Risk and Compliance Committee, who in turn regularly
report to and make recommendations to the Board.
The Risk strategy, appetite and framework are set out in
a suite of policies covering the material risks which exist
in the business; each policy is subject to annual review
and approval. We employ an Enterprise Risk Management
framework (ERM) to manage all types of risk which,
alongside our Own Risk and Solvency Assessment activity,
enables reasonable assurance to be provided to the Board
and external stakeholders that the Group is achieving
its risk management and internal controls objectives.
The effectiveness of the risk management system is also
independently assessed periodically by the outsourced
Internal Audit Function in their role as third line of defence,
with the results reported to the Audit Committee.
The Board is satisfied that the processes set out above
enable the Group to effectively identify, assess and manage
current and emerging risks and allow the required focus
on risk awareness, ethical behaviour and the fair treatment
of customers and colleagues.
Business Area Owner
Identify, assess and manage risks on a daily basis.
Develop and implement policies and procedures.
Ownership of business practices.
Ensure activities are consistent with objectives.
Implement controls.
Control self-assessment.
Internal Audit (outsourced)
Independent assurance of the effectiveness of the
first and second lines of defence.
Independent reporting to the Board and to the
Audit Committee.
Advisory role.
Risk Function
Risk identification.
Developing and oversight of the enterprise risk
management framework.
Risk reporting to Risk Forum and to the Risk and
Compliance Committee.
Providing advice and guidance to business areas and to the
Senior Leadership Team and Board.
Assurance of the effectiveness of policies and procedures.
Risk management approach
The risk environment is managed in a two-pronged
approach: top-down risks that threaten the strategic
plan, and bottom-up financial, operational, regulatory
and non-insurance risks which threaten the achievement
of business area objectives.
The risks and the risk appetites are captured on a risk register
where the inherent risk is identified, and the residual risk
rated, after assessing the effectiveness of the operational
controls and mitigating actions.
Responsibility to maintain the register as well as to
implement and monitor mitigating actions sits with each
member of the Senior Leadership Team. Each month a Risk
Forum is held where the Senior Leadership Team discuss
the key risks, both current and emerging, with mitigating
activities and timelines for implementation agreed.
We operate a ‘three lines of defence’ approach to define
risk management within roles and responsibilities. The
Group’s risk governance is overseen by a Risk function led
by the Head of Risk, with independence assured through
direct and separate access to the Chair of the Risk and
Compliance Committee.
Effective risk management is central to our culture
and key to achieving our strategic objectives.
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Risk Management
continued
Risk Type
Key risks
(with an impact of £500k+
within the next year)
Current and emerging factors
Mitigating activities
Change in risk
exposure
Strategic
Risk
Products
are not designed
to meet customer/client
requirements.
Risk that we fail to design innovative or desirable
products and services and fail to capitalise
on opportunities, impacting our long-term
sustainability and viability.
Investment in the design and build of Hapi 2.0 which will have an improved look and feel,
better MI, improved functionality and greater ability to integrate third-party benefits.
Enhanced engagement with clients to better understand their people agenda and
engagement and wellbeing priorities.
Commission of market study to better understand the demands and needs of the group’s
corporate target market, product research and competitor analysis.
Partnerships with third-party benefits providers to expand product offering.
Increasing
due
to client demand,
new entrants
in the market
and increasing
competition.
Changing demands and needs of consumers in
the personal general insurance market – products
do not align with customer expectations or
are outdated.
Annual product governance review of the group’s personal insurance products which
considers market and product research, customer feedback, design, value, price, build,
testing, and launch and sales channels. Better analysis of MI to help drive product
enhancements and improve supporting customer service.
Relaunch in Q2 2024 of core Convalescence product in response to customer feedback,
value assessment and market research.
Technology
is not an enabler
for the development of
innovative products to meet
clients’ demands and needs.
In-house technological capabilities and/or
external technology solutions do not allow for
agile and robust product development and optimal
product delivery.
Investment in in-house and outsourced technology systems and people, to build, test and
deliver Hapi 2.0.
Increasing
due
to reliance on
technology to
support change
and innovation
and need to make
quick and efficient
business decisions.
Technology
is not an enabler
for informed strategic
business decision making.
Technology infrastructure does not support the
data structures needed for “at your fingertips”
management information to make informed and
consistent decisions at pace.
Investment of resource and in existing third-party solutions to organise and improve data
quality and reporting.
Enhanced team structure drives split between business requirements and technical
requirements as well as design.
Client &
Customer
Retention
Risk
Potential to lose a
client or
Partner
that would impact
the Group’s ability to meet
its strategic objectives.
Loss of existing corporate clients as a result of
ineffective relationship management and failure
to demonstrate and promote the value of the
group’s business proposition.
Relationship management of clients and partners.
Early renewal/extension of key client contracts.
Payroll slots for collection of insurance premiums built into contracts as ‘enduring’
wherever possible.
Stable
based on
strength of current
relationships
and MI to help
demonstrate the
value proposition.
Client
concentration risk
.
A subset of the above risk, however the overall
impact on the Group could be significant with the
loss of one or more large clients, i.e., clients that
provide in excess of 20% of revenue.
Decrease in
individual
policyholder
retention rate.
Increased level of policy cancellations by individual
policyholders due to failure to demonstrate and
promote the value of personal insurance products
and lack of a communications strategy to drive
customer loyalty.
B2C communications strategy to promote the value of holding personal insurance
products as well as the value-added benefits of being a policyholder, i.e., access to
Online GP service.
Continued focus on improving supporting customer service.
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Risk Type
Key risks
(with an impact of £500k+
within the next year)
Current and emerging factors
Mitigating activities
Change in risk
exposure
External
Environment
/Economic
and
Regulatory
Risk
Environmental or economic
change impacts profit.
Inflationary pressures, rising interest rates, tax
rises and increased business overheads impacts
the spending power of clients, leading to them
spending less on the products and services
the Group provides. Higher cost of living for
individuals leading customers having less
discretionary spending for the Group’s personal
insurance products.
Clear go to market message around how the Group’s offering can support employees
navigate through the ‘cost of living crisis’ through the use of discounts and the Group’s
‘value propositions’, alongside wellbeing and employee assistance programmes
offered via Hapi.
Engage with clients and prospective clients to help employers maximise the benefit
of their employee benefits programme to help attract and retain staff, thus promoting
the value of the Group’s proposition.
Offer support to financially vulnerable customers where appropriate.
Increasing
overall
due to continued
budget constraints
at clients,
continued cost-
of-living squeeze
on individual
customers and
embedding of
Consumer Duty
arrangements.
Increased business operating costs and cost of
acquisition impacts the profitability of the Group’s
products and services.
P&L reporting, pricing reviews across the Group’s segments and stress and
scenario testing.
Claims uncertainty and volatility – There is a risk
that we are unable to predict our future claims
liability as we see performance deviating from
assumptions and historical norms.
Claims volume monitoring and stress and scenario testing. Where appropriate,
and whilst continuing to offer fair value to consumers, we will reprice our products
to reflect increased operating expenses.
Non-compliance with
regulatory
requirements
leads to regulatory censure
(and ensuing reputational
damage).
The FCA Consumer Duty intends to create a “race
to the top” in terms of the quality and value of
financial products and services, the way firms
interact with customers and the customer service
and support firms provide. The onus is on firms
to demonstrate that their products provide value
relative to the price consumers pay and have
tangible ways of monitoring the effectiveness and
quality of communications and customer service.
The FCA’s approach to the monitoring and
supervision of firms could mean that random
sample checking of firms’ Consumer Duty reports
and value assessments take place, alongside sector
specific supervisory work, targeted multi-firm
work, and thematic reviews, as opposed to the
“risk based” approach previously used. This means
that all firms, regardless of their size, scale and
importance to the financial market need to be
ready to evidence how their business model aligns
with the requirements.
The Group has processes in place to help ensure we remain compliant with regulatory
and legal requirements. We have a robust regulatory horizon scanning process, to ensure
we are able to respond appropriately to current and emerging regulatory changes.
Our key areas of focus continue to be:
>
identifying and supporting vulnerable customers through staff training, monitoring,
use of management information and outcomes reporting;
>
Improving our product governance processes, value assessments and Board reporting; and
>
Improving customer communications, feedback and service.
Sales interactions with customers are 100% monitored through investment in an AI tech
solution, as well as manual quality assurance checks. This ensures that we can respond
quickly to any issues which may arise and remedy them.
Longer term solutions will enhance our ability to test the effectiveness of communications
through improved visibility of click rates, open rates and customers’ responses to key
“calls to action”.
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Risk Management
continued
Environmental, Social and Governance
The business is
moving forward
with a strong 
ESG agenda.
A purpose-led Group
As a Group driven by a passion and commitment to
improving people’s health and wellbeing, ESG is at the core
of our business. Our purpose is to protect the unprotected
and connect the unconnected. We exist in order to create
a positive impact on society:
>
Ensuring there is an affordable, straight-forward way
for all UK workers to gain access to health insurance.
>
Helping organisations provide fair and appropriate
remuneration and benefits to their workforces.
>
Supporting the holistic wellbeing of people in the UK –
both at work and at home.
The progress that we make against our ESG goals is
therefore very important to us and a priority at Board level.
We pride ourselves on doing the right thing, a value that
is shared throughout our entire organisation. Just as this
drives our day-to-day work, it is also reflected in how we
operate as a business at all levels.
The Group’s ESG strategy is overseen by the Board and
develops appropriate policies and practices to ensure that
we continue to work towards our targets.
This responsibility is reflected in the fact that progression
against these targets is linked to Senior Executive and
Board compensation.
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Governance
Overview
Carbon emissions
While we are a naturally low-emission business, monitoring
and reducing our carbon emissions is core to our
environmental approach. Aside from meeting our reporting
obligations, we recognise that as a global citizen it is our
responsibility to minimise our carbon footprint.
We have reported our carbon emissions in our Annual Reports
since 2021. We have installed solar panels at our headquarters
and are examining further energy efficiency initiatives.
Lower emission CO
2
vehicles were added to our fleets during
the year, and we have already seen the benefits. Most of
the vehicles arrived in the second half of the year, so we
expect to see the full impact on our CO
2
emissions in 2024.
Also, to support this initiative, we installed electric chargers
at our head office.
The use of solar panels at our headquarters continues to
prove successful in significantly lowering our MegaWatt
hours. In 2023, 12.45 MWh of energy was generated
which would power 4.6 homes for a year and equates
to planting 157 trees.
Group Environmental Policy
Our Group Environmental Policy acknowledges our impact
on the environment and our commitments to preserving
the environment in which we operate, including our
expectations regarding reporting, supplier credentials,
waste management, and the efficient use of resources.
Task-Force on Climate-Related Financial
Disclosures (TCFD)
Personal Group falls outside the scope of mandatory
disclosures under the Taskforce on Climate-Related
Financial Disclosures (TCFD), though we continue
to monitor the guidance published by the Financial
Stability Board’s TCFD on corporate disclosures to enable
stakeholders to better understand financial exposures
to climate-related risks.
Environmental
While we are a naturally
low emission business,
we
proactively seek
to mitigate the
environmental impact
of our operations and
supply chain.
2021 – 2023 progress
>
Head office energy usage lowered from 14.3 Mwh
/ £m of revenue to 8.2 Mwh / £m before revenue
restatement, as a result of efficiencies in energy
usage and inclusion of solar panels.
>
CO
2
usage of the fleet has fallen by 17%, driven by
replacement of fleet vehicles with lower CO
2
and
hybrid vehicles.
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Environmental, Social and Governance
continued
Environmental, Social and Governance
continued
2023 reporting
The methodology used to calculate our greenhouse gas
emissions is in accordance with the requirements of the
following standards.
>
World Resources Institute (WRI) Greenhouse Gas (GHG)
Protocol (revised version).
>
Defra’s Environmental Reporting Guidelines: Including
Streamlined Energy and Carbon Reporting requirements
(March 2019).
>
UK office emissions have been calculated using the Defra
2023 issues of the conversion factor repository.
Emissions and energy usage
Energy and carbon disclosures for reporting year. All units tCO
2
e unless otherwise stated.
Emissions source
2023
2022
Variance
Scope 1
Natural gas
97
90
8%
Company and leased cars
365
370
(1%)
Total Scope 1
462
460
0.4%
Scope 2
Electricity
53
52
2%
Scope 2
Company and leased cars
4
-
N/A
Total Scope 2
57
52
10%
Scope 3
Electricity T&D
5
5
0%
Scope 3
Employee cars
14
11
27%
Total Scope 3
19
16
19%
Total (Market Based)
538
528
2%
Total (Location Based)
538
528
2%
Total Energy Usage (kWh)1
2,380,002
2,277,147
5%
Normaliser 1
tCO
2
e per FTE
2.0
1.9
0.01%
1. tCO
2
e per FTE for 2021 has been recalculated from 2.6 to 1.6 to reflect the inclusion of sales staff in the total figure.
The same approach has been taken in 2022.
Personal Group recognises that our operations have an
environmental impact and we are committed to monitoring
and reducing our emissions year‑on‑year. We are aware of
our reporting obligations under The Companies (Directors’
Report) and Limited Liability Partnerships (Energy and
Carbon Report) Regulations 2018.
2023 performance
Our carbon footprint for the 2023 reporting year has been
calculated based on our environmental impact across scope
1, 2 and 3 (selected categories) emission sources for the
UK only. Our emissions are presented on both a location
and market basis. On a location basis our emissions are 538
tCO
2
e, which represents an average impact of 2.0 tCO
2
e per
full time employee), and on a market basis our emissions are
538 tCO
2
e. We have calculated emission intensity metrics
on an employee basis, which we will monitor to track
performance in our subsequent environmental disclosures.
There has been a 1% reduction in emissions from company
and leased cars, with the introduction of hybrid and electric
company cars in 2023. There has been little variance in
absolute emission between 2022 and 2023, and headcount
has remained the same, resulting in only a 0.01% variance
increase in emissions intensity (tCO
2
e per FTE).
Energy and carbon action
During the reporting period, we have taken the following
actions to reduce our environmental impact:
In 2023 we migrated our fleet of vehicles over to hybrid
with the majority of our car orders with drivers going for
a Plug in hybrid (PHEV) option and updated and installed
additional car charging stations at our head office.
Following an operational control approach to defining our
organisational boundary, our calculated GHG emissions
from business activities in the UK fall within the reporting
period 1st January 2023 to 31st December 2023, using the
reporting period of 1st January 2021 to 31st December 2021
and January 2022 to 31st December 2022 for comparison.
Personal Group’s SECR Statement
Environmental
continued
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Social
We believe our vision, to
create a brighter future
for the UK workforce,
brings a
responsibility
that goes beyond
our clients and their
employees.
Our goal is to ensure that our business has a positive
social impact on the communities in which we trade,
that Personal Group is an employer that strives to offer
opportunities to people of all backgrounds, and that drive
societal change.
People
Employee wellbeing remains a focus for us and we
have continued to invest significantly in training and
development, as well as providing best-in-class employee
benefits, whilst maintaining hybrid work policies in order
to create a flexible and collaborative working environment.
We regularly conduct engagement surveys to ensure
we’re focusing on what’s important and giving the most
meaningful support to our employees. Following feedback
from our 2023 Employee Engagement survey, we introduced
a number of employee benefit provisions, including:
>
Days off for a ‘Life Event’ and ‘Birthday’ available for
all colleagues.
>
The removal of our mandated three days leave over the
Christmas period and the ability to carry over three days
to the following calendar year.
>
All employees not already on a commission or bonus
schemes are now eligible for a bonus.
Wellbeing
The Group’s core purpose is to protect the unprotected by
supporting workforce wellbeing and engagement, and our
offerings touch more than a million UK employees.
We are also focused on investing in and improving the
wellbeing and overall satisfaction of our own workforce
both at and outside of work. Personal Group employee
engagement and wellbeing is delivered through our
industry leading platform, Hapi and our continued high
employee engagement scores reflect our committed and
passionate team.
Employees have access to a broad range of best-in-class
benefits, including private medical and travel insurance, access
to an online GP, options to buy and sell holiday allowances,
death in service, long service rewards, access to an Employee
Assistance Programme and discounted gym memberships.
The Group pays all staff above the living wage and delivers
a programme of culturally relevant wellbeing initiatives.
Alongside flexible working hours we have a hybrid working
policy in place. We will continue to develop our employee
proposition, ensuring that the Group’s benefits remain
competitive and that we remain an employer of choice.
Learning and development
Our Chief People Officer oversees learning and development
amongst staff, with the Group monitoring the training hours
per employee to ensure that all employees have easy access
to enhance their learning.
In 2023 we continued with our ‘Continuous Professional
Development for all’ approach, over 4,000 courses were
accessed via our Learning Management System, ‘Shine’,
with over 4,790 hours of learning completed. During the
year we also expanded our apprenticeship levy use across
the business, with new programmes of learning being
undertaken at Levels 3-7 across a number of departments.
Our plan for 2024 is to continue to offer apprenticeships to
support young people who are new into the workforce, as
well as building capability in our existing workforce.
2021 – 2023 progress
>
The Group has continued its commitment to give
1% of EBITDA to its charity PACT through which
it has maintained its long-standing partnership
with Memusi.
>
Improvements have been made in the equal
representations at salary quartile level by gender
and ethnic mix across the business with an ethnic
employment proportion increasing from 14%
to 18%.
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Environmental, Social and Governance
continued
Social
continued
Diversity, Equity, Inclusion & Belonging
(“DEIB”)
DEIB has been identified as an integral part of the Group’s
objective of providing a welcoming and inclusive working
environment where people are engaged, recognised
and rewarded.
We strive to ensure all our colleagues are treated fairly,
with dignity and feel a sense of belonging. Our 2023
employee survey found that 87% of our people felt
positively that Personal Group was a diverse and inclusive
place to work. Whilst we are a small business, we are
committed to improving our DEIB scores further still. To this
end, we launched a new mandatory learning course for all
colleagues for DEIB, to educate and support our colleagues.
As part of our commitment to being a diverse and inclusive
employer we set up a DEIB strategy group in 2023. Our
focus has been on understanding our data against the
data held by ONS for the Milton Keynes region and have
refreshed our reporting, adding relevant data fields and
choices for self-description, through our new HR system
to include sexual orientation, neurodiversity caring
responsibilities, and religion.
Whilst our current data is broadly in line with the region, one
of our aspirations is to be more reflective of our local area
with our recruitment data for 2023 showing a positive trend
for ethnicity. Our focus areas for 2024 include gender identity
and disability and we have already implemented several new
initiatives to support this.
At the end of 2023 we signed up to be part of the
governments Disability confident scheme, level 1 and are
working toward level 2 in 2024.
To ensure our recruitment process is fair and does not
disadvantage applicants, we have introduced a new
psychometric assessment with additional time for
applications applicants identifying as neurodiverse or
for whom English is a second language. We have also
introduced a gender decoding software, to help make
our advertised roles more inclusive, and showcase
our vacancies on additional job boards to reach a more
diverse pool of candidates and support our drive to
foster an even more equitable, diverse, and inclusive
working environment.
Supporting society
Our holistic offering has been designed to support
and engage employees and their families from all
demographics, including those from lower income groups,
in both work and life. We are particularly aware that
people from lower income groups can find it difficult to
access appropriate financial services products – the FCA
recognise they are an underserved group. Our simple, easy
to buy and low cost products meet a gap for people who
find it difficult to use the internet for financial services
products and we have specifically adapted our products
to meet their needs.
Operating ethically is also very important to us and we
have in place policies including: Treating Customers Fairly,
Whistleblowing and Anti-Bribery. We also have a Modern
Slavery policy which covers our policy on human rights,
child labour and forced labour.
Supporting our community
PACT
Personal Assurance Charity Trust (PACT) has donated
around £2m to charitable causes since it was founded
in 1993. The Group has historically donated approx. £100k
to PACT per year, which is then allocated in a number of
ways. The PACT Committee work with, and allocate funds
to, specific projects within many local charities with a view
to continued involvement beyond pure financial support.
Key local projects around our offices for 2023 included:
Environmental, Social and Governance
continued
>
Memusi Foundation
– £47k continuing our ongoing
partnership with Memusi we also sent a team of PG
employees to visit and support the school in Kenya which
is funded through PACT.
>
Unity MK (formerly Winter Night Shelter MK)
– £13.5k
to help people in crisis, including rough sleepers, sofa
surfers and those who are vulnerable. This year’s
donation will go towards welfare provision, Mental
Health counselling, preparing guests for work.
>
Northamptonshire Domestic Abuse Service (NDAS)
£10K towards the cost of a children’s support worker
to help to support victims of domestic abuse with
rehabilitation and counselling.
>
Safety Centre
– Hazard Alley – £10K to help deliver
another year of bespoke knife crime intervention sessions
to 1,200 Year 6 students in Milton Keynes.
>
Worktree
– £10K towards the development of the Virtual
Career Workout which allows volunteers to be interviewed
remotely by school classes around the country.
>
Harry’s Rainbow
– £10K towards supporting children
and young adults who have been bereaved of a parent
or sibling in Milton Keynes and surrounding areas. Our
donation will fund an art project, which will connect
those in similar circumstances and enable a supportive
experience for those suffering from grief.
Group employee breakdown by gender
as at 31 December 2023
Male
Female
Directors
4
3
Managers
23
24
Employers
102
103
129
130
32
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Our goal is to continue to ensure that our governance
is robust and compliant with all regulatory and
legal frameworks.
The Board recognises the important role a robust corporate
governance framework plays in the successful delivery of
our long-term strategy and remain committed to adhering
to the QCA Corporate Governance Code. We continue to
monitor our performance against in line with each of the
10 principles. (see
Page 37
).
The Chairman and the Board is ultimately responsible
for establishing the Group’s governance structure, the
effectiveness of internal controls, risk management, and
the direction of the Group in accordance with our purpose
and values to help deliver our strategy.
Board composition
The composition of our Board is carefully selected to ensure
a diverse and varied set of skills, cultures, experiences and
knowledge to promote success within the business.
We are working towards targets to ensure that our
Board is diverse and inclusive. To support this, we have
a policy in place regarding the gender diversity of the
Board and currently have 14% of Board members with
a cultural background different from the location of the
corporate headquarters.
We also strive to have equal representation of both
executive and non-executive Board members to allow
for fair, varied and independent opinion. Board members
are elected with a majority vote and have the authority
to hire external advisers or consultants without
management’s approval.
With the Chief Executive succession in August 2023, the
Nominations Committee had a renewed focus. Introduced
in 2021, the committee is responsible for reviewing the
structure, size and composition (including the skills,
knowledge, experience and diversity) of the Board and
making recommendations to the Board with regard to any
changes. The Nominations Committee Report on
Page 48
contains more detailed information on the Committee’s
activity during the year.
Board compensation
The Board’s compensation is determined by our
Remuneration Committee, chaired by Non-Executive
Director Maria Darby-Walker. Our shareholders have the
right to vote on executive compensation.
For more information on how the Remuneration Committee
sets appropriate compensation |
 Page 44
Policies
The following polices are currently implemented
by the Group:
Modern Slavery – The Modern Slavery Act (2015) requires
a commercial organisation over a certain size to publish
a slavery and human trafficking statement for each
financial year. This statement can be found on our
website personalgroup.com and is made available to
our entire workforce.
Whistleblowing – We have a whistleblowing policy in place,
which complies with local regulatory requirements and is
designed to protect those who report wrongdoing in the
workplace. Details of the policy are communicated to all
workforce members.
Anti-Bribery and Corruption – The Group’s Anti-Bribery
and Corruption Policy is reviewed annually and includes
all Directors, employees and all third parties operating on
its behalf. There were no instances of bribery or corruption
in the period.
Further detail is included in the
Corporate Governance section |
 Page 36
Governance
Governance is
central to our ethos
of
operating with
integrity.
2021 – 2023 progress
>
Independent directors remain at 57% of the
Board, with a 43% female ratio and a 14% ethnic
proportion, all of which are within the targets set
by the Board.
>
The Chief Executive pay ratio as a proportion of
the median employee has remained in line with
the market averages.
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Environmental, Social and Governance
continued
Section 172 Statement
Why we engage with
How we engaged in 2023
What matters to the Group
Our Policyholders
Our policyholders are key to the long-term
success of the Group.
The retention of existing, and attraction of new,
policyholders is equally important.
We aim to make any interaction with Personal
Group as positive and simple as possible and
ensure that our products are regularly reviewed
and fit for purpose.
Provision of suitable and targeted employee
benefits to our relevant market sectors.
Our primary interactions are to provide individual face-to-face presentations of our products
to potential and existing policyholders at their place of work. In 2023 we continued to expand
our sales channels offering one to many webinars to allow access to our products to a greater
audience, but focused on our, unique in the market, face to face approach where possible. This
allows the greatest ability for potential policyholders to ask questions and have the human
interaction our customers are looking for.
Policyholders who held policies at 31 December 2021 continued to benefit from an additional
outpatient appointment for 2023 in recognition of the fact that during COVID reduced NHS
activity had meant that, in many cases, they were unable to make full use of their plan/benefits.
As part of our operational improvements to support Consumer Duty we implemented Voyc,
an AI compliance tool which has enabled full coverage of sales presentations by the field sales
team, ensuring better outcomes for customers. We also introduced additional point of sale
information to enhance customer understanding of the products they have bought.
We have maintained a hybrid working environment for our customer relations team. We value
the ability to have colleagues in the office to support training and development of staff and to
allow greater flexibility in responding to queries and claims made by our policyholders, some of
whom are calling from a place of vulnerability.
In 2023 our Customer Relations Team took over 60,000 calls and dealt with over 47,000
emails and online queries.
>
Our products are relevant and
provide cost effective protection
>
Fair and consistent pricing
>
Efficient and sympathetic
processing of claims
>
Ease of access to customer
service
>
Strong net promoter score
>
Strong retention rates
Our Clients
Our purpose is to help companies improve their
effectiveness and profitability by improving their
staff engagement and retention. Improving such
metrics in turn improves our customer retention
and encourages new business.
We engage and build relationships with our customers and clients in several ways, from face-
to-face interaction to holding industry and other business forums and producing white papers
on topics that are relevant for their businesses.
We also recognise the importance of system security for our customers and their employees
and have ISO 27001 accreditation across the whole Group and ISO 9001 covering the Employee
Benefits Platform operated by the Group.
>
Product range, price and quality
>
Convenience and accessibility
>
Customer service
>
Fair marketing
>
Responsible use of personal data
>
Ethics and sustainability
>
Becoming a trusted partner
The Directors are aware of their duty under s172 of the Companies Act 2006 to act in the way they would consider, in good faith, would be most likely to promote the success of the
Group for the benefit of its members as a whole and, in doing so, to have regard (amongst other matters) to:
>
the likely consequences of its decisions in the long-term;
>
the interests of the Group’s employees;
>
the need to foster the Group’s business relationships with suppliers,
customers and others;
>
the impact of the Group’s operations on the community and the environment;
>
the desirability of the Group maintaining a reputation for high standards of
business conduct; and
>
the need to act fairly between members of the Group.
The Chairman sets out the text of s172 Companies Act 2006 on every Board agenda by way of a reminder.
The table that follows is a description of our key stakeholder groups and how we engaged with them in 2023.
34
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Why we engage with
How we engaged in 2023
What matters to the Group
Our Colleagues
The Group’s long-term success is predicated on
the commitment of our employees to our purpose
and demonstration of our values. In order to deliver
great customer service and improve our already
high staff engagement scores we need to ensure
that we provide an appropriate environment and
communication channels to both attract and retain
talent for now and the future.
We have an open, collaborative, and inclusive management structure and actively engage
regularly with our employees.
We remunerate with competitive market-based pay, sector leading rewards and benefits
alongside a learning culture and great career opportunities. We continue with our hybrid
working policy for all office-based staff, feedback tells us that this helps our colleagues achieve
a better work-life balance with subsequent gains in engagement and productivity.
Following feedback from our 2023 Employee Engagement survey, we introduced a number of
employee benefit provisions which can be seen in detail on page 31. We have also created a DEIB
strategy group in 2023 with a focus on understanding the Groups data against the regions in
which we operate.
>
Fair employment
>
Competitive pay and benefits
>
Development and career
opportunities
>
Collaborative and supportive
work environment
>
Health and safety and colleague
wellbeing
>
Responsible and respectful use
of personal data
>
Ethics and sustainability
Our Suppliers
Our suppliers are fundamental to the quality of
our products and to ensuring that as a business
we meet the high standard of conduct that we set
ourselves. Our Hapi platform contains numerous
third-party offerings which add value to the overall
proposition. It is important that we ensure good
working relationships with those suppliers but also
to choose partners that allow the Group to fulfil its
day-to-day operations to deliver our products and
services to the best standard possible.
We regularly engage in open and two-way conversations with our largest suppliers.
Key suppliers are invited to attend and present at our client conferences or workshops.
We continually review and update our supplier onboarding process and conduct annual reviews
on all key suppliers to the Group.
Whilst we work with our suppliers to ensure that they have effective controls in place
to protect the security and privacy of our customers data.
>
Long-term partnerships
>
Collaborative approach
>
Open terms of business
>
Fair payment terms
Our Community & Environment
The Board recognises the importance of
leading a Group that not only generates value
for shareholders but also contributes to the
wider society.
We encourage all our employees to engage in the local community and work with our PACT
Committee to utilise the funds in the Personal Assurance Charitable Trust to support charities
at home and abroad as discussed on page 32.
We are conscious of the need for our business to focus on long-term sustainability, during
2023 we have seen the replacement of most of the Group’s fleet with a range of hybrid and low
CO
2
petrol cars replacing less environmentally friendly cars. We are also taking steps to lessen
commuting for our field sales team, both for their benefit but also for the environmental
impact generated.
We continue to review ways in which we can be more active in the local community and are
beginning discussions with local schools and colleges to support them and to offer ourselves
as a work experience possibility for their students.
>
Reduce environmental impact
>
Invest in local community
>
Promote environmental offerings
on platform, i.e. Cycle to Work
>
Supporting local community by
creating jobs and providing work
experience and apprenticeships
Our Shareholders
Our shareholders are key to the long-term success
of the business. Through our investor engagement
activities, we strive to obtain investor buy-in into
our strategic objectives and how we plan to deliver
on them. We create value for our shareholders by
generating strong sustainable profits and dividends.
Through our investor relations programme, which includes regular updates, meetings,
roadshows and our Annual General Meeting, we ensure that shareholders’ views are brought
into the Boardroom and considered in our decision making.
With a new Chief Executive the Group will be looking to conduct a series of investor roadshows
to follow the release of the accounts to further articulate the future strategy of the Group.
>
Financial performance
>
Strategy and business model
>
Dividend
>
Long-term growth
>
Reputation of the Group
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Overview
Section 172 Statement
continued
The Board continues to have a significant role to play
in establishing the culture of the business.
Corporate Governance
2023 Committee meeting dates
Board
26 Jan
2 Mar
21 Mar
5 May
25 May
22 Jun
20 Jul
12 Sep
6 Nov
30 Nov
Audit
21 Mar
12 Sep
Risk & Compliance
26 Jan
12 Sep
30 Nov
Nominations
26 Jan
Remuneration
26 Jan
21 Mar
30 Nov
Chair’s Introduction
Dear Shareholder
My role as Chairman of Personal Group is to ensure that the
Board is performing its role effectively. This means making
sure the Directors have the capacity, ability, structure,
diversity and support to respond to the opportunities
being created for us, whilst having consideration of our
responsibilities under s172 of the Companies Act 2006.
I also have responsibility for ensuring the robust governance
of the Group through challenge and direction of the Senior
Leadership Team. Good governance should enhance
performance and deliver positively for our shareholders,
staff, customers, suppliers and other stakeholders whilst
still enabling achievement of the Group’s strategic aims.
The Board continues to have a significant role to play in
establishing the culture of the business, ensuring that it is
consistent with our business model and suitably cascaded
through the Group.
This is monitored through engagement with the wider
investor community, through involvement of the Board
Committees and by use of the wide-ranging experience,
skills and capabilities of Board members.
We continue working on an integrated succession plan for
the Board and, as noted in my Chair’s report earlier in this
document, we have appointed a new Chief Executive, Paula
Constant, during the year with Deborah Frost having chosen
to retire, this has allowed for a review of the senior positions
within the business identifying gaps and any succession
issues which the Board and Executive are currently in the
process of resolving.
The year presented a number of pressures on our workforce
with the increased cost of living and general uncertainty in
the UK. The Senior Leadership Team has worked to ensure
that the employees of the Group are supported against
these pressures by benchmarking roles across the business
to ensure that pay reflects the markets rates and ensuring
that there is support for staff both with regard to their
working environment by virtue of the right equipment
and appropriate hybrid working conditions and with
other, more personal matters, ensuring access to relevant
mental and physical health provisions as part of our staff
benefits package.
In 2023, we continued to develop our governance processes
to improve adherence to the Quoted Companies Alliance
(QCA) Corporate Governance Code which the Group adopted
in 2018. The Board does not consider that it departs from
any of the principles of the Code and we continue to
monitor our performance against each of the 10 principles.
We plan to adopt the revised 2023 code from the start of
2025. The Board is able to deliver effective decision making
and subsequent drive of value for shareholders, based on
the quality information which it receives.
During 2023 we have addressed the recommendations
raised in the external board effectiveness review conducted
in 2022, however, the 2023 internal review was postponed
to early 2024 to allow the new Chief Executive to gain
a full picture of the business prior to the review. We are
committed to external independent reviews every three
years and will continue to complete annual internal board
effectiveness reviews in the intervening years.
The Board met 10 times in 2023 and the number of meetings
each Director attended can be seen on pages 38 and 39.
In addition, the reports of the Audit, Risk and Compliance,
Remuneration Committees and Nominations and SM&CR
Committee can be seen later in this section.
Martin Bennett
Independent Non-Executive
Chair
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QCA Code compliance
Principle 1 – Establish a strategy
and business model, which
promote long-term value for
shareholders.
Principle 3 – Take into account
wider stakeholder and social
responsibilities and their
implications for long-term success.
Principle 5 – Maintain the Board
as a well-functioning, balanced
team led by the Chair.
Principle 7 – Evaluate Board
performance based on clear and
relevant objectives, seeking
continuous improvement.
Principle 9 – Maintain governance
structures and process that are
fit for purpose and support good
decision-making by the Board.
Principle 2 – Seek to understand
and meet shareholders’ needs and
expectations.
Principle 4 – Embed effective
risk management, considering
both opportunities and threats,
throughout the organisation.
Principle 6 – Ensure that between
them the Directors have the
necessary up to date experience,
skills and capabilities.
Principle 8 – Promote a corporate
culture that is based on ethical
values and behaviours.
Principle 10 – Communicate how
the Company is governed and
is performing by maintaining a
dialogue with shareholders and
other relevant stakeholders.
Personal Group provides insurance
services and a broad range of
employee benefits and wellbeing
products to businesses across the
UK. The Group enables employers
to improve employee engagement
and support their employees
physical, mental, social and
financial wellbeing, supporting our
vision of creating a brighter future
for the UK workforce. Full details of
our business model can be found on
page 12 and on the Group website
(www.personalgroup.com).
As a Board we understand our
duty to promote the success of
the Company whilst considering
the views of, and impact on,
our wider stakeholder group
of customers, policyholders,
suppliers, colleagues and our
community and environment
as well as our shareholders.
A more detailed summary of the
Group’s engagement with all
our stakeholders can be seen on
pages 34 and 35.
The Group maintains, and is
satisfied that, the Board has a
suitable balance of independence
and knowledge, with Directors
encouraged to challenge all
matters. The Board meets regularly,
with a formal schedule of matters
for its approval. The Board is
supported by regular engagement
with the Senior Leadership Team,
and a system of formal Board
committees. Directors are required
to devote sufficient time to carry
out their role.
Board members are each set annual
objectives, with performance
feedback provided by corresponding
Executive and Non-Executive
members. Board evaluation is the
responsibility of the Chairman.
Internal board effectiveness
reviews are undertaken yearly,
with independent reviews at least
every three years. The findings
from the 2022 external review have
been fed back to the Board and
actions implemented. Following
the onboarding of the new Chief
Executive an internal review will
be conducted in early 2024.
The Board is collectively
responsible for the long-term
success of the Group and for
setting and executing the
business strategy. It fulfils this
responsibility through Board and
other Committee meetings held
regularly throughout the year. The
meetings held in 2023 for the Board
and other Committees can be seen
on page 36.
Regular dialogue takes place with
shareholders through initiatives
including the Annual General
Meeting, investor roadshows,
regulatory announcements and the
Report and Accounts. During 2023
our Chief Executive, CFO, Chair and
other Non-Executive Directors
met virtually, and in person, with
key investors. We also hosted
our investor events in March and
September 2023.
An updated QCA Corporate Governance Code was announced on the 13th November 2023. Personal Group will strengthen its understanding and ensure compliance with the changes ahead of the effective
implementation date affecting the 2024 accounts.
The Board is responsible for
identifying and mitigating
risks to the Group achieving its
strategic objectives. It addresses
risk management through an
“Enterprise Risk Management
Framework”, and a system of risk
governance, including a Risk and
Compliance Committee. During
2023, a risk based internal audit
function was again provided
by RSM. For further details see
page 41.
The background and experience
of the Board ensures there is
an effective and appropriate
balance of skills and knowledge.
Additional training is provided
where needed and Board members
are encouraged to maintain their
professional development. As
noted on page 36 there has been
one addition to the Board in the
year with Paula Constant taking up
her role as Chief Executive.
The Board believes Group culture is
set from the top of the organisation.
These values form a core part of
how the business is managed,
from recruitment to training, and
ongoing reward and recognition.
An employee engagement survey
was conducted in June 2023 which
produced strong results but also
some feedback which has been
actioned upon as noted in the ESG
section on page 30.
The Group communicates through
a variety of regular digital and
traditional communications. These
include face-to-face meetings,
the Annual Report and Accounts,
Interim Results, investor news
announcements and information
provided on the Group’s website.
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Corporate Governance
continued
Board of Directors
Martin Bennett
Non-Executive Chairman
Appointed January 2021
(previously Non-
Executive Director; appointed Chairman May 2021)
Martin is an experienced non-executive and
chairman, bringing over 20 years of financial
service experience. He has a diverse and
extensive skill set, stretching across commerce,
operations and finance. Prior to embarking on
a non-executive career in 2018 Martin spent
nearly 15 years at HomeServe plc creating a
FTSE 250 services business, holding CEO, COO
and CFO responsibilities in the UK, US and Europe.
Before this he spent three years as Finance
Director of Clarity Group and 10 years at
Arthur Andersen where he worked in audit and
transaction services.
Skills, personal qualities and capabilities
An accounting and finance graduate,
Martin is a Fellow of the Institute of
Chartered Accountants.
External appointments
Chairman of Ventureprise plc, Homeowner
Services, and the Association of Foreign
Exchange and Payments Companies (AFEP).
Chair of Lumon until 31 August 2022.
Sarah Mace
Chief Financial Officer
Appointed October 2020
(previously Company
Secretary from April 2014)
Sarah joined Personal Group in January 2014
as Group Financial Controller and Company
Secretary.
Previously Head of Finance for private equity
owned Chicago Leisure Ltd, she also has
experience in a broad range of industries
including roles at large communications
firm Cable and Wireless and various life and
pensions companies.
Skills, personal qualities and capabilities
Sarah is a Fellow Member of the Association
of Chartered Certified Accountants and also
has a Master’s degree in mathematics from
Oxford University.
Maria Darby-Walker
Senior Non-Executive Director
Appointed June 2019
(Appointed Senior
Non-Executive Director in January 2021)
Maria joined Personal Group as Non-Executive
Director in June 2019 and is Chair of the
Remuneration Committee.
In 2005 she started her own consultancy,
advising the boards of leading brand names
on business-critical issues including mergers
and acquisitions, crisis management, brand
and reputation, ESG, equality and diversity,
and financial regulation. Her client list
included: The Financial Conduct Authority, The
Investment Association, Unum, Iglo / Birds Eye,
Cadbury and Rio Tinto amongst others.
Skills, personal qualities and capabilities
Beyond her technical and industry qualifications,
Maria is also a qualified leadership coach and
mentor being appointed an honorary visiting
fellow of Oxford University in September 2022.
External appointments
Senior Independent Non-Executive Director
at Redwood Bank Ltd.
10/10
Meetings attended
10/10
Meetings attended
10/10
Meetings attended
Paula Constant
Group Chief Executive
Appointed August 2023
With a career spanning over 20 years in the
fields of telecoms, banking, and outsourcing,
Paula brings a wealth of experience and
expertise to the role. Her executive journey
includes notable positions at renowned
companies such as National Australia Bank,
Mitie, BT, Vodafone, Accenture and most
recently, Woven.
She has a strong track record of delivering growth
through enhancing distribution and improving
customer service in B2C and B2B organisations.
During her time with BT, she delivered substantial
improvements in B2B engineering revenues, in
addition to working with the regulator and over
500 customers to significantly reduce delivery
lead times and complaints.
Skills, personal qualities and capabilities
Paula holds a BA in music and management
studies from the University of Cambridge. In 2016,
she was honoured with a Leader Award from
FDM Everywoman in Technology, showcasing her
leadership and influence in the industry.
3/4
Meetings attended
The Board has a combined wealth of knowledge and experience to help the business achieve success.
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Committee Membership Key
Audit
Committee
Nominations &
SM&CR Committee
Remuneration
Committee
Chair of the
Committee
Risk and Compliance
Committee
Independent
Bob Head
Non-Executive Director
Appointed November 2016
Bob joined Personal Group in July 2016. With
over 25 years in Non-Executive Director roles,
Bob brings an extensive range of knowledge
and experience to the Board.
His diverse working life has seen him work
worldwide with almost every branch of
financial services. He also has experience of
software and marketing companies as well
as government.
Skills, personal qualities and capabilities
Further to his ACA, ACII and FCIB with an MA
from Oxford, Bob has solid blue-chip experience
with big brands and business and a rich tapestry
of management roles.
External appointments
Non-Executive Director at Alexander Forbes
and Chair of Audit and Remcom committees
at Mirriad.
Andy Lothian
Non-Executive Director
Appointed July 2017
(previously Executive Director,
appointed Non-Executive Director in January 2021)
Andy Lothian joined Personal Group in 1998 as
a Group Account Executive focusing on new
business sales and client servicing. His passion
for excellence, drive, and commitment has seen
him go from strength to strength. His journey at
Personal Group has evolved greatly over the last
two decades, through Sales Management roles
and eventually 11 years as Managing Director of
Personal Group Benefits.
In January 2021 Andy moved into a Non-
Executive Director role on the Board.
Skills, personal qualities and capabilities
Andy has extensive knowledge and experience
of the important day-to-day role that
all Personal Group employees play in the
development and growth of the business.
External appointments
Director of Lothian Property Group.
Damian Kane
Commercial Finance Director and
Company Secretary
Appointed October 2020
Damian first joined the business in 2015
as Senior Finance Manager, with his role
evolving to Financial Controller in 2018. He
was appointed Finance Director and Company
Secretary in 2020.
Damian has extensive knowledge and experience
in a variety of industries having held finance
positions within Amtech Group Ltd and Connells
Group subsequent to his professional training as
an auditor for Grant Thornton UK LLP.
Skills, personal qualities and capabilities
Damian is a Chartered Accountant and holds
a degree in Economics and Politics from the
University of Southampton.
10/10
Meetings attended
10/10
Meetings attended
Ciaran Astin
Non-Executive Director
Appointed May 2022
Ciaran is an experienced leader in consumer
services businesses across the insurance,
telecoms and energy sectors. Ciaran is currently
a consultant to businesses in the telecoms and
insurance sectors.
From 2019 to 2023, Ciaran was Managing
Director of ClearScore’s Insurance-related
business. Between 2012 and 2019, he held
senior leadership roles at leading personal lines
insurers, Hastings Group and Direct Line Group.
Earlier in his career, Ciaran spent two years
driving product transformation in Centrica’s
consumer business, following seven years in
commercial leadership roles in the telecoms
sector with BT Group and Telewest.
Skills, personal qualities and capabilities
Ciaran holds a Masters in Engineering from
Cambridge University.
10/10
Meetings attended
10/10
Meetings attended
Committee Membership Key
Audit
Committee
Nominations &
SM&CR Committee
Remuneration
Committee
Chair of the
Committee
Risk and Compliance
Committee
Independent
Personal Group Holdings Plc
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Strategic Report
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Financial Statements
Overview
Board of Directors
continued
Dear Shareholder
I am pleased to present the Risk and
Compliance Committee Report for the year
ending 31 December 2023.
Activity during the year
The Committee focuses its debate on key
risks, emerging risks, new risks and areas
where we perceive we have increased risk.
We then assess whether the risk has been
optimised. We use the word “optimise”
rather than “mitigated” since not all risk can
be economically eliminated – for example,
the economy.
The Committee’s Chair reports formally
to the Board on its proceedings after each
meeting and during the year the Committee
met three times, overseeing significant
Group-wide projects which included:
>
Consideration of the Group’s approach to
the challenging economic outlook which
persisted throughout 2023, including how
to optimise the Group’s current offering
and tailor the go to market message
to mitigate the risk of any impacts on
income from clients and customers.
>
Implementation of the FCA Consumer
Duty regime, ensuring that the gap analysis
carried out in 2022 had been appropriately
addressed and ensuring that the Group
was compliant with the new regime.
>
A deep dive into the value in the insurance
products underwritten, and sold, by
Personal Group companies, reviewing
peer-related data in the context of
healthcare cash plans.
>
Update and further development of the
Own Risk and Solvency Assessment (ORSA)
for Personal Assurance Plc to account for
current risks and exposures, particularly
in relation to inflationary pressures and
negative cost of living effects which have
persisted throughout 2023.
>
The regulatory capital is formulaic. We are
also thinking about the capital we need for
our non-regulated businesses.
>
An ongoing focus on cyber risks as well as
operational resilience to deliver what we
have promised our clients and customers
remains a key topic of discussion for the
Committee. We are pleased to note that
we remain certified for ISO27001.
In addition, other work undertaken during the
year included:
>
Ongoing consideration of the Own Risk and
Solvency Assessment (ORSA) for Personal
Assurance Plc to account for current risks
and exposures.
>
The regular review of the group’s exposure
to the risks and threats to the strategic
objectives, setting the risk appetites and
agreeing tolerances.
>
The regular review, consideration and
approval of existing Group policies used
across the business.
>
Consideration of management information
which assesses levels of quality and
compliance, and the effectiveness of the
Information Security Management System.
>
Consideration of the quality of the sales of the
insurance policies, and understanding how
artificial intelligence (AI) is used to enhance
quality and protect consumers. We are using AI
to help assess whether sales are compliant and
meet Personal Group standards.
>
Oversight of the resolution of actions arising
from an external review of our health and
safety regime.
>
Annual appraisal of the insurance products
for value, price and suitability.
As in previous years, the Committee has
continued to apply its mind to the risk logs
both in terms of completeness and how risks
are optimised. The Committee has also worked
closely with the Audit Committee to ensure that
the Committees neither duplicate work nor allow
things to slip between the gaps. All directors are
members of risk committee. We believe the size
of Personal Group is such that we get a better
result by organising ourselves this way.
Bob Head
Independent Non-Executive Director
18 March 2024
Meetings held
3
Risk and Compliance
Committee members
Meeting Attendance
Bob Head (Chair)
3/3
Martin Bennett
3/3
Maria Darby-Walker
3/3
Andy Lothian
3/3
Ciaran Astin
3/3
Deborah Frost*
2/2
Sarah Mace
3/3
Paula Constant*
1/2
Risk and Compliance Committee Report
*
Paula Constant was appointed as Chief Executive,
and replaced Deborah Frost, on 1 August 2023.
The Committee’s role is to assess the effectiveness of the Group’s risk management framework,
to set the group’s risk appetite and to oversee compliance with regulatory requirements.
Personal Group Holdings Plc
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Overview
Dear Shareholder
The Committee oversees the appointment
of, and relationship with, the external auditor
and ensures compliance with other regulatory
requirements that are relevant to the Group,
as well as gaining reassurance that the control
environment is fit for purpose. The internal
audit function is currently outsourced to
a third-party, and the Committee is also
responsible for overseeing the effectiveness
of internal audit in line with the Chartered
Institute of Internal Auditors (IIA’s) Guidance
on Effective Internal Audit.
Roles and Responsibilities
The Audit Committee assists the Board in
discharging its responsibilities with regard
to the oversight of:
Financial reporting:
>
Monitoring the integrity of the financial
statements of the Group, including
its annual and half yearly reports, and
considering the clarity and completeness
of disclosures therein;
>
Reviewing and challenging any changes
to accounting policies, accounting for
significant or unusual transactions and
the application of appropriate judgements
and estimates;
>
Considering new accounting standards
and pronouncements and comments
from the Financial Reporting Council; and
>
Advising the Board on whether the
Group’s financial statements are fair,
balanced and understandable. Particular
attention has been given to ensuring the
business commentary is consistent with
the reported results.
Internal and external audit:
>
Overseeing the Group’s relationship
with its external and internal
auditors, including their appointment,
remuneration, independence and the
effectiveness of the audit processes;
>
Developing and implementing a policy
on the supply of non-audit services by
the external auditor; and
>
Monitoring and reviewing the scope
of work and effectiveness of the
outsourced internal audit function in
the context of the Group’s overall risk
management system.
Internal controls:
>
Reviewing the adequacy and
effectiveness of the Group’s internal
financial controls and risk management
systems; and
>
Reviewing the Group’s arrangements
with regard to employee/
contractor whistleblowing, fraud
detection, prevention of bribery and
money-laundering.
Membership and meetings
The Audit Committee comprises the
Independent Non-Executive Directors
and meets at least twice a year.
The Directors’ profiles and qualifications
are included on pages 38 and 39.
Risk matters are covered at the Risk and
Compliance Committee but all members
of the Audit Committee are also members
of the Risk and Compliance Committee,
which ensures tight co-ordination.
Two formal meetings were held during
2023 and all Committee members were
in attendance. Additionally, the remaining
Board members, Head of Risk and Company
Secretary were present at all meetings.
Meetings held
2
Audit Committee
members
Meeting Attendance
Bob Head (Chair)
2/2
Martin Bennett
2/2
Maria Darby-Walker
2/2
Ciaran Astin
2/2
Audit Committee Report
The primary role of the Audit Committee is to assist the Board in fulfilling its oversight
responsibilities in areas such as the integrity of financial reporting, the effectiveness of the
internal controls as well as oversight of the internal and external audit functions.
Personal Group Holdings Plc
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Overview
The meetings of the Committee are
designed to facilitate and encourage
communication among the Committee,
the Group’s outsourced internal audit
function (RSM) and the appointed external
auditor. The Committee meets with the
internal auditors and the external auditors,
with and without management present,
to discuss the results of their examinations,
their evaluations of the Group’s internal
control and the overall quality of the
Group’s financial reporting. In addition, the
members of the Audit Committee also meet
separately to consider any issues.
Activities of the Audit Committee
during the year
The Committee discussed with the Group’s
internal and external auditors the overall
scope and plans for their respective
audits. As a part of these discussions the
Committee has considered whether there
are further risk areas that need to be
considered in addition to those raised by
both sets of auditors. In addition, the key
work undertaken by the Committee during
the year under review and up to the date
of this Annual Report included:
>
Review and approval of the 2022 Annual
Report and Accounts and 2023 Interim
Results statement.
>
Approval of the Solvency and Financial
Condition Report.
>
Review of internal audits carried out
by RSM.
During 2023 RSM undertook audits, in line
with the agreed scope, over areas including
assurance frameworks, complaints, financial
crime, SMCR. RSM also undertook a follow
up of the marketing effectiveness review to
ensure we had properly covered off the new
regulatory requirements.
The Committee received reports from
the internal auditors throughout the year
and was satisfied with the effectiveness
of internal controls and risk optimisation.
It supports the recommendations made
by the internal auditors and is satisfied
with the plans in place and the actions taken
or planned by management in response
to these recommendations and monitors
the clearance of the items raised to ensure
that they are resolved on a timely basis.
The approach in developing the internal
audit plan for 2023 (and for 2024) was based
on analysing the corporate objectives,
risk profile and assurance framework of
the Group, as well as other factors affecting
the Group. The aim is to cover all significant
risk areas at least once every three years.
The Audit Committee regularly discusses
the performance of internal audit within
the Committee, with management and
with internal audit. Given the size of the
Group we believe that an outsourced
Internal Audit function gives us access to
more areas of expertise than an internally
resourced department.
Significant reporting issues
and judgements
In fulfilling its oversight responsibilities,
the Committee has reviewed and discussed
the audited consolidated financial
statements and the related schedules
within the Annual Report with Group
management, including a discussion of
the appropriateness of the accounting
principles, the reasonableness of significant
judgements and the clarity of disclosures
in the financial statements. The areas the
Audit Committee have focused on are
detailed later in the report.
Key Group issues included:
>
Consideration was given to going
concern, the adequacy of capital in a
variety of scenarios and the ability to pay
a dividend whilst maintaining our target
of 150% of required regulatory capital.
>
The transition to IFRS 17, including any
changes to the transactional values
and presentation thereof was reviewed
to ensure compliance with the new
standard.
>
Review of the disclosure of voucher
income following a recommendation
from the finance team that the balance
of evidence now supported disclosure as
agency rather than principle.
>
The carrying value of goodwill in the
Group’s financial statements was
reviewed in line with the difficult
trading environment.
The Committee reviewed the
recommendations of the finance function
and received reports from the external
auditor on their findings. Where cost
effective to do so the Committee has
encouraged the external auditors to adopt
a controls approach to the audit rather than
substantive audit approach.
Audit Committee Report
continued
Personal Group Holdings Plc
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Financial Statements
Overview
The significant reporting matters and judgements the Committee considered during the year included:
Carrying value of goodwill and other intangibles
Note 13 & 14
As a result of business acquisitions, the Group
has recognised significant balances for goodwill.
Goodwill must be tested annually for impairment;
other intangible assets are tested when there are
indicators that they may be impaired. The assessment
of potential impairment requires a number of
judgements and estimates to be made in determining
the relevant future cash flows and the discount rate
to be applied.
The Committee reviewed the key financial assumptions
underpinning cash flow projections, the discount and
long-term growth rates applied thereto and the results
of sensitivity analyses.
The Committee was satisfied that no impairment was needed
on the goodwill of Pay & Reward, and reiterated that the
initial assessment of the acquired intangible assets and
goodwill was appropriate.
The presentation of “Adjusted EBITDA” alongside
statutory profit
Note 5
Adjusted EBITDA, in this context, looks to adjust
for non-underlying trading activity within the
financials for year which are material in size, in order
to fairly remunerate the management on underlying
performance.
The Committee considered the approach adopted and was
satisfied that the approach continues to help provide a
clear and balanced view of the underlying performance of
the business than simply focusing on profit after tax. It also
concluded that the approach is being applied consistently
from year to year and the rationale is clearly presented and
reconciled back to the IFRS published numbers.
The valuation of the liabilities for incurred claims
Note 24
In line with IFRS 17 the Group retains a liability for
incurred claims arising from claims in the current and
preceding financial years which have not yet given
rise to claims paid.
It is estimated based on the current information,
and the ultimate liability may vary as a result of
subsequent information and events.
The Committee has reviewed the methodology and
calculations relating to the claims provisions held by
the insurance entities within the Group to ensure that
the incurred but not reported claims reflect not only the
historical trends of the insurance policies sold but also
continuing impacts post COVID-19 including considerations
such as increased hospital waiting lists. The Committee was
satisfied that the amount reserved for across the Group is
appropriate given the data available. It should be noted that
the insurance business is short tail and post year end claims
are examined before the accounts are signed off.
External audit
EY LLP were first appointed for the 2019 financial year.
We value continuity providing the Group gets value for
money both for the formal reporting and the third-party
assurance that the business has a good control environment.
The Committee considers a number of areas when
reviewing the external auditor reappointment, namely
their performance in discharging the audit, the scope of
the audit and terms of engagement, their independence
and objectivity, and their reappointment and remuneration.
In addition, as noted, we are seeking more value from the
audit and encourage a control based approach rather than
substantive where it is cost effective to do so.
The external auditor reports to the Committee on
actions taken to comply with professional and regulatory
requirements and is required to rotate the lead audit partner
every five years.
There is also an active, ongoing dialogue between the
Committee and the external auditor on actions to improve
the effectiveness and efficiency of the external audit
process. In addition, the Committee considers risk areas that
might inform the audit strategy and discusses this with the
external auditors.
The Committee has confirmed it is satisfied with the
independence, objectivity and effectiveness of EY LLP
as auditor.
No non-audit services were provided by the external auditors
during this financial year or since they were originally appointed.
Bob Head
Independent Non-Executive Director
18 March 2024
Personal Group Holdings Plc
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Financial Statements
Overview
Audit Committee Report
continued
Dear Shareholder
On behalf of the Board, I am pleased
to present this year’s Remuneration
Committee report. The Remuneration
Report provides a comprehensive picture
of the structure of our remuneration
framework, its alignment with the
business strategy and the rest of the
workforce, as well as the decisions made
by the Committee as a result of business
performance for this year.
Aims of the Remuneration Committee
The primary purpose of the Remuneration
Committee is to review and make
recommendations regarding the
remuneration policy for the Group,
specifically regarding the Group’s
framework of Executive Remuneration.
The Committee’s overall objective is to
align reward for the Executive Directors
with the delivery of profitable sustainable
growth for our shareholders and employees
through the Group’s remuneration
framework which:
>
Offers competitive salary packages
to attract, retain, and motivate
talented people.
>
Operates straightforward, transparent,
and effective reward schemes that
incentivise delivery of stretching annual
targets and delivery of our longer-term
business strategy including ensuring the
organisation operates in a sustainable
way increasing societal benefit.
In addition, the Committee:
>
Offers the chance for all employees
to participate in share schemes.
>
Oversees and reviews the commission
and bonus arrangements for customer-
facing insurance sales employees
to ensure a proper balance between
motivating staff whilst making sales
of the highest quality (i.e. beyond simple
regulatory compliance) and ensuring
good customer outcomes.
To that end, we currently operate the
following remuneration framework:
>
Annual salary and associated benefits (all
employees).
>
Defined contribution pension scheme and
other benefits such as life cover, private
medical insurance (all employees).
>
Performance based annual bonus linked
to delivering stretching financial, business
development, and service-oriented
targets (selected employees).
>
Commission, bonus schemes and
incentives for the customer-facing
insurance teams (selected sales and sales
support employees).
>
Share schemes:
>
PG Share Ownership Plan
(all employees);
>
Company Share Option Plan
(selected employees); and
>
Long-Term Incentive Plans (LTIPs)
(selected senior executives –
see page 47 for further details).
We have continued to consider comparisons
of remuneration for senior employees of
similar sized quoted companies in related
sectors when establishing the levels of
packages set. Our most recent Executive
and Non-Executive Directors’ benchmarking
exercise was concluded in December 2023.
Meetings held
3
Remuneration Committee
members
Meeting Attendance
Maria Darby-Walker (Chair)
3/3
Martin Bennett
3/3
Bob Head
3/3
Ciaran Astin
3/3
Remuneration Committee Report
The Committee’s objective is to align our reward strategy with the delivery of profitable and
sustainable growth for the benefit of all our stakeholders.
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Overview
Composition of the Remuneration
Committee
The Remuneration Committee consists of
the independent Non-Executive Directors,
with the Chief Executive, Chief People
Officer, Company Secretary and any non-
Independent Non-Executive Directors
invited to be in attendance at times.
The Remuneration Committee operates
within defined terms of reference, which
were updated last year. It met three times
in 2023, with ad hoc calls taking place
when required.
None of the Committee has any personal
financial interest, conflicts of interests
arising from cross Directorships, or day-to-
day involvement in running the business
and, as such, the Committee is deemed
to be independent.
The Board determines the remuneration
of the Non-Executive Directors after
benchmarking external market research.
Non-Executive Directors are not involved in
setting their own pay and do not participate
in the bonus schemes or the LTIPs, or in any
other share award scheme.
Performance for the year &
annual bonus
The overall amount of a persons bonus
opportunity which could be paid out
was calculated by the overall EBITDA
performance of the Group for those
not on a sales based target. The total
amount unlocked was 40% of the overall
bonus opportunity.
Given this proportion the bonus was earned
across three elements, Group EBITDA,
a shared objective which was departmental
and personal objectives.
From 2021 to 2023 the ESG targets were
included as part of the performance criteria
of the LTIPs for senior management. From
2024, this will change to annual ESG goals
forming part of the gateway to release bonus
for the year in question for all staff. This will
enable the goals to become more specific
and measurable, as well as becoming more
relevant for the wider business.
Pay increases
The Remuneration Committee approved
a pay increase pot of c.5% for all eligible
employees in January 2023. This reflected
a significant increase from 2022 in
order to support our staff with cost-
of-living increases. During the year we
also conducted reviews of areas of the
business where significant pay inflation
had been seen across certain job types
and adjustments made as required to keep
key employees.
Other Committee activities for the year
The Committee has been actively engaged
in reviewing the changing nature of reward
and benefits. The Committee is in regular
communication with the Chief Executive
and Chief People Officer to ensure that
the Group understands the market norms
and offers packages which are competitive
for our employees. The Committee
particularly focused on the attraction and
retention of scarce talent, with a detailed
review of the pay of all employees, and
those at particular flight-risk in crucial
roles identified.
The Committee reviewed the outcomes
of the revised remuneration and incentive
programme, introduced in 2022, for the
field sales team to ensure that the changes
had brought about the desired results
in terms of financial reward and in the
context of ensuring good behaviours and
customer outcomes in line with consumer
duty legislation.
The Committee also reviewed the existing
CSOP and LTIP arrangements to ensure that
the method of allocation and criteria were
fair and that it represented an appropriate
incentive for retention and performance.
The year ahead
The Remuneration Committee remains
focused on aligning reward with delivering
long-term sustainability and growth of
the business, combined with our on-
going progressive dividend policy. Where
any material changes are made to the
remuneration policy, we will continue
to discuss our intentions with our major
shareholders and give them the opportunity
to comment.
Service contracts
The Executive Directors have service
contracts that can be terminated on
six months’ notice.
These provide for termination payments
equivalent to the notice period’s basic salary
and contractual benefits.
The Non-Executive Directors have letters
of appointment that can be terminated on
six months’ notice.
We remain focused on aligning
reward with the business’s long-term
sustainability and growth.
Maria Darby-Walker
Independent Non-Executive Director
Personal Group Holdings Plc
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Financial Statements
Overview
Remuneration Committee Report
continued
Share holding of Board Members
At 31 December
2023
At 31 December
2022
Paula Constant
(Chief Executive)
Sarah Mace
(Chief Financial Officer)
12,275
12,071
Andrew Lothian
(Non-Executive Director – Managing Director PGB Sales until December 2020)
37,532
37,532
Martin Bennett
(Independent Non-Executive Chair – Appointed January 2021)
18,070
18,070
Bob Head
(Independent Non-Executive)
Maria Darby-Walker
(Senior Independent Non-Executive)
5,555
Ciaran Astin
(Independent Non-Executive – Appointed May 2022)
Directors
Remuneration
Salary and
fees
2023
£’000
Bonus
2023
£’000
Share-based
gains on
exercise of
options
2023
£’000
Termination
payment
2023
£’000
Pension
contributions
2023
£’000
Total
2023
£’000
Total
2022
£’000
Deborah Frost *
333
15
185
10
543
421
Paula Constant **
146
40
8
194
Sarah Mace
196
86
15
297
202
Andrew Lothian
43
43
41
Bob Head
52
52
50
Maria Darby-Walker
52
52
51
Martin Bennett
103
103
101
Ciaran Astin ***
45
45
28
Liam McGrath ****
-
130
Total
970
141
185
33
1,329
1,024
*
Departed the Board in August 2023.
**
Joined the Board as Chief Executive in August 2023.
***
Joined the Board as a Non-Executive Director in May 2022.
**** Departed the business in August 2022.
Membership of Board and Directors’ interests
The membership of the Board throughout the year
is set out herein.
The interests of the Directors and their families (including
transactions committed to before the year end and shares
held in the PGH employee share ownership plan) in the
shares of the Company as of 31 December 2022 or date
of appointment if later, and 31 December 2023, are shown
in the table to the right.
At 31 December 2023, the mid-market closing share price
was 185.00p per share (31 December 2022: 196.00p).
Directors’ remuneration
The Executive Directors’ remuneration packages currently
include components of a basic salary, annual bonus,
a company car or car allowance if applicable to the role,
Long-Term Incentive Plan (LTIP), non-matched pension
contributions and life cover as appropriate.
The remuneration of the Directors listed by individual
Director is shown to the right.
Remuneration Committee Report
continued
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Financial Statements
Overview
Directors’ share options
Company Share Option Plan
Awards under CSOPs have taken place for a number of
years and have been predominantly allocated to senior
members of staff across the business in line with the
rules on the government scheme. The options have a
requirement to be held for three years prior to exercise
and no performance obligations.
Long-Term Incentive Plan
The Long-Term Incentive Plan introduced in April 2021 was
established in order to reward and incentivise the senior
executives to deliver sustainable growth for the Company
and to create material value for shareholders. The scheme
accommodates performance conditions across market,
financial and ESG measures which support the growth of
the business.
The scheme has made three awards of share options
to date in April 2021, April 2022 and June 2023. A further
scheme is expected to be announced in April 2024.
The performance criteria of the awards are detailed
in Note 20.
In addition to the Executive Directors, members of the
Senior Leadership Team also have awards.
Maria Darby-Walker
Independent Non-Executive Director
18 March 2024
CSOP –
On 31 December 2023 options outstanding were as follows:
Number
of shares
Exercise price
pence per share
Earliest
exercisable
date
Andy Lothian
6,026
498.00
14 February 2017
Sarah Mace
6,122
490.00
28 January 2017
Sarah Mace
13,888
216.00
19 June 2026
LTIP –
On 31 December 2023 options outstanding were as follows:
Number
of shares
Exercise price
pence per share
Earliest
exercisable date
Paula Constant
286,574
5.00
01 January 2026
Sarah Mace (2021 award)
62,438
5.00
01 January 2024
Sarah Mace (2022 award)
84,602
5.00
01 January 2025
Sarah Mace (2023 award)
137,858
5.00
01 January 2026
The options above are subject to the performance criteria of the LTIP.
Personal Group Holdings Plc
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Governance
Financial Statements
Overview
Remuneration Committee Report
continued
Dear Shareholder
I am pleased to present the Nominations
Committee Report for the year ended
31 December 2023. The Committee’s primary
function is to enable focused discussions
around the composition of the Board and the
Group’s requirements around SM&CR.
Objectives
The aims and objectives of the Nominations
Committee are to:
>
Ensure there is a formal, rigorous and
transparent procedure for the appointment
of new Directors to the Board and new
members of the senior management team;
>
Provide oversight of Board composition,
membership and Board and senior /
executive appointments;
>
Lead the process for appointments, ensure
plans are in place for orderly succession to
both the Board and senior management
positions, and oversee the development of
a diverse pipeline for succession;
>
Provide independent oversight of the
Group’s compliance with the Senior
Managers and Certification Regime; and
>
Determine whether employees who are
subject to disciplinary procedures have
breached the Conduct Rules applicable
to their role and whether dismissal is an
appropriate outcome.
The Nominations Committee, assisted by
external executive search agencies as required,
primarily manages appointments to the Board,
but all Board members have the opportunity
to meet shortlisted candidates, ensuring a
wide range of feedback in the appointment
process. All Executive Directors are engaged
on a full-time basis. Non-Executive Directors
have letters of appointment stating their
annual fee, the minimum required time
commitment and confirmation that their
appointment is subject to satisfactory
performance. Their appointment may be
terminated with a maximum of six months’
written notice at any time.
The remuneration of the Chairman and Non-
Executive Directors is determined by the Board
following proposals from the Nominations
Committee, within the limits set out in the
Articles of Association, based on a review of the
level of fees paid by comparator companies.
Non-Executive Directors do not participate in
discussions about their own remuneration.
Activity during the year
The Committee’s Chairman reports formally
to the Board on its proceedings after each
meeting and during the year the Committee
met once, detail of what was reviewed
by the Committee is as follows;
Board succession
We actively manage our Board succession
plan, to ensure that our Board has an
appropriate and diverse range of skills to
enable us to deliver our strategy for the
benefit of all of our stakeholders.
We are a small and cohesive Board, and
take care to ensure that all new members
of our Board are aligned to our culture and
share our values, whatever their skills and
background. Our Board induction process,
undertaken by all new members upon
appointment, is an important way to get our
new Board members up to speed and valued
by our Non-Executive Directors.
We have a formal plan for how Board
membership should develop which aims to
balance continuity of service with a regular
refreshment of skills and experience needed
to deliver our evolving strategy. We regularly
review the balance of skills on the Board as a
whole, taking account of the future needs of
the business, and the knowledge, experience,
length of service and performance of the
Directors. We are satisfied with the plan
which has resulted in the placement of
Paula Constant as Chief Executive replacing
Deborah Frost who retired during the year.
Meetings held
1
Nominations Committee
members
Meeting Attendance
Martin Bennett (Chair)
1/1
Maria Darby-Walker
1/1
Bob Head
1/1
Ciaran Astin
1/1
The Chief Executive, Non-
Independent NEDs, Chief People
Officer and Company Secretary are
normally present at the meetings.
Nominations Committee Report
The objective of the Nominations Committee is to recommend for selection by the full Board,
Director nominees and to ensure compliance with the requirements around Senior Managers and
Certification Regime (SM&CR).
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Strategic Report
Governance
Financial Statements
Overview
Tenure and Re-Election of Directors
The Nominations Committee considers the length of service of Board members at least annually. The tenure of the
Directors is set out below:
Member
Appointment
Board role
Last AGM
renewal
Up for renewal
at 2024 AGM
Martin Bennett
January 2021
Non-Executive Chairman
AGM 2023
Paula Constant
August 2023
Chief Executive
For renewal as
first year
Sarah Mace
October 2020
Chief Financial Officer
AGM 2023
Maria Darby-Walker
June 2019
Senior Non-Executive Director
AGM 2022
For renewal
by rotation
Ciaran Astin
May 2022
Non-Executive Director
AGM 2023
Bob Head
November 2016
Non-Executive Director
AGM 2022
Andy Lothian
July 2017 (previously Executive
Director, appointed NED Jan 2021)
Non-Executive Director
AGM 2021
For renewal
by rotation
Board and Director effectiveness
The Chief Executive receives a formal evaluation of their
performance during the year, which is conducted by the
Chairman. In addition, the Chief Executive discusses with
the Non-Executive Directors the performance of individuals
of the Executive team and any changes that she proposes
to make to this team. Whilst this activity does not take
place formally within the meetings of the Nominations
Committee, it does form part of its work in overseeing
Executive team development and succession process,
and the pipeline of talent available for succession to the
Board. The performance of our Board and the Committees
is evaluated by the Chair. An external Board effectiveness
review was conducted in 2022 with development points
having been worked on subsequently. An internal review
is to be conducted in early 2024.
Diversity
We fully support diversity as an important contribution
to good quality decision making and innovative thinking.
Diversity has many dimensions and we particularly value
diversity of thought, which in turn is assisted by diversity of
background and experience, as well as gender and ethnicity.
We already have on our Board a diversity of gender, skills,
experience, personality, and cognitive approach. Across
the business, teams are diverse with an even split of males
and females in management positions. However, we are
conscious that our senior leadership population does not
currently reflect the broader ethnic mix of our employees
and our customers and we will seek to address this.
We continue to review how we can further broaden our
approach, encouraging diversity and inclusion throughout
the Board and the business.
Culture and values
Preservation of our culture has always been a priority,
which stems from the values instilled by the Board.
Our culture is brought to life through our shared values and
business principles which the Board monitors through Board
reports and agenda items, engagement with employees, and
visits to the Group’s offices.
Our culture and values are an important part of what we
look for in new candidates to join our Board, so that they may
promote and engage with the development of these aspects
throughout the business. It is important that they are aligned
with our values so that they can be role models for all our
employees and stakeholders.
Certification & conduct rules
It is important for the ongoing success of the business that
rigorous certification processes and training and oversight
of compliance with the conduct rules are completed and
monitored by the Committee. We have worked hard to
articulate the conduct rules as part of the wider Group
values and have no tolerance for any breaches of the rules.
Martin Bennett
Independent Non-Executive Chairman
18 March 2024
We remain focused on
aligning reward with the
business’s long-term
sustainability and
growth.
Martin Bennett
Independent Non-Executive Chairman
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Strategic Report
Governance
Financial Statements
Overview
Nominations Committee Report
continued
Directors’ Report
Principal activities
The Group is principally engaged in providing employee
services, including short-term accident and health
insurance, benefits and platform products, pay and reward
consultancy and the provision of salary sacrifice technology
products in the UK.
Results and dividends
A review of the year’s results is given in the Chief Financial
Officer’s Statement (see page 20).
The profit from continuing operations for the year is
£5,334,000 (2022: loss of £6,760,000) before taxation of
£1,010,000 (2022: £493,000). During the year ordinary
dividends of £3,482,000 (2022: £3,310,000) were paid.
Directors
The membership of the Board at the end of the year is
set out in the Remuneration Report on pages 44 to 47.
The Remuneration Committee Report also includes details
of the Directors’ remuneration and interests in the ordinary
shares of the Company. During the year all Directors and
officers were covered by third party indemnity insurance.
Political contributions
Neither the Company nor any of its subsidiaries made any
political donation or incurred any political expenditure
during the year (2022: £nil).
Charitable donations
Donations to charitable organisations amounted
to £100,000 (2022: £100,000).
Principal risks and uncertainties
The principal risks and uncertainties facing the Group,
along with the risk management objectives and policies are
discussed in the Risk and Compliance and Audit Committee
reports and Note 3 of these financial statements.
Capital requirements
See Note 4 of these financial statements.
Corporate governance
The Board of Personal Group Holdings Plc supports the
principles and is committed to achieving high standards
of corporate governance and has adopted the Quoted
Companies Alliance Corporate Governance Code in its
entirety. The Board’s report on the Group’s corporate
governance procedures is set out on pages 36 and 37.
Disclosure of information to auditor
The Directors who held office at the date of approval of
this Directors’ Report confirm that, so far as they are each
aware, there is no relevant audit information of which the
Group’s auditor is unaware; and each Director has taken
all the steps that they ought to have taken as a Director to
make themselves aware of any relevant audit information
and to establish that the Group’s auditor is aware of
that information.
Auditor
EY LLP have expressed willingness to continue in office. In
accordance with section 489 (4) of the Companies Act 2006
a resolution to both formally appoint and reappoint EY LLP
will be proposed at the Annual General Meeting to be held
on Thursday 2 May 2024.
Other information
An indication of likely future developments in the business
and particulars of significant events which have occurred
since the end of the financial year have been included in the
Strategic Report.
BY ORDER OF THE BOARD
Sarah Mace
Chief Financial Officer
18 March 2024
The Directors present their report together with the audited
financial statements for the year ended 31 December 2023.
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Financial Statements
Overview
Statement of Directors’ Responsibilities
In respect of the Strategic Report, Directors’ Report
and the Financial Statements
The Directors are responsible for preparing the Strategic
Report, Directors’ Report and the Group and parent
Company Financial Statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Group and
parent Company financial statements for each financial
year. Under the AIM Rules of the London Stock Exchange
they are required to prepare the Group financial statements
in accordance with International Financial Reporting
Standards as adopted by the UK (UK adopted IFRS) and
applicable law and they have elected to prepare the parent
Company financial statements on the same basis.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group
and parent Company and of their profit or loss for that
period. In preparing each of the Group and parent Company
financial statements, the Directors are required to:
>
Select suitable accounting policies and then apply
them consistently.
>
Make judgements and estimates that are reasonable,
relevant and reliable.
>
State whether they have been prepared in accordance
with UK adopted IFRS.
>
Assess the Group and parent Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern.
>
Use the going concern basis of accounting unless
they either intend to liquidate the Group or the parent
Company or to cease operations, or have no realistic
alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
parent Company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They are
responsible for such internal control as they determine is
necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking
such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report and a Directors’
Report that complies with that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The Directors are responsible for preparing the Strategic report, Directors’ report and the Group and
parent company financial statements in accordance with applicable law and regulations.
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Strategic Report
Governance
Financial Statements
Overview
Overview
Strategic Report
Governance
Financial Statements
Independent Auditor’s Report to the Members of Personal Group Holdings Plc
Opinion
In our opinion:
>
Personal Group Holdings plc’s group financial statements and parent company financial
statements (the “financial statements”) give a true and fair view of the state of the
group’s and of the parent company’s affairs as at 31 December 2023 and of the group’s
profit for the year then ended;
>
the group financial statements have been properly prepared in accordance with UK
adopted international accounting standards;
>
the parent company financial statements have been properly prepared in accordance with
UK adopted international accounting standards as applied in accordance with section 408
of the Companies Act; and
>
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements of Personal Group Holdings plc (the ‘parent company’)
and its subsidiaries (the ‘group’) for the year ended 31 December 2023 which comprise:
Group
Parent company
Consolidated balance sheet as at 31
December 2023
Balance sheet as at 31 December 2023
Consolidated income statement for the year
then ended
Statement of changes in equity for the year
then ended
Consolidated statement of changes in equity
for the year then ended
Statement of cash flows for the year
then ended
Consolidated statement of cash flows for the
year then ended
Related notes 1 to 31 to the financial
statements including material accounting
policy information
Related notes 1 to 31 to the financial
statements, including material accounting
policy information
The financial reporting framework that has been applied in their preparation is applicable law
and UK adopted international accounting standards and, as regards to the parent company
financial statements, as applied in accordance with section 408 of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial statements section of our
report. We are independent of the group and parent company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group and parent company’s ability to
continue to adopt the going concern basis of accounting included the following procedures:
>
confirming our understanding of management’s going concern assessment process and
obtained management’s assessment which covers 12 months ending 31 March 2025;
>
obtaining the financial forecasts prepared by the Group and assessed the appropriateness
of assumptions applied in the modelled stress scenarios based on our understanding of the
business and the Group’s historical performance;
>
performing enquiries of management and those charged with governance to identify
risks or events that may impact the Group’s ability to continue as a going concern. We also
reviewed management’s assessment approved by the Board, minutes of meetings of the
Board and its committees, and made enquiries as to the impact of market conditions on the
business; and
>
assessing the appropriateness of the going concern disclosures by comparing the
consistency with management’s assessment and for compliance with the relevant
reporting requirements.
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Strategic Report
Overview
Governance
Financial Statements
Independent Auditor’s Report
continued
Based on management’s assessment, we have observed that the Group is able to continue
to have surplus cash and solvency above the solvency requirements within its two
regulated entities in a number of extreme downside scenarios and the Group will be able
to continue to service customers and meet its commitments in the current environment.
Based on the work we have performed, we have not identified any material uncertainties relating
to events or conditions that, individually or collectively, may cast significant doubt on the group
and parent company’s ability to continue as a going concern for a period ending 31 March 2025.
Our responsibilities and the responsibilities of the directors with respect to going concern
are described in the relevant sections of this report. However, because not all future events
or conditions can be predicted, this statement is not a guarantee as to the group’s ability to
continue as a going concern.
Overview of our audit approach
Audit scope
>
We performed an audit of the complete financial information of 8 components
and audit procedures on specific balances for a further one components.
Full scope audit
>
UK core insurance (Personal Assurance plc)
>
Guernsey core insurance (Personal Assurance (Guernsey) Limited)
>
IT salary sacrifice (PG Let’s Connect IT Solutions Limited)
>
Software as a service (Personal Management Solutions Limited)
>
Pay and reward (Innecto People Consulting Limited)
>
Intermediate holding company (Personal Group Limited)
>
Others (Berkeley Morgan Limited and Personal Assurance Services Limited)
Specific scope audit
>
Pay and reward (Quintige Consulting Group Limited)
>
The 9 components where we performed full or specific audit procedures
accounted for 98% of Group profit before tax, 96% of Group revenue and
99% of Group total assets.
Key audit
matters
>
Valuation of Innecto and QCG (Pay and Reward) goodwill
>
Transition to IFRS 17
Materiality
>
Overall group materiality of £266,700 which represents 5% of Group profit
before tax.
An overview of the scope of the parent company and group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance
materiality determine our audit scope for each company within the Group. Taken together,
this enables us to form an opinion on the consolidated financial statements. We take into
account size, risk profile, the organisation of the group and effectiveness of group wide
controls, the potential impact of climate change, changes in the business environment and
other factors such as recent Internal audit results when assessing the level of work to be
performed at each company.
In assessing the risk of material misstatement to the Group financial statements, and to
ensure we had adequate quantitative coverage of significant accounts in the financial
statements, of the reporting components of the Group, we selected nine entities, which
represent the principal business units within the Group.
We performed an audit of the complete financial information of eight components
(“full scope components”) which were selected based on their size or risk characteristics.
For the remaining component (“specific scope component”), we performed audit procedures
on specific accounts within that component that we considered had the potential for the
greatest impact on the significant accounts in the financial statements either because of the
size of these accounts or their risk profile.
The reporting components where we performed audit procedures accounted for 98%
(2022: 98%) of the Group’s Profit before tax, 96% (2022: 97%) of the Group’s Revenue and
99% (2022: 99%) of the Group’s Total assets. For the current year, the full scope components
contributed 98% (2022: 91%) of the Group’s Profit before tax, 95% (2022: 93%) of the Group’s
Revenue and 97% (2022: 97%) of the Group’s Total assets. The specific scope component
contributed 0% (2022: 7%) of the Group’s Profit before tax, 1% (2022: 4%) of the Group’s
Revenue and 2% (2022: 2%) of the Group’s Total assets. The audit scope of these components
may not have included testing of all significant accounts of the component but will have
contributed to the coverage of significant accounts tested for the Group.
Of the remaining components that together represent 2% of the Group’s Profit before tax,
we performed other procedures, including analytical review to respond to any potential risks
of material misstatement to the Group financial statements.
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Strategic Report
Overview
Governance
Financial Statements
Independent Auditor’s Report
continued
The charts below illustrate the coverage obtained from the work performed
by our audit teams.
Profit before tax
98% Full scope components
0% Specific scope components
2% Other procedures
Total assets
97% Full scope components
2% Specific scope components
1% Other procedures
Revenue
95% Full scope components
1% Specific scope components
4% Other procedures
Involvement with component teams
In establishing our overall approach to the Group audit, we determined the type of work
that needed to be undertaken at each of the components by us, as the primary audit
engagement team, or by component auditors from other EY global network firms operating
under our instruction. Of the scoped-in components, audit procedures were performed on
seven full scope and one specific scope directly by the primary audit team, whilst for the
other component (Personal Assurance (Guernsey) Limited) audit procedures were performed
by the component audit team, EY Guernsey.
The primary team interacted regularly with the component teams where appropriate during
various stages of the audit, reviewed relevant working papers and were responsible for
the scope and direction of the audit process. This, together with the additional procedures
performed at Group level, gave us appropriate evidence for our opinion on the Group
financial statements.
Climate change
Stakeholders are increasingly interested in how climate change will impact the Group.
The Group has determined that the most significant future impacts from climate change
on its operations will be from physical and transition risks of climate change. These are
explained on page 29 in the Task Force for Climate related Financial Disclosures. All of
these procedures form part of the “Other information,” rather than the audited financial
statements. Our procedures on these unaudited disclosures therefore consisted solely
of considering whether they are materially inconsistent with the financial statements or
our knowledge obtained in the course of the audit or otherwise appear to be materially
misstated, in line with our responsibilities on “Other Information”.
In planning and performing our audit we assessed the potential impacts of climate change
on the Group’s business and any consequential material impact on its financial statements.
The Group has explained in the Basis of preparation note that they have concluded that
the physical and transition risks of climate change do not have a material impact on the
recognition and measurement of the assets and liabilities in these financial statements.
This is because the assets are reported at fair value under UK adopted international
accounting standards.
Our audit effort in considering climate change was focused on challenging management’s
risk assessment of the impact of physical and transition risks and the resulting conclusion
that there was no material impact from climate change and the adequacy of the Group’s
disclosures on page 70 of the financial statements which explain the rationale.
Personal Group Holdings Plc
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54
Overview
Strategic Report
Governance
Financial Statements
Independent Auditor’s Report
continued
Climate change
continued
We also challenged the Directors’ considerations of climate change risks in their assessment
of going concern and viability and associated disclosures.
Based on our work we have not identified the impact of climate change on the financial
statements to be a key audit matter or to impact a key audit matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period and include the
most significant assessed risks of material misstatement (whether or not due to fraud) that
we identified. These matters included those which had the greatest effect on: the overall
audit strategy, the allocation of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and we do not provide a separate opinion
on these matters.
Risk
Our response to the risk
Key observations
communicated to the
Audit Committee
Valuation of Innecto and QCG
(Pay and Reward) goodwill (2023:
£2.68m, 2022: £2.68m)
Innecto was acquired by PGH
in 2019, and QCG in 2022. Both
businesses are now treated as one
CGU due to the commonality of
their business models and cash
flows, as well as organisational
changes put in place at the end of
2023 which merged the team into
one combined consultancy unit.
As at 31 December 2023 we noted
that the value of the Pay and
Reward goodwill was sensitive
to the discount rate and the
short-term growth rates of digital
sales. The forecasted cash flows
are dependent on the continued
projected growth from digital
and consultancy income. Current
2024 forecasts show a more
positive outlook for the CGU, but
due to economic uncertainty and
inflationary pressures this may
impact the CGU’s ability to generate
new business and maintain its
cost base, which in turn leads to
uncertainty around future cash
flows and a heightened sensitivity
to the applied discount rate.
The identified key assumptions
involve significant judgement
about future events for which
small changes can result in a
material impact to the resultant
valuation and therefore leads
to a greater risk of material
misstatement.
The risk has remained unchanged
from prior year.
Refer to Accounting policies (page
73); and Note 13 of the Consolidated
Financial Statements (pages 85-86)
To obtain sufficient and appropriate
evidence to conclude on the valuation of
goodwill at the year end, we performed the
following procedures:
>
Examined and assessed the
appropriateness of management’s
impairment model, including an
identification of the cash generating unit
(“CGU’) and attributable cashflows, an
assessment of discounted cash flows,
and understanding of the significant
assumptions used in the impairment test
for the identified CGU;
>
Considered the increased uncertainty in
the underlying forecasts and challenged
the future cash flow projections of the
CGU, including the appropriateness of the
applied short-term and long-term growth
rates and estimated conversion rates;
>
Assessed the appropriateness of the
identified CGU and attributed cash flows;
>
Challenged the future cash flow
projections of Innecto and QCG to
ensure pipeline business and conversion
rates included in the projections are
appropriate by comparing to prior year
accuracy of forecasting and applying
sensitivity analysis;
>
Engaged our valuation specialists to assess
methodologies and assumptions used in
the analysis including the reasonableness
of the discount rate by considering
Innecto’s and QCG’s specific circumstances
as well as comparable companies;
>
Performed sensitivity analysis to assess
the impact of certain key variables on
levels of headroom, including discount
rate and growth assumptions; and
>
Considered whether the applied
accounting treatment is in compliance
with IFRS and the Group’s accounting
policy, and the Group disclosures are in line
with the required reporting framework.
Based on our work
we are satisfied that
the carrying value of
Goodwill in relation
to the acquisition of
Pay Reward is not
materially misstated.
However, there is
inherent uncertainty
within the forecasted
cash flows used in the
impairment model due
to the expected growth
in Pay and Reward CGU
(disclosed in Note 13 of
the financial statements).
These uncertainties
could have a significant
adverse impact on the
future cashflows of the
Pay and Reward CGU
and may affect the
future carrying value
of the goodwill.
We have reviewed the
related disclosures and
concluded that these
appropriately reflect the
uncertainty associated
with the future cash
flows of the Pay and
Reward CGU, as well
as the sensitivities and
key assumptions.
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55
Overview
Strategic Report
Governance
Financial Statements
Independent Auditor’s Report
continued
Risk
Our response to the risk
Key observations
communicated to the
Audit Committee
Transition to IFRS 17
Refer to the IFRS 17 transition
disclosures included in Note 23
of the Consolidated Financial
Statements (pages 94 and 97)
The transition to IFRS 17, the new
insurance accounting standard,
effective for annual reporting
periods beginning on or after
1 January 2023, has resulted in
change to the reporting processes
and to the consolidated financial
statements. This transition,
which includes a number of
key judgements, has required
substantial focus during our audit,
however these areas are not
considered to be significant risks.
We have focused on a number of
transition areas, with the following
being the areas most likely to
result in a material mistatement:
Methodology and implementation
– The risk of management’s
methodology and implementation
not being in compliance with the
requirements of the standard.
Financial statement disclosures –
The risk of disclosures in relation
to the application of IFRS 17 being
insufficient or inappropriate.
>
in line with the positions taken.
This is a new risk in 2023.
To obtain sufficient audit evidence to
conclude on the appropriateness of the
initial application of the new IFRS 17
accounting standard, we have performed
the following procedures:
In conjunction with our actuaries, we
obtained and challenged management’s
methodology papers for compliance
with the IFRS 17 accounting standard and
subsequently assessed management’s
implementation of their methodology.
Tested the IFRS 4 to IFRS 17 bridging of
Shareholders’ equity and result after tax.
Tested management’s IFRS 17 disclosures
in the consolidated financial statements
in relation to transition and restated
comparative periods.
Through the procedures
performed, we
have determined
that management
have appropriately
implemented IFRS 17
within their financial
reporting and this is
appropriately reflected
within the consolidated
financial statements in
all material respects.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the
effect of identified misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate,
could reasonably be expected to influence the economic decisions of the users of the
financial statements. Materiality provides a basis for determining the nature and extent
of our audit procedures.
We determined materiality for the Group to be £266,700 (2022: £195,050), which is 5%
(2022: 5%) of Group’s Profit before tax. We believe that Group Profit before tax is the
appropriate base since the Group is profit-oriented and it is the focus of the users of the
financial statements.
We determined materiality for the Parent Company to be £258,940 (2022: £252,832),
which is 1% (2022: 1%) of the Parent Company equity. We have used the capital based
measure for determining materiality due to the Parent Company being a holding company.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an
amount to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall
control environment, our judgement was that performance materiality was 75% (2022: 75%)
of our planning materiality, namely £200,025 (2022: £146,288). We have set performance
materiality at this percentage as we have not identified any significant errors in the prior
year audits.
Audit work at component locations for the purpose of obtaining audit coverage over
significant financial statement accounts is undertaken based on a percentage of total
performance materiality. The performance materiality set for each component is based on
the relative scale and risk of the component to the Group as a whole and our assessment of
the risk of misstatement at that component. In the current year, the range of performance
materiality allocated to components was £30,000 to £200,025 (2022: £21,000 to £146,288).
Personal Group Holdings Plc
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Strategic Report
Governance
Financial Statements
Independent Auditor’s Report
continued
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit
differences in excess of £13,335 (2022: £9,753), which is set at 5% of planning materiality,
as well as differences below that threshold that, in our view, warranted reporting on
qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures
of materiality discussed above and in light of other relevant qualitative considerations
in forming our opinion.
Other information
The other information comprises the information included in the annual report set out
on pages 01 to 51, other than the financial statements and our auditor’s report thereon.
The directors are responsible for the other information within the annual report.
Our opinion on the financial statements does not cover the other information and, except
to the extent otherwise explicitly stated in this report, we do not express any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies
Act 2006
In our opinion, the part of the Directors’ remuneration report to be audited has been
properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
>
the information given in the strategic report and the directors’ report for the financial
year for which the financial statements are prepared is consistent with the financial
statements; and
>
the strategic report and directors’ report have been prepared in accordance with
applicable legal requirements.
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Strategic Report
Governance
Financial Statements
Independent Auditor’s Report
continued
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company
and its environment obtained in the course of the audit, we have not identified material
misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
>
adequate accounting records have not been kept by the parent company, or returns
adequate for our audit have not been received from branches not visited by us; or
>
the parent company financial statements are not in agreement with the accounting
records and returns; or
>
certain disclosures of directors’ remuneration specified by law are not made; or
>
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 51,
the directors are responsible for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group
and parent company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis
of these financial statements.
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Strategic Report
Governance
Financial Statements
Independent Auditor’s Report
continued
Explanation as to what extent the audit was considered
capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect
irregularities, including fraud. The risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional misrepresentations,
or through collusion. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with
both those charged with governance of the company and management.
>
We obtained an understanding of the legal and regulatory frameworks that are applicable
to We obtained an understanding of the legal and regulatory frameworks that are
applicable to the group and determined that the direct laws and regulations related to
elements of Company law and tax legislation, and the financial reporting framework.
Our considerations of other laws and regulations that may have a material effect on the
financial statements included permissions and supervisory requirements of the Prudential
Regulation Authority (‘PRA’), the Financial Conduct Authority (‘FCA’) and the Guernsey
Financial Services Commission (‘GFSC’).
>
We understood how the Company is complying with those frameworks by making
enquiries of management, and through discussions with those charged with governance.
We also reviewed correspondence between the Company and the regulatory bodies;
reviewed minutes of the Board and the Risk and Compliance Committee; and gained an
understanding of the Company’s approach to governance, demonstrated by the Board’s
approval of the Company’s governance framework.
>
We assessed the susceptibility of the Group’s financial statements to material
misstatement, including how fraud might occur by considering the controls that the
Company has established to address risks identified by the entity, or that otherwise seek
to prevent, deter or detect fraud. Where fraud risk, including the risk of management
override, was considered to be higher, we performed audit procedures to address each
identified risk. These procedures included:
>
Reviewing estimates for evidence of management bias. Supported by our valuation
specialists, we assessed if there were any indicators of management bias in the
valuation of goodwill.
>
Testing the appropriateness of the revenue transactions for the year ended
31 December 2023 including revenue earned around the cut-off date.
>
Testing the appropriateness of journal entries recorded in the general ledger, with a
focus on manual journals and evaluating the business rationale for significant and/or
unusual transactions.
>
We designed our audit procedures to identify non-compliance with both direct and other
laws and regulations impacting the Company. Our procedures involved: making enquiry
of those charged with governance and senior management for their awareness of any non-
compliance of laws or regulations, inquiring about the policies that have been established
to prevent non-compliance with laws and regulations by officers and employees,
inquiring about the company’s methods of enforcing and monitoring compliance with
such policies, inspecting significant correspondence with the FCA and the PRA.
The Group operates in the insurance industry which is a highly regulated environment.
As such the Senior Statutory Auditor considered the experience and expertise of the
engagement team to ensure that the team had the appropriate competence and
capabilities, which included the use of specialists where appropriate. A further description
of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter
3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we
might state to the company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinion we have formed.
Robert Bruce (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
18 March 2024
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59
Overview
Strategic Report
Governance
Financial Statements
Consolidated Income Statement
for the year ended 31 December 2023
Note
2023
£’000
Restated*
2022
£’000
Insurance revenue
28,708
25,406
Employee benefits and services
20,012
24,014
Other income
139
237
Investment income
6
807
145
Revenue
5
49,666
49,802
Insurance service expenses
7
(14,593)
(13,674)
Net expenses from reinsurance contracts held
7
(135)
(84)
Employee benefits and services expenses
5
(18,077)
(22,602)
Other expenses
(94)
(33)
Group administration expenses
(11,266)
(8,973)
Share based payment expenses
(169)
(291)
Unrealised gains/(losses) on equity investments
181
(210)
Charitable donations
(100)
(100)
Expenses
(44,253)
(45,967)
Results of operating activities
7
5,413
3,835
Finance costs
6
(79)
(20)
Goodwill impairment
13
(10,575)
Profit/(loss) before tax
5,334
(6,760)
Taxation
10
(1,010)
(493)
Profit/(loss) for the year
4,324
(7,253)
The profit for the year is attributable to equity holders of Personal Group Holdings Plc
Earnings per share
Pence
Pence
Basic
11
13.8
(23.2)
Diluted
11
13.5
(23.2)
There is no other comprehensive income
for the year and, as a result, no statement of
comprehensive income has been produced.
* With the transition to IFRS 17, certain
comparative amounts have been re-stated
as if the standard had always been in effect.
See Note 23 for full details. In addition,
a change to the presentation of voucher
income has been discussed in Note 2.22.
Neither restatement has impacted the
overall result for the prior year.
The accompanying policies and
notes form an integral part of these
financial statements.
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Overview
Strategic Report
Governance
Financial Statements
Consolidated Balance Sheet
at 31 December 2023
Note
2023
£’000
Restated
2022
£’000
Restated
2021
£’000
ASSETS
Non-current assets
Goodwill
13
2,684
2,684
12,696
Intangible assets
14
3,654
2,384
1,637
Property, plant and equipment
15
5,020
4,639
5,033
11,358
9,707
19,366
Current assets
Financial assets
16
4,035
3,031
2,595
Trade and other receivables
18
16,015
13,498
12,369
Reinsurance contracts held
(2)
42
108
Inventories
17
272
699
898
Cash and cash equivalents
19
17,497
16,958
20,291
Current tax assets
12
229
310
37,829
34,457
36,571
Total assets
49,187
44,164
55,937
The accompanying accounting policies
and notes form an integral part of these
financial statements.
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Overview
Strategic Report
Governance
Financial Statements
Consolidated Balance Sheet
at 31 December 2023 continued
Note
2023
£’000
Restated
2022
£’000
Restated
2021
£’000
EQUITY
Equity attributable to equity holders of
Personal Group Holdings Plc
Share capital
20
1,562
1,562
1,561
Share premium
20
1,134
1,134
1,134
Capital redemption reserve
24
24
24
Share based payments reserve
513
367
158
Other reserve
(36)
(55)
(32)
Profit and loss reserve
28,798
27,946
38,436
Total equity
31,995
30,978
41,281
LIABILITIES
Non-current liabilities
Deferred tax liabilities
21
790
681
478
Trade and other payables
22
567
130
567
Current liabilities
Trade and other payables
22
15,100
11,293
12,189
Insurance contract liabilities
24
735
1,082
1,422
15,835
12,375
13,611
Total liabilities
17,192
13,186
14,656
Total equity and liabilities
49,187
44,164
55,937
The financial statements were approved by the Board on 18 March 2024.
S Mace
P Brown (née Constant)
Chief Financial Officer
Chief Executive
Company number: 3194991
The accompanying accounting policies
and notes form an integral part of these
financial statements.
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Overview
Strategic Report
Governance
Financial Statements
Company Balance Sheet
at 31 December 2023
2023
2022
Note
£’000
£’000
ASSETS
Non-current assets
Investment in subsidiary undertakings
25
25,620
25,474
25,620
25,474
Current assets
Trade and other receivables
18
803
322
Cash and cash equivalents
19
50
237
853
559
Total assets
26,473
26,033
EQUITY
Equity attributable to equity holders of Personal Group Holdings Plc
Share capital
20
1,562
1,562
Share premium
20
1,134
1,134
Capital redemption reserve
24
24
Other reserve
(36)
(55)
Share based payment reserve
575
429
Profit and loss reserve
22,635
22,217
Total equity
25,894
25,311
LIABILITIES
Current liabilities
Trade and other payables
22
579
722
Total liabilities
579
722
Total equity and liabilities
26,473
26,033
The parent Company has taken advantage of section 408 of the Companies Act 2006 and has not included its own profit and loss account
in these financial statements. The parent Company’s profit for the year was £3,913,000 (2022: £3,363,000).
The financial statements were approved by the Board on 18 March 2024.
S Mace
P Brown (née Constant)
Chief Financial Officer
Chief Executive
Company number: 3194991
The accompanying accounting policies
and notes form an integral part of these
financial statements.
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Overview
Strategic Report
Governance
Financial Statements
Consolidated Statement of Changes in Equity
for the year ended 31 December 2023
Equity attributable to equity holders of Personal Group Holdings Plc
Share capital
£’000
Capital
redemption
reserve
£’000
Share premium
£’000
Share based
payment reserve
£’000
Other reserve
£’000
Profit and loss
reserve
£’000
Total
equity
£’000
Balance as at 1 January 2023
1,562
24
1,134
367
(55)
27,946
30,978
Dividends
(3,482)
(3,482)
Employee share-based compensation
146
23
169
Proceeds of SIP* share sales
22
22
Cost of SIP shares sold
35
(35)
Cost of SIP shares purchased
(16)
(16)
Transactions with owners
146
19
(3,472)
(3,307)
Profit for the year
4,324
4,324
Balance as at 31 December 2023
1,562
24
1,134
513
(36)
28,798
31,995
Balance as at 1 January 2022
1,561
24
1,134
158
(32)
38,436
41,281
Dividends paid
(3,310)
(3,310)
Employee share-based compensation
271
20
291
Proceeds of SIP* share sales
11
11
Cost of SIP shares sold
20
(20)
Cost of SIP shares purchased
(43)
(43)
LTIP** Options Exercised
1
(62)
62
1
Transactions with owners
1
209
(23)
(3,237)
(3,050)
Profit for the year
(7,253)
(7,253)
Balance as at 31 December 2022
1,562
24
1,134
367
(55)
27,946
30,978
*
PG Share Ownership Plan (SIP)
** Long-Term Incentive Plan (LTIP)
The accompanying accounting policies and notes form an integral part of these financial statements.
Personal Group Holdings Plc
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Overview
Strategic Report
Governance
Financial Statements
Company Statement of Changes in Equity
for the year ended 31 December 2023
Equity attributable to equity holders of Personal Group Holdings Plc
Capital
redemption
Share based
Profit and loss
Total
Share capital
reserve
Share premium
payment reserve
Other reserve
reserve
equity
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Balance as at 1 January 2023
1,562
24
1,134
429
(55)
22,217
25,311
Dividends paid
(3,482)
(3,482)
Employee share-based compensation
146
146
Proceeds of SIP share sales
22
22
Cost of SIP shares sold
35
(35)
Cost of SIP shares purchased
(16)
(16)
Transactions with owners
146
19
(3,495)
(3,330)
Profit for the year
3,913
3,913
Balance as at 31 December 2023
1,562
24
1,134
575
(36)
22,635
25,894
Balance as at 1 January 2022
1,561
24
1,134
158
(32)
22,172
25,017
Dividends paid
(3,310)
(3,310)
Employee share-based compensation
271
271
Proceeds of SIP* share sales
11
11
Cost of SIP shares sold
20
(20)
Cost of SIP shares purchased
(43)
(43)
Shares issued in the year
1
1
Transactions with owners
1
271
(23)
(3,319)
(3,070)
Profit for the year
3,364
3,364
Balance as at 31 December 2022
1,562
24
1,134
429
(55)
22,217
25,311
*
PG Share Ownership Plan (SIP)
** Long-Term Incentive Plan (LTIP)
The accompanying accounting policies and notes form an integral part of these financial statements.
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65
Overview
Strategic Report
Governance
Financial Statements
Consolidated Cash Flow Statement
Note
2023
£’000
Restated
2022
£’000
Net cash from operating activities (see next page)
6,678
3,240
Investing activities
Additions to property, plant and equipment
15
(157)
(332)
Additions to intangible assets
14
(2,040)
(1,196)
Proceeds from disposal of property, plant and equipment
78
39
Proceeds from disposal of financial assets
871
Purchase of financial assets
(823)
(1,517)
Interest received
6
807
145
Acquisition of QCG Limited
(812)
Net cash from investing activities
(2,135)
(2,802)
Financing activities
Proceeds from issue of shares
1
Interest paid
(1)
Purchase of own shares by the SIP*
(16)
(54)
Proceeds from disposal of own shares by the SIP*
25
21
Payment of lease liabilities
29
(530)
(429)
Dividends paid
12
(3,482)
(3,310)
Net cash used in financing activities
(4,004)
(3,771)
Net change in cash and cash equivalents
539
(3,333)
Cash and cash equivalents, beginning of year
19
16,958
20,291
Cash and cash equivalents, end of year
19
17,497
16,958
*
PG Share Ownership Plan (SIP)
The accompanying accounting policies
and notes form an integral part of these
financial statements.
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Overview
Strategic Report
Governance
Financial Statements
Consolidated Cash Flow Statement
continued
Note
2023
£’000
Restated*
2022
£’000
Operating activities
(Loss)/Profit after tax
4,324
(7,253)
Adjustments for
Depreciation
15
1,135
1,052
Amortisation of intangible assets
14
770
786
Goodwill impairment
13
10,575
Profit on disposal of property, plant and equipment
8
12
Realised and unrealised investment (gains)/losses
(181)
210
Interest received
(807)
(145)
Interest charge
79
20
Share-based payment expenses
169
291
Taxation expense recognised in income statement
10
1,010
493
Changes in working capital
Trade and other receivables
(2,569)
(1,637)
Trade and other payables
3,247
(1,486)
Movement in insurance liabilities
(275)
476
Inventories
454
172
Taxes paid
(686)
(326)
Net cash from operating activities
6,678
3,240
* With the transition to IFRS 17, certain
comparative amounts have been
re-stated as if the standard had always
been in effect.
The accompanying accounting policies
and notes form an integral part of these
financial statements.
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Consolidated Cash Flow Statement
continued
Overview
Strategic Report
Governance
Financial Statements
Company Cash Flow Statement
2023
2022
Note
£’000
£’000
Net cash from operating activities (see below)
(1,012)
10
Investing activities
Dividends received
4,300
3,450
Net cash used in investing activities
4,300
3,450
Financing activities
Proceeds from issue of shares
1
Purchase of own shares by the SIP*
(16)
(54)
Proceeds from disposal of own shares by the SIP*
25
21
Dividends paid
12
(3,482)
(3,310)
Net cash used in financing activities
(3,473)
(3,342)
Net change in cash and cash equivalents
(187)
118
Cash and cash equivalents, beginning of year
19
237
119
Cash and cash equivalents, end of year
19
50
237
Operating activities
Profit after tax
3,913
3,364
Changes in working capital
Trade and other receivables
(482)
(129)
Trade and other payables
(143)
225
Dividends received
(4,300)
(3,450)
Net cash from operating activities
(1,012)
10
*
PG Share Ownership Plan (SIP)
The parent Company has cash and cash equivalents at 31 December 2023 including £3,000 (2022: £168,000) of Company’s own cash and
£47,000 (2022: £69,000) relating to the purchase and sale of SIP shares by the employee benefit trust.
The accompanying accounting policies
and notes form an integral part of these
financial statements.
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Strategic Report
Governance
Notes to the Financial Statements
Financial Statements
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69
1 General information
The principal activities of Personal Group Holdings Plc (“the Company”) and subsidiaries
(together “the Group”) include providing employee services and transacting short-term
accident and health insurance in the UK.
The Company is a limited liability company incorporated and domiciled in England.
The address of its registered office is John Ormond House, 899 Silbury Boulevard,
Milton Keynes, MK9 3XL.
The Company is listed on the Alternative Investment Market of the London Stock Exchange.
These financial statements have been approved for issue by the Board of Directors
on 18 March 2024.
2 Accounting policies
These financial statements of Personal Group Holdings Plc are for the year ended
31 December 2023. The consolidated Group and individual Company financial statements
are prepared in accordance with UK endorsed IFRS in conformity with the requirements
of Companies Act 2006.
No individual profit and loss account is prepared for Personal Group Holidings Plc
as provided by Section 408 of the Companies Act 2006.
Changes in accounting policies and new standards
Personal Group has initially applied IFRS 17 including any consequential amendments to
other standards, for account periods ending after 1 January 2023. There are no other new
or amended IFRS standards, that have a material effect, that have become effective during
the period ended 31 December 2023.
IFRS 17 has had a significant impact on accounting for insurance contracts. As a result,
Personal Group has re-stated certain comparative amounts particularly in the presentation
of its Income Statement. Personal Group’s updated accounting policies for reinsurance
contracts are set out below. Disclosures relating to the transition to IFRS 17 have been
set out in Note 23.
Insurance contracts
IFRS 17 sets out the classification, measurement and presentation and disclosure
requirements for insurance contracts. It requires insurance contracts to be measured
using current estimates and assumptions that reflect the timing of cash flows and
recognition of profits as insurance services are delivered. The standard provides
two main measurement models which are the General Measurement Model (“GMM”)
and the Premium Allocation Approach (“PAA”).
The PAA simplifies the measurement of insurance contracts for remaining coverage
in comparison to the GMM. The PAA is very similar to Personal Group’s previous
accounting policies under IFRS 4 for calculating revenue, however there are some
presentation changes.
The GMM is used for the measurement of the liability for incurred claims.
PAA eligibility
Under IFRS 17, Personal Group’s insurance contracts issued are all eligible to be measured
by applying the PAA, due to meeting the following criteria:
>
Insurance contracts with coverage period of one year or less are automatically eligible.
This covers all hospital, convalescence, and death benefit insurance contracts.
>
Modelling of contracts with a coverage period greater than one year (employee default
policies) produces a measurement for the group of reinsurance contracts that does not
differ materially from that which would be produced applying the GMM.
Level of aggregation
Personal Group manages all insurance contracts as one portfolio within the insurance
operating segment as they are subject to similar risks.
Onerous contracts
Under the PAA, it is assumed there are no contracts in the portfolio that are onerous at initial
recognition, unless there are facts and circumstances that may indicate otherwise. Given
the short-tailed nature of policies issued be Personal Group, management do not consider
there to be any material circumstance under which policies in issue would be onerous.
Modification and derecognition
Personal Group derecognises insurance contracts when the rights and obligations relating
to the contract are extinguished (meaning discharged, cancelled, or expired) or the contract
is modified such that the modification results in a change in the measurement model or the
applicable standard for measuring the contract.
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
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2 Accounting policies
continued
Contract boundaries
The measurement of insurance contracts includes all future cash flows expected to arise
within the boundary of each contract. Cash flows are within the boundary of an insurance
contract if they arise from substantive rights and obligations that exist during the reporting
period in which Personal Group can compel the policyholder to pay premiums or in which
it has a substantive obligation to provide the policyholder with services.
Personal Group assesses the contract boundary at initial recognition and at each
subsequent reporting date to include the effects of changes in circumstances on the
Group’s substantive rights and obligations. The assessment of the contract boundary,
which defines the future cash flows that are included in the measurement of the contract,
requires judgement and consideration.
Personal Group primarily issues insurance contracts which provide coverage to
policyholders in the event of hospitalisation, convalescence, or death. While the contracts
are typically weekly or monthly in their term length, the contract boundary is assessed with
consideration of the delayed timing around claims of this nature and the timing of expected
future claims payments with reference to the covered loss event.
Measurement – Liability for remaining coverage
On initial recognition of insurance contract, the carrying amount of the liability for
remaining coverage is measured as the premiums received on initial recognition, if any,
minus any reinsurance acquisition expense cash flows allocated to the contracts and any
amounts arising from the derecognition of the prepaid reinsurance acquisition expense
cash flows asset. Personal Group has chosen to expense insurance acquisition expense
cash flows as incurred on its contracts as they have coverage of less than one year.
Subsequently, at the end of each reporting period, the liability for remaining coverage is
increased by any additional premiums received in the period and decreased for the amounts
of expected premium cash flows recognised as reinsurance revenue for the services
provided in the period.
Personal Group has elected not to adjust the liability for remaining coverage for the time
value of money as its insurance contracts do not contain a significant financing component.
2.1 Basis of preparation
The functional and presentational currency of the Group is Sterling. These statements
and the prior year comparatives have been presented to the nearest thousand, unless
otherwise stated.
In preparing these consolidated financial statements, management has made judgements,
estimates and assumptions that affect the application of the Group’s accounting policies
and the reported amount of assets, liabilities, income and expenses. Actual results may
differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to estimates are recognised prospectively.
Climate Risk
In preparing these financial statements the Directors have considered the impact of the
physical and transition risks of climate change, but have concluded that it does not have a
material impact on the recognition and measurement of the assets and liabilities in these
financial statements as at 31 December 2023. This is because the assets are reported at
fair value under UK endorsed IFRS. Market prices will include the current expectations of
the impact of climate change on these investments. Insurance liabilities are accrued based
on past insurable events so will not be impacted by any future impact of climate change.
However, we recognise that government and societal responses to climate change risks are
still developing and the future impact cannot be predicted. Future valuations of assets may
therefore differ as the market responds to these changing impacts or assesses the impact
of current requirements differently and the frequency/magnitude of future insurable
events linked to the effect of climate risks could change.
Judgements
Information about judgements made in applying accounting policies that have the most
significant effects on the amounts recognised in the consolidated financial statements
is included in the following notes:
>
Agent vs principal (Note 2.22) – whether the sale of discounted vouchers should
be treated as a principal or agency transaction.
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk
of resulting in a material adjustment to the carrying amounts of assets and liabilities within
the year ending 31 December 2023 is included in the following notes:
>
Goodwill valuation (Note 13) – key assumptions underlying recoverable amounts.
>
Establishing the value of insurance contract liabilities (Note 24) – key assumptions
regarding the provisions for claims.
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2.1 Basis of preparation
continued
Going concern
The financial statements are prepared on a going concern basis. In considering going
concern, the Directors have reviewed the Group’s and Company’s future cash requirements,
earnings projections and capital projections over the next 12 months ending 18 March 2025.
The Directors believe that projections have been prepared on a prudent basis and have also
considered the impact of a range of potential changes to trading performance over the next
12 months ending 18 March 2025, including the impacts of climate risk discussed above.
Having prepared and considered these stress scenarios the Directors have concluded that
the Group and Company will be able to operate without requiring any external funding
and therefore believe it is appropriate to prepare the financial statements of the Group
and Company on a going concern basis. This is supported by the Group’s, and Company’s,
liquidity position at the year end.
2.2 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity. In assessing control,
the Group takes into consideration potential voting rights that are currently exercisable.
The acquisition date is the date on which control is transferred to the acquirer. The financial
statements of subsidiaries are included in the consolidated financial statements from the
date that control commences until the date that control ceases.
Transactions eliminated on consolidation
Intra-Group balances and transactions, and any unrealised income and expenses arising
from these transactions, are eliminated on consolidation.
2.3 Goodwill and acquired intangibles
Goodwill representing the excess of the cost of acquisition over the fair value of the
Group’s share of the identifiable net assets acquired, is capitalised and reviewed annually
for impairment. Goodwill is carried at cost less accumulated impairment losses. Negative
goodwill is recognised immediately after acquisition in the income statement.
Intangible assets meeting the relevant recognition criteria are initially measured at cost
and amortised on a systematic basis over their useful lives.
2.4 Revenue
Revenue is measured by reference to the fair value of consideration received or receivable by
the Group for goods supplied and services provided, excluding VAT, IPT and trade discounts.
Whilst IFRS 15 considerations have been noted for the most significant revenue streams
to which it is applicable, the insurance revenue stream is out of scope for IFRS 15.
Insurance Revenue
Insurance income is recognised in the period in which the Group is legally bound through
a contract to provide insurance cover, which is typically a week or a month in length
and renews at the end of each cover period. Insurance revenue represents the expected
premium cash flows net of any deductions that are paid to reinsurance providers,
excluding any investment components.
Insurance revenue is shown before deduction of commission and excludes any sales-based
taxes or duties.
Other insurance related
Commission receivable on the renewal of previously sold financial services are recognised
by the Group as the renewal takes place with the underwriter.
Other Owned Benefits – IT Salary Sacrifice
Income from the provision of salary sacrifice technology products is recognised when the
goods are dispatched.
IFRS 15 – IT salary sacrifice income (Other Owned Benefits)
 
Performance Obligations
Provision of IT goods to employer companies. Goods are acquired
 
by the Group from various suppliers and held as inventory until
 
sold to customers at an agreed price.
Transaction Price
Purchase price varies dependant on product purchased
 
but is clearly indicated.
Allocation of Price
Prices are allocated by product, volumes and values.
Satisfaction of Obligations
Revenue is recognised on dispatch as Group has met its
 
performance obligation as per the contracts in place.
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2.4 Revenue
continued
Platform income
Platform income, including that derived from Hapi, is recognised on a straight-line basis
over the length of the contract.
Where a proportion of this income and costs, credited or charged in the current year,
relate to the provision of services provided in the following year, they are carried forward
as deferred income or costs, calculated on a daily pro-rata basis.
IFRS 15 – Platform income (Benefits Platform)
 
Performance Obligations
Ongoing access to Hapi platform with each relevant month access
 
is provided being considered a separate performance obligation.
Transaction Price
Prices are typically set on a per employee or fixed rate and are
 
agreed with each client individually.
Allocation of Price
Price allocated evenly to each period/performance obligation.
Satisfaction of Obligations
Recognised straight-line over period of agreement of service
 
as the performance obligation is deemed to be met each month
 
as the contract progresses.
Voucher income derives from customers ordering retail vouchers through the Hapi
platform. E-vouchers are fulfilled and made available instantly to the customer while,
for reloadable cards, customers receive these several working days after placing the order.
Income from the sale of reloadable cards and e-vouchers is recognised as orders are fulfilled
by the Group. These transactions the Group acts as agency income. Refer to 2.22 for further
details of agent vs principal assessment.
IFRS 15 – Voucher resale income
 
Performance Obligations
Provision of voucher to individuals/companies.
Transaction Price
Prices are based on each retailer’s discount on purchase
 
into the Group.
Allocation of Price
Whole price allocated to the sole performance obligation.
Satisfaction of Obligations
Recognised on dispatch of voucher as this is the point at which
 
the Group has fulfilled its part of the agreed contract.
The Group receives income from its provision of HR consultancy services to corporate clients.
Consultancy income is recognised in the profit and loss account at the relevant charge out
rates of the consultants and based on the chargeable time spent on each client project.
IFRS 15 – Consultancy income (Pay and Reward)
 
Performance Obligations
Provision of consultancy services, typically based on an agreed
 
number of consultant hours.
Transaction Price
Prices are based on each contractual client agreement,
 
dependant on the level and duration of consultant hours spent.
Allocation of Price
Each chargeable hour will have an agreed price dependant on
 
the level and experience of the consultant.
Satisfaction of Obligations
Each consultant hour charged is considered a separate
 
performance obligation and recognition is recorded periodically
 
(typically monthly) based on chargeable hours in that period.
Other income
Property rental income is recognised on a receivable basis when the right to receive
consideration has been established.
Costs incurred to fulfil a contract
Costs incurred to fulfil a contract under IFRS 15 are recognised as an asset under certain
conditions laid out in IFRS 15.95. The capitalised contract costs are amortised on
a systematic basis that is consistent with the Company’s transfer of the related goods
or services to the customer.
Capitalised contract costs are subject to an impairment assessment at the end of
each reporting period. Impairment losses are recognised in the profit or loss. There are
no contracts in the Group for which these conditions are met and, as such, no assets
have been recognised.
Investment income
Interest income is recognised on an effective interest rate method.
2.5 Reinsurance
Outwards reinsurance premiums are accounted for in the same accounting period as the
insurance revenue for the related direct or inwards business being reinsured.
Amounts recoverable under reinsurance contracts are assessed for impairment at each
balance sheet date. As required, impairment losses are recognised in the income statement
and the carrying amount of assets are impaired so that they do not exceed the expected
net cash inflow for the Group.
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2 Accounting policies
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2.6 Measurement – Liability for incurred claims
The liability for incurred claims represents the estimated ultimate cost of settling all
insurance claims arising from events that have occurred up to the end of the reporting period,
including the operating costs that are expected to be incurred in the course of settling such
claims. The liability for claims is derived from the estimated fulfilment cash flows relating to
expected claims. The fulfilment cash flows incorporate, in an unbiased way, all reasonable and
supportable information available, without undue cost of effort, about the amount, timing
and uncertainty of those future cash flows. They also include an explicit risk adjustment.
Estimates of future cash flows for incurred claims are not discounted on initial recognition
due to the immateriality of the impact of the time value of money as discussed in Note 23.
2.7 Property, plant and equipment and intangible assets
Property, plant and equipment and software intangibles are stated at cost, net of depreciation,
amortisation and any provision for impairment. No depreciation or amortisation is charged
during the period of construction.
Research and development
Expenditure on research activities is recognised in the income statement as an expense
as incurred.
Expenditure on development activities is capitalised if the product or process is technically
and commercially feasible and the Group intends, and has the technical ability and sufficient
resources to, complete development, future economic benefits are probable and if the
Group can measure reliably the expenditure attributable to the intangible asset during
its development. Development activities involve a plan or design for the production of new
or substantially improved products or processes.
The expenditure capitalised includes the cost of materials, external consultancy costs and
salary costs where a distinct product has been created. Other development expenditure
is recognised in the income statement as an expense as incurred. Capitalised development
expenditure is stated at cost less accumulated amortisation and less accumulated
impairment losses.
Disposal of assets
The gain or loss arising on the disposal of an asset is determined as the difference between
the disposal proceeds and the carrying amount of the asset and is recognised in the
income statement.
Amortisation and depreciation
Amortisation and depreciation are calculated to write down the cost or valuation less estimated
residual value of all intangible assets, and tangible assets other than freehold land excluding
investment properties by equal annual instalments over their estimated economic useful lives.
Residual value is reviewed annually and amended if material.
 
The rates generally applicable are:
 
Freehold properties
50 years
Motor vehicles
3 – 4 years
Computer equipment
2 – 4 years
Furniture, fixtures and fittings
5 – 10 years
Computer software and development
2 – 4 years
Internally generated intangibles
3 – 5 years
Intangible assets
3 – 5 years
Right of Use Assets
Term of Lease
2.8 Leases
Under IFRS 16, with the exception of short-term or low value leases, all operating and
finance leases are accounted for in the balance sheet. On inception of the lease, the
future payments, including any expected end of life costs, are discounted based on the
implicit interest rate in the specific lease. A “Right of Use” asset is created at an equal value
depreciated over the life of the lease which is determined by the contract with any break
clauses being reviewed as to the expected use at the time of inception and at each following
year end. Payments made to the lessor are debited to the balance sheet and the income
statement is charged with monthly depreciation and interest which is included as finance
costs in the accounts.
Low value leases or short life leases of less than one year are expensed directly into the
income statement account on a straight line over the life of the lease.
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2.9 Impairment of non-financial assets
For the purposes of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash-generating units). As a result, some assets
are tested individually for impairment and some are tested at cash-generating unit level.
Goodwill is allocated to those cash-generating units that are expected to benefit from
synergies of the related business combination and represent the lowest level within the
Group at which management monitors the related cash flows.
Goodwill, other individual assets or cash-generating units that include goodwill and those
intangible assets not yet available for use are tested for impairment at least annually.
All other individual assets or cash-generating units are tested for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be
recoverable. See Note 13 for further details on the impairment testing of goodwill.
2.10 Taxation
Current tax is the tax currently payable based on taxable profit for the year.
Deferred income taxes are calculated using the liability method on temporary differences.
Deferred tax is generally provided on the difference between the carrying amounts
of assets and liabilities and their tax bases.
However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial
recognition of an asset or liability unless the related transaction is a business combination
or affects tax or accounting profit.
Deferred tax on temporary differences associated with shares in subsidiaries and joint
ventures is not provided if reversal of these temporary differences can be controlled by
the Group and it is probable that reversal will not occur in the foreseeable future. In addition,
tax losses available to be carried forward as well as other income tax credits to the Group
are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are
recognised to the extent that it is probable that the underlying deductible temporary
differences will be able to be offset against future taxable income. Current and deferred
tax assets and liabilities are calculated at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or substantively enacted at the
balance sheet date.
2.11 Financial assets
Financial assets include; equity investments, bank deposits (as defined below); loans and
other receivables. Financial assets are assigned to the different categories by management
on initial recognition, depending on the purpose for which they were acquired.
A financial asset is measured at amortised cost if it is both: held within a business model
whose objective is to hold assets to collect contractual cash flows; and its contractual
terms give rise to cash flows that are solely payments of principal and interest on the
amount outstanding. For the purposes of this assessment, “principal” is defined as the fair
value of the financial asset on initial recognition, and “interest” is defined as consideration
for the time value of money and for the credit risk associated with the principal amount
outstanding. In assessing whether the contractual cash flows are solely payments of
principal and interest, the Group considers the contractual terms of the instrument,
including any terms which may affect the timing or amount of contractual cash flows.
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Loans and receivables are measured
subsequent to initial recognition at amortised cost using the effective interest method,
less provision for impairment. Any change in their value through impairment or reversal
of impairment is recognised in the income statement.
Fixed interest rate bank deposits with a maturity date of three months or more from the
date of acquisition are classified as financial assets. Equity investments are financial assets
categorised as at fair value through profit and loss and are initially recognised at fair value
on the date acquired and are subsequently re-measured at their fair value. Changes in the
fair value of equity investments are recognised in profit or loss. In assessing impairment
requirements on financial assets, the Group considers the rate of historic losses on similar
assets in conjunction with expected future losses and credit losses as a result of potential
defaults. This will, as mandated by IFRS 9, continue to be reassessed as and when further
information becomes available or when conditions change.
A financial asset is de-recognised only where the contractual rights to the cash flows from the
asset expire or the financial asset is transferred, and that transfer qualifies for de-recognition.
A financial asset is transferred if the contractual rights to receive the cash flows of the asset
have been transferred or the Group retains the contractual rights to receive the cash flows
of the asset but assumes a contractual obligation to pay the cash flows to one or more
recipients. A financial asset that is transferred qualifies for de-recognition if the Group transfers
substantially all the risks and rewards of ownership of the asset, or if the Group neither retains
nor transfers substantially all the risks and rewards of ownership but does transfer control
of that asset.
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2 Accounting policies
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2.11 Financial assets
continued
Impairment of financial assets
The Group assesses on a forward-looking basis, the expected credit losses (ECL) associated
with its debt instrument assets carried at amortised costs. The Group calculates the lifetime
ECL as a practical expedient for short-term receivables. A loss allowance is recognised for
such losses at each reporting date. The Group measures ECL on each balance sheet date
according to a three stage ECL impairment model:
Stage 1 – from initial recognition of the financial asset to the date on which the asset has
experienced a significant increase in credit risk (SICR) relative to its initial recognition,
a loss allowance is equal to the credit loss expected to result from default occurring over
12 months following the reporting date.
Stage 2 – following a significant increase in credit risk relative to the initial recognition of
the financial asset, a loss allowance is recognised equal to the credit losses expected over
the remaining lifetime of the asset. Where an SICR is no longer observed, the instrument
will move back to Stage 1.
Stage 3 – when the financial asset is considered to be credit impaired, a loss allowance is
recognised equal to the credit losses expected over the remaining life of the asset. Interest
and revenue is calculated based on the gross carrying amount of the asset, net of the
loss allowance.
The measurement of the ECL reflects an unbiased and probability-weighted amount
that is determined by evaluating a range of possible outcomes, the time value of money
and reasonable and supportable information that is available without undue cost and
effort at the reporting date about past events, current conditions and forecasts of
future economic conditions.
2.12 Financial liabilities
Financial liabilities are classified as measured at amortised cost or fair value through
profit and loss (FVTPL). A financial liability is classified as at FVTPL if it is classified as
held-for-trading or it is designated as such on initial recognition.
Financial liabilities are subsequently measured at amortised cost using the effective
interest method, with interest related charges recognised as an expense in finance cost
in the income statement. Finance charges, including premiums payable on settlement or
redemption and direct issue costs, are charged to the income statement on an accruals basis
using the effective interest method and are added to the carrying amount of the instrument
to the extent that they are not settled in the period in which they arise.
There are no financial liabilities categorised as at fair value through profit or loss.
A financial liability is de-recognised only when the obligation is extinguished, that is,
when the obligation is discharged or cancelled or expires.
2.13 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with
other short-term, highly liquid investments that are readily convertible into known amounts
of cash and which are subject to an insignificant risk of changes in value.
As stated in Note 2.11 fixed interest rate bank deposits with the maturity date of three
months or more from the date of acquisition are classified as financial assets.
2.14 Investments in subsidiary undertakings
Company investments in subsidiary undertakings and joint ventures held in the Company
Balance Sheet are shown at cost less impairment provisions.
Impairment testing is completed on an annual basis or as and when an indicator
for impairment under IAS 36 arises.
2.15 Equity
Equity comprises the following:
>
“Share capital” represents the nominal value of equity shares.
>
“Share premium account” represents the amount paid on issue for equity shares in excess
of their nominal value.
>
“Capital redemption reserve” represents the nominal value of its own equity shares
purchased, and then cancelled, by the Group.
>
“Share based payments reserve” represents the equity value of the accumulated share
based payments expenses in long-term incentive plans.
>
“Other reserve” represents the investment in own Company shares by the Employee
Benefit Trust.
>
“Profit and loss reserve” represents retained profits.
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2.16 Employee benefits
Defined contribution group and self-invested personal pension schemes.
The pension costs charged against profits are the contributions payable to the schemes
in respect of the accounting period.
2.17 Share-based payment
Equity-settled share-based payment
All goods and services received in exchange for the grant of any share-based payment are
measured at their fair values. Where employees are rewarded using share-based payments,
the fair values of employees’ services are determined indirectly by reference to the fair
value of the instrument as at the date it is granted to the employee.
All equity-settled share-based payments are ultimately recognised as an expense in the
income statement with a corresponding credit to “profit and loss reserve”.
If vesting periods or other non-market vesting conditions apply, the expense is allocated
over the vesting period, based on the best available estimate of the number of share options
expected to vest. Estimates are subsequently revised if there is any indication that the
number of share options expected to vest differs from previous estimates. Any cumulative
adjustment prior to vesting is recognised in the current period.
No adjustment is made to any expense recognised in prior periods if share options ultimately
exercised are different to that estimated on vesting.
Upon exercise of share options, the proceeds received net of attributable transaction costs
are credited to share capital, and where appropriate share premium.
2.18 Employee benefit trust
The assets and liabilities of the Employee Benefit Trust (EBT) have been included in the
Group accounts. Any assets held by the EBT cease to be recognised on the Group balance
sheet when the assets vest unconditionally in identified beneficiaries.
The costs of purchasing own shares held by the EBT are shown as a deduction against
equity. The proceeds from the sale of own shares held increase equity. Neither the
purchase nor sale of own shares leads to a gain or loss being recognised in the Group
income statement.
At present the Company operates a plan whereby all employees are entitled to make monthly
payments to the trust via payroll deductions. The current allocation period is six months and
shares are allocated to employees at the end of each allocation period. The shares are allocated
at the lower of the mid-market price at the beginning and end of the allocation period. The
trust Company has not waived its right to dividends on unallocated shares. Any profit or loss on
allocation of shares to individuals is taken directly to the “other reserve” within equity.
2.19 Shares held in an employee benefit trust
Transactions of the Company sponsored EBT are treated as being those of the Company
and are therefore, reflected in these financial statements.
2.20 Inventories
Inventories are valued at the lower of cost and net realisable value after making due
allowance for obsolete and slow-moving items. Cost includes all direct costs and
an appropriate proportion of fixed and variable overheads.
2.21 Provisions
A provision is recognised in the balance sheet when the Group has a present legal,
or constructive, obligation as a result of a past event, that can be reliably measured, and it
is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate
that reflects risks specific to the liability.
2.22 Agent vs Principal
The sale of discounted vouchers, be it physical or electronic, represents a significant
proportion of Group revenue presented as voucher resale income. The Group has a mixture
of relationships with retailers and third-party suppliers, depending on the offering. Some
offerings require purchasing inventory in advance while others require the maintaining
of cash floats with suppliers and others require the settlement of supplier invoices as they
are received.
Depending on the contractual relationship and the nature of the transactions with the
relevant suppliers, the Group has made a judgement on whether the offerings constitute
agency or principal transactions. This judgement is significant in nature as it has a material
impact on the revenue and cost of sales of the Group.
See Note 30 for detail on the prior year restatement relating to voucher resale income.
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3 Risk management objectives and policies
The Board recognises that the effective management of risks and opportunities is
fundamental to achieving the Group’s strategic objectives. As a result, it is important there
is a strong risk management culture throughout the Group, and that we identify, assess and
appropriately optimise the key risks to the Group achieving this strategy.
To achieve its objectives as well as sustainable profitability, the Group may pursue the
opportunities that gave rise to risk. Therefore, we have adopted an Enterprise Risk
Management Framework as part of our decision making and business management process.
As a result of this rigorous approach, the Group can maintain financial security, produce
good outcomes and the fair treatment of customers, and meet the needs of other parties
such as shareholders, employees, suppliers and regulators.
We review the risk management strategy regularly, particularly after any significant change
to the change environment and, each year, after the approval of the Group’s strategy and
business plans. The most significant financial risks to which the Group and Company are
exposed under normal circumstances are described in this section.
Credit risk
The Group’s and Company’s exposure to credit risk includes the carrying value of certain
financial assets at the balance sheet date, summarised as follows:
   
 
Group
Company
 
2023
2022
2023
2022
 
£’000
£’000
£’000
£’000
Reinsurance contracts held
(2)
42
Other receivables
13,857
11,349
Accrued interest
2
14
Cash and cash equivalents
17,497
16,958
50
237
Equity investments
1,470
1,290
Bank deposits
2,565
1,741
Total credit risk
35,389
31,394
50
237
A large proportion of the Group’s revenue is generated from the sale of insurance policies
to individual customers, with most of the premiums collected, and paid over to the Group,
by the individuals’ employer via payroll deduction. The vast majority of employers pay over
payroll deductions made, within one month, on a regular basis, thereby minimising the
credit risk exposure to the Group.
Due to the seasonal nature of the PG Let’s Connect business, the year-end receivables
balance is heavily weighted towards salary sacrifice goods. These receivables are due
from the employers of the individuals who place the order. The vast majority of these
employers pay the receivable balance within two months of receiving the consolidated
invoice for their scheme. Included within trade debtors are £6.9m (2022: £8.2m) relating
to PG Let’s Connect sales.
The use of payroll deductions by a “host company employer” would not be permitted where
the Board believed there may be a significant credit risk. Receivables past their due date are
summarised within Note 18. The credit risk for liquid funds and other short-term financial
assets is considered negligible, since the counterparties are all regulated in the UK by the PRA.
At 31 December 2023 the counterparties were as follows: The Co-operative Bank plc, HSBC
Bank Plc, Lloyds Bank Plc, Close Brothers Ltd and Aberdeen Standard Investments. Long-term
rate credit ratings for these counterparties range from AA to B (ratings sourced from Fitch,
and Standard & Poor’s) (2022: AA to B rating range).
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3 Risk management objectives and policies
continued
Credit risk
continued
The Group is also exposed to the recoverability of receivables from reinsurers.
At 31 December 2023, the Group utilised two reinsurances counterparties, namely,
Swiss Re Europe S.A., United Kingdom Branch and AXA XL Insurance Life Syndicate 3002.
Credit ratings for this reinsurer range from A+ to AA.
All subsidiary undertakings are 100% owned by the Company or subsidiaries thereof. There is
at least one Director of Personal Group Holdings on each of the larger subsidiary companies’
Boards and all operations are controlled from within the registered office in Milton Keynes.
The Company Directors have a good understanding of the operational performance of each
of the subsidiary undertakings. The Company Directors are satisfied that the subsidiary
undertakings have sufficient future income streams to enable the liabilities to be repaid
in full in the foreseeable future.
Information relating to the fair value measurement of financial assets can be found in Note 16.
Interest rate risk
The Group is not exposed to any financial liabilities with an interest element aside from the
interest element intrinsic in leases.
At 31 December 2023, bank deposits and cash and cash equivalents were £20,100,000
(2022: £18,700,000). If UK interest rates increased by 2%, net finance income would increase
by approximately £402,000 with a corresponding increase to equity.
Market risk
The Group is exposed to market risk, in the form of equity price risk, in respect of its equity
investments in managed funds which are invested in worldwide equities and so are valued
via directly observable inputs (level 1 inputs). The assets are measured at fair value through
profit and loss. An increase of 10% in the Group’s equity investments would result in an
unrealised gain in the income statement of £147,000.
Liquidity risk
Cash balances are managed internally and amounts are placed on short-term deposits
(currently not exceeding six months) to ensure that sufficient funds are available at all times
to pay all liabilities as and when they fall due.
As at 31 December 2023, the Group’s and Company’s liabilities have contractual maturities
(including interest payments where applicable) as summarised below:
 
Within 6
6–12
 
Non-cash
 
 
months
months
1–5 years
items*
Total
 
£’000
£’000
£’000
£’000
£’000
Group
         
At 31 December 2023
         
Trade and other payables
14,382
174
43
1,068
15,667
Insurance contract liabilities
(20)
755
735
Total liquidity risk
14,362
174
43
1,823
16,402
At 31 December 2022
         
Trade and other payables
10,369
186
868
11,423
Insurance contract liabilities
(71)
1,153
1,082
Total liquidity risk
10,298
186
2,021
12,505
 
Within 6
6–12
 
Non-cash
 
 
months
months
1–5 years
items*
Total
 
£’000
£’000
£’000
£’000
£’000
Company
         
At 31 December 2023
         
Amounts owed to Group
         
undertakings
Total liquidity risk
At 31 December 2022
         
Amounts owed to subsidiary
         
undertakings
431
431
Total liquidity risk
431
431
*
Non-cash items relate to insurance liabilities for remaining coverage or unearned revenue across the different
business segments.
Currency risk
The Group is not exposed to any currency risk as all business is conducted in GBP and all bank
accounts were held in GBP in both 2023 and 2022.
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
79
3 Risk management objectives and policies
continued
Insurance claim and related risks
During the year, Personal Assurance Plc (PA) underwrote two categories of business and
Personal Assurance (Guernsey) Ltd (PAGL) a further two categories, which are described
in detail below:
Hospital cash plans and other personal accident and sickness policies
These have been PA’s core products since 1984 and, at 31 December 2023, represent 99.2%
(2022: 99.1%) of PA’s gross premiums written. The vast majority of these policies are sold
to individuals at their place of work as part of an employee benefits package introduced
by PGH on behalf of the employer. The gross loss ratio (excluding claims handling costs)
on these policies at 31 December 2023 was 26.9% (2022: 26.4%). While the loss ratio has
increased year on year, historic losses have been consistent over the period of time that
these policies have been underwritten and therefore the Board has taken the decision
to continue to accept the underwriting risk in full and not to use reinsurance as a way of
managing insurance claim risk. This will continue to be reviewed to ensure that this remains
appropriate going forward. At present the maximum payable on any one single claim is
£91,375 (2022: £91,375) and would only be payable after a period of hospital confinement
of two years. The total number of these individual policies in force at 31 December 2023
was 177,073 (2022: 174,887) and the total annualised premium value of these policies
was £23,399,000 (2022: £20,720,000). The average amount paid per claim in 2023 was
£187 (2022: £184).
Voluntary Group Income Protection policies (VGIP)
In July 2012 PA commenced the underwriting of VGIP policies. In order to manage this
insurance risk, the Board took out a quota share reinsurance policy to exclusively cover
this part of the business. Under this reinsurance policy 90% of the value of each claim
is recoverable from the reinsurer.
At 31 December 2023 these policies represent 0.8% (2022: 0.9%) of PA’s gross
premiums written. The total annualised premium value of these policies was £163,000
(2022: £208,000). The gross loss ratio (excluding claims handling costs) on these policies
at 31 December 2023 was 17.5% (2022: 41.1%). The total number of these individual policies
in force at 31 December 2023 was 430 (2022: 509) and the average amount paid per claim
in 2023 was £2,583 (2022: £8,908).
Death benefit policies
Death benefit policies have been underwritten by PAGL since March 2015. These policies are
sold primarily to individuals at their place of work in the same way as the hospital cash plans.
At 31 December 2023 these policies represent 91% (2022: 90%) of PAGL’s gross
premiums written. The total annualised premium value of these policies was £7,949,000
(2022: £7,068,000). The gross loss ratio (excluding claims handling costs) on these policies at
31 December 2023 was 18.6% (2022: 23.6%). A stop loss reinsurance policy is in place to cover
claims over £3,000,000 at any given location. The total number of these individual policies
in force at 31 December 2023 was 67,756 (2022: 54,497) and the average amount paid per
death in 2023 was £9,779 (2022: £9,365).
Employee default policies
In February 2020 PAGL commenced the underwriting of employee default policies in
relation to salary sacrifice sales made by Let’s Connect. These policies provided cover
to Let’s Connect’s largest customer in the event that employees left owing salary
sacrifice deductions to their employer and these monies were unable to be recovered
by alternative means.
At 31 December 2023 these policies represent 9% (2022: 10%) of PAGL’s gross premiums
written. The gross loss ratio (excluding claims handling costs) on these policies at
31 December 2023 was 38.4% (2022: 3%) and the average amount paid per individual default
in 2023 was £483 (2022: £538).
Group loss ratio
For the year ended 31 December 2023 the gross claims ratio of the Group was 27.0%
(2022: 27.7%), by taking claims incurred as a proportion of insurance revenue. A 2% increase
in the claims ratio would increase claims incurred by approximately £574,000.
There are no material individual claims and open claims over 12 months old are also
immaterial. As a result, the Group has elected to not disclose claims development tables.
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
80
4 Capital management and requirements
The Group’s capital management objective is to maintain sufficient capital to safeguard
the Group’s ability to continue as a going concern and to protect the interests of all of
its customers, investors, regulator and trading partners while also efficiently deploying
capital and managing risk to sustain ongoing business development. The Group manages its
capital resources in line with the Group’s capital management Policy, which is reviewed on
an annual basis. The Group’s capital position is kept under constant review and is reported
monthly to the Board.
Since 1 January 2016, Personal Assurance Plc (PA) has been subject to the requirements of
the Solvency II (SII) Directive and must hold sufficient capital to cover its Solvency Capital
Requirement (SCR). In addition, PA maintains a buffer in excess of this capital requirement,
specified in line with the capital risk appetite agreed by the Board. The SCR is calculated
in accordance with the Standard Formula specified in the SII legislation.
At least annually, the Group undertakes the Own Risk and Solvency Assessment (ORSA).
This process enables the Group to assess how well the Standard Formula SCR reflects
the Group’s actual risk profile, and comprises all the activities by which PA establishes the
level of capital required to meet its solvency needs over the planning period given the
Company’s strategy and risk appetite. The conclusions from these activities are summarised
in the ORSA Report which is reviewed by the Risk Committee, approved by the Board and
submitted to the Prudential Regulation Authority (PRA) at least annually.
PA’s unaudited Eligible Own Funds, determined in accordance with the SII valuation
rules, were £10.8m (2022: £11.5m) which was in excess of the estimated SCR of £4.0m
(2022: £3.5m). This represented an estimated solvency coverage ratio of 272% (2022: 333%).
The movement year on year remains well within the Board’s risk appetite of holding greater
than 150% of the requirement.
Other than disclosed above there have been no changes to what is managed as capital
or the Group’s capital management objectives, policies or procedures during the year.
At 31 December 2023, the requirements of the Group’s regulated companies were
as follows:
   
     
Surplus
 
 
Capital
 
over capital
 
 
resources
Capital
resources
 
 
requirement
resources
requirement
Relevant
 
unaudited
unaudited
unaudited
regulatory
 
£’000
£’000
£’000
body
Company
       
Personal Assurance Plc
3,952
10,750
6,798
FCA, PRA
Personal Assurance
       
Services Limited
58
1,917
1,859
FCA
Personal Group Benefits Limited
52
655
603
FCA
Berkeley Morgan Limited
25
451
426
FCA
Personal Assurance
       
(Guernsey) Limited
732
3,545
2,813
GFSC
Personal Assurance Plc and Personal Assurance (Guernsey) Limited maintain the majority
of their assets in cash and short-term fixed interest rate deposits. The capital resources and
corresponding capital resource requirement for each PRA regulated entity is calculated in
accordance with PRA regulations. The capital resources and corresponding capital resource
requirement for each FCA regulated entity is calculated in accordance with FCA regulations.
The Group’s capital comprises all components of equity. The Group’s regulated entities have
complied with all externally imposed capital requirements during the year.
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
81
5 Segment analysis
The segments used by management to review the operations of the business are
disclosed below.
1) Affordable Insurance
Personal Assurance Plc (PA), a subsidiary within the Group, is a PRA regulated general
insurance Company and is authorised to transact accident and sickness insurance. It was
established in 1984 and has been underwriting business since 1985. In 1997 Personal Group
Holdings Plc (PGH) was created and became the ultimate parent undertaking of the Group.
Personal Assurance (Guernsey) Limited (PAGL), a subsidiary within the Group, is regulated
by the Guernsey Financial Services Commission and has been underwriting death benefit
policies since March 2015.
This operating segment derives the majority of its revenue from the underwriting by PA
and PAGL of insurance policies that have been bought by employees of host companies via
bespoke benefit programmes. During 2020 PAGL began underwriting employee default
insurance for a proportion of PG Let’s Connect customers.
2) Other Owned Benefits
This segment constitutes any goods or services in the benefits platform supply chain which
are owned by the Group. At present this is made up of a technology salary sacrifice business
trading as PG Let’s Connect, purchased by the Group in 2014.
3) Benefits Platform
Revenue in this segment relates to the annual subscription income and other related income
arising from the licensing of Hapi, the Group’s employee benefit platform. This includes
sales to both the large corporate and SME sectors. This segment includes agency revenue
generated from the resale of vouchers (Note 2.22).
4) Pay and Reward
Pay and Reward refers to the trade of the Group’s pay and reward consultancy Company
Innecto, purchased in 2019, and QCG, purchased in 2022. Revenue in this segment relates to
consultancy, surveys, and licence income derived from selling digital platform subscriptions.
5) Other
The other operating segment consists exclusively of revenue generated by Berkeley Morgan
Group (BMG) and its subsidiary undertakings along with any investment and rental income
obtained by the Group.
   
Restated
 
2023
2022
 
£’000
£’000
Revenue by segment
   
Affordable Insurance
28,708
25,406
Other Owned Benefits
11,081
16,800
Benefits Platform
9,445
7,833
Benefits Platform – Group Elimination
(2,760)
(2,627)
Pay & Reward
2,246
2,008
Other income
   
Other
139
237
Investment income
807
145
Total Revenue
49,666
49,802
Adjusted EBITDA* contribution by segment
   
Affordable Insurance
11,226
9,032
Other Owned Benefits
369
664
Benefits Platform
3,837
2,887
Pay & Reward
493
495
Other
1,033
139
Group admin and central costs**
(8,732)
(7,107)
Charitable donations
(100)
(100)
Adjusted EBITDA*
8,126
6,010
Interest
(79)
(20)
Depreciation**
(1,135)
(1,052)
Amortisation**
(770)
(786)
Goodwill impairment
(10,575)
Corporate acquisition costs
(46)
Restructuring costs**
(639)
Share based payments expenses
(169)
(291)
Profit before tax
5,334
(6,760)
*
Adjusted EBITDA is defined as earnings before interest, tax, depreciation, amortisation, goodwill impairment,
restructuring costs, share-based payment expenses, corporate acquisition costs, and release of tax provision.
** These costs constitute Group administration expenses on the face of the Consolidated Income Statement.
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
82
5 Segment analysis
continued
Segmental assets and liabilities
 
2023
 
Restated 2022
 
 
Assets
Liabilities
Assets
Liabilities
 
£’000
£’000
£’000
£’000
Insurance
24,227
8,191
22,635
5,974
Other Owned Benefits
7,585
2,509
9,608
4,794
Benefits Platform
7,995
6,471
2,410
1,325
Pay & Reward
1,100
21
1,190
17
Other
8,280
8,321
1,076
Total segment assets and liabilities
49,187
17,192
44,164
13,186
Other assets comprise mostly of goodwill, intangible assets and equity investments.
5a Further segmental analysis
The following note provides additional analysis on Group segmental income and expenditure.
Employee benefits and services income
   
Restated
 
2023
2022
 
£’000
£’000
Other Owned Benefits
11,081
16,800
Benefits Platform
9,445
7,833
Benefits Platform Group elimination*
(2,760)
(2,627)
Pay & Reward
2,246
2,008
Total employee benefits and service income
20,012
24,014
Insurance operating expenses
 
2023
2022
 
£’000
£’000
Operating expenses
17,353
16,301
Group elimination*
(2,760)
(2,627)
Total insurance operating expenses
14,593
13,674
*
In order to properly assess the segments individually, this Group elimination apportions at arm’s length value to
platform sales offered at a discount in return for insurance selling opportunities at corporate clients. This value
is then added to Benefits Platform income and Insurance service expenses before being eliminated out.
Employee benefits and services expenses
   
2023
   
Restated 2022
 
 
Cost of
Operating
Total
Cost of
Operating
Total
 
sales
expenses
expenses
sales
expenses
expenses
£’000
£’000
£’000
£’000
£’000
£’000
       
Other Owned
           
Benefits
9,441
1,274
10,715
14,502
1,639
16,141
Benefits Platform
2,225
3,384
5,609
1,777
3,171
4,948
Pay & Reward
35
1,718
1,753
29
1,484
1,513
Total employee
           
benefits and
           
services expenses
11,701
6,376
18,077
16,308
6,294
22,602
Gross transactional value
Gross transactional value from the sale of goods and vouchers is recognised at the net
value when significant risks and rewards of ownership of the goods and vouchers have
been passed to the buyer, usually on the dispatch of the goods and vouchers. The Group is
considered to be an agent for voucher sales with a total transaction value of £54,805,000
(2022: £40,830,000).
6 Investment income and finance costs
 
2023
2022
 
£’000
£’000
Interest income from cash on deposit
807
145
Total investment income
807
145
7 Insurance service expenses
Net expenses from reinsurance contracts held
 
2023
2022
 
£’000
£’000
Outward reinsurance premium
(105)
(149)
Reinsurer’s share of claims paid
(30)
65
Net expenses from reinsurance contracts held
(135)
(84)
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
83
7 Insurance service expenses
continued
 
2023
2022
 
£’000
£’000
Claims paid
6,799
6,353
Claims handling expenses paid
763
570
Claims Incurred
7,562
6,923
Changes to liabilities for claims
117
132
Net change in claims provision
117
132
Incurred acquisition costs
5,488
5,078
Administration expenses
1,426
1,541
Total Insurance operating expenses
6,914
6,619
Total insurance service expenses
14,593
13,674
8 Directors’ and employees’ remuneration
a) Staff costs (excluding Non-Executive Directors’ fees) during the year
were as follows:
 
2023
2022
 
£’000
£’000
Wages and salaries
12,693
11,289
Share-based payments expense
169
291
Social security costs
1,609
1,450
Other pension costs
636
561
Total staff costs
15,107
13,591
The average number of employees employed through the year was as follows:
 
2023
2022
 
Number
Number
Administration
180
161
Sales and marketing
89
101
Total number of employees
269
262
b) Directors’ remuneration:
 
2023
2022
 
£’000
£’000
Emoluments
1,111
916
Gain on exercise of options
79
Termination payment
185
Pension contributions to Group and self-invested personal
   
pension schemes
33
29
Total Director’s remuneration
1,329
1,024
During the year, three Directors (2022: three Directors) participated in Group and self-invested
personal pension schemes.
The amounts set out above include remuneration in respect of the highest paid Director
as follows. All emoluments relate to payments made by subsidiary undertakings.
 
2023
2022
 
£’000
£’000
Emoluments
348
332
Gain on exercise of options
79
Termination payment
185
Pension contributions to Group and self-invested personal
  
pension schemes
10
10
Total
543
421
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
84
8 Directors’ and employees’ remuneration
continued
b) Directors’ remuneration:
continued
Details of individual Director’s remuneration are given in the Remuneration Report
on pages 44 to 47. The Company does not incur employee remuneration.
Key management of the Group are the Directors of Personal Group Holdings Plc
together with the members of the Senior Leadership Team. Key management personnel
remuneration includes the following expenses:
 
2023
2022
 
£’000
£’000
Short-term employee benefits:
  
Salaries including bonuses
1,630
1,443
Social security costs
225
199
Gain on exercise of options
79
 
1,855
1,721
Post-employment benefits:
  
Defined contribution pension plans
60
62
Total remuneration
1,915
1,783
9 Profit before tax
 
2023
2022
 
£’000
£’000
Profit before tax is stated after:
   
Auditor’s remuneration (inclusive of non-recoverable VAT):
   
Audit services:
   
Audit of Company financial statements – Current Year
180
158
Audit of subsidiary undertakings
135
139
Non-audit services:
Depreciation of property, plant and equipment
1,135
1,052
Amortisation
770
786
Rental income receivable
94
10 Tax
The relationship between the expected tax expense based on the effective tax rate
of Personal Group Holdings Plc at 23.5% (2022: 19.0%) and the tax expense recognised in the
income statement can be reconciled as follows:
 
2023
2022
 
£’000
£’000
Profit before tax
5,334
(6,760)
Tax rate
23.5%
19%
Expected tax expense
1,253
(1,284)
Adjustment for non-deductible expenses
22
122
Adjustment for non-deductible expenses – Goodwill
   
impairment
2,009
Adjustment for tax exempt revenues
(458)
(254)
Other adjustments
   
Effect of tax rate changes on deferred tax
Tax credit in respect of prior years
193
(100)
Adjustment for previously non-deductible expenses
Actual tax expense
1,010
493
Continuing operations
1,010
493
Current tax expense
708
471
In respect of prior years
193
(100)
Deferred tax
   
Origination and reversal of temporary differences
109
122
Effect of tax rate changes
Total tax
1,010
493
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
85
11 Earnings per share
   
   
2023
   
2022
 
   
Weighted
   
Weighted
 
   
average
Pence
 
average
Pence
 
Earnings
number of
per
Earnings
number of
per
 
£’000
shares
share
£’000
shares
share
Basic
4,324
31,226,632
13.8
(7,253)
31,214,765
(23.2)
Dilutive effect
           
of shares in
           
 
0.0
750,552
(0.3)
0.0
755,224
0.0
Employee Share
           
Ownership Plan
           
Diluted
4,324
31,977,184
13.5
(7,253)
31,969,989
(23.2)
The weighted average number of shares shown above excludes unallocated own Company
shares held by Personal Group Trustees Ltd. For comparative purposes, excluding the
goodwill impairment, the earnings per share for 2022 were 10.9p (Diluted 10.9p).
12 Dividends
   
 
2023
2022
   
 
Pence per
Pence per
2023
2022
 
share
share
£’000
£’000
Equity dividends
       
Q2
5.300
5.300
1,655
1,655
Q4
5.850
5.300
1,829
1,657
 
11.150
10.600
3,484
3,312
Less: amounts paid on own shares
   
(2)
(2)
Total dividends
11.150
10.600
3,482
3,310
The dividends listed above were paid in the calendar year. Dividends of 10.6p per share were
paid relating to the 2022 financial period in Q4 2022 and Q1 2023 and an interim payment
of 5.85p has been paid relating to the 2023 financial period in Q4 2023.
13 Goodwill
The carrying amount of goodwill which has been allocated to those cash-generating units
can be analysed as follows:
   
 
Let’s
Pay &
 
 
Connect
Reward
Total
 
£’000s
£’000s
£’000s
Cost
     
At 1 January 2023
10,575
2,684
13,259
Additions in the year
563
At 31 December 2023
10,575
2,684
13,259
Amortisation and impairment
     
At 1 January 2023
10,575
10,575
Impairment charge for year
At 31 December 2023
10,575
10,575
Net book value at 31 December 2023
2,684
2,684
   
 
Let’s
     
 
Connect
Innecto
QCG
Total
 
£’000s
£’000s
£’000s
£’000s
Cost
       
At 1 January 2022
10,575
2,121
12,696
Additions in the year
563
563
Disposal
At 31 December 2022
10,575
2,121
563
13,259
Impairment charged
       
At 1 January 2022
Impairment charge for year
10,575
10,575
At 31 December 2022
Net book value at 31 December 2022
2,121
563
2,684
The net carrying values at 31 December 2023 have been reviewed for impairment.
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
86
13 Goodwill
continued
Pay & Reward
Innecto was acquired by PGH in 2019, and goodwill of £2.1 million was recognised as a
result of this acquisition. QCG Limited was acquired in 2022 and resulted in goodwill of
£0.6 million. Both businesses are now treated as one cash generating unit (CGU), this is due
to the commonality of their business models and cashflows, as well organisational changes
put in place at the end of 2023 which merged the team into one combined consultancy unit.
The teams now work in unison under one management structure to deliver pay and reward
consultancy to clients. The Pay & Reward CGU is also its own operating segment (see Note 5).
For the purpose of the value in use model, the CGU value is comprised of the total goodwill
allocated, the carrying value of the intangible assets recognised on acquisition and the
assets of the CGU such that the carrying amount of the CGU has been determined on a basis
consistent with the way the recoverable amount of the CGU is determined.
An expected cash flow approach was used applying multiple scenarios and affixed
probabilities that were deemed to be appropriate under management’s best understanding
of the business.
Key assumptions
Five years of future cash flows were included in the discounted cash flow model including
a long-term growth rate of 2.8% (35-year average of UK consumer price index). These
cash flows were then discounted using a risk mitigating post-tax discount rate of 22.4%
(2022: 22.4%) based on the CGU’s weighted average cost of capital, using the capital asset
pricing model with a risk premium in line with the risks associated with the uncertainties
around the forecasted growth.
Sensitivity
While management are confident that the Pay & Reward segment will generate forecasted
income, it is recognised that there is an inherent uncertainty within the forecasted cash
flows used in the impairment model.
Below is a table showing the sensitivity of the key assumptions and the impact of various
changes (in base percentage point terms) on the headroom. The Base column refers to the
headroom on the impairment review model completed by management.
 
- %
Base
+ %
Sensitivity Analysis – Impact on headroom
£’000s
£’000s
£’000s
Discount Rate (+/- 5%)
1,732
371
Terminal Growth Rate (+/- 0.5%)
308
371
437
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
87
14 Intangible assets
For the year ended 31 December 2023
       
Computer
Internally
   
 
Let’s Connect
Pay & Reward
 
software
generated
   
 
customer
customer book
Innecto
and website
computer
   
 
value
and trade name
technology
development
software
WIP
Total
 
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Cost
             
At 1 January 2023
1,648
1,063
298
2,678
506
1,003
7,196
Transfers
Additions in the year
95
1,945
2,040
Disposals
At 31 December 2023
1,648
1,063
298
2,773
506
2,948
9,236
Amortisation and impairment
             
At 1 January 2023
1,648
590
230
1,838
506
4,812
Amortisation charge for year
213
60
497
770
Disposals
At 31 December 2023
1,648
803
290
2,335
506
5,582
Net book amount at 31 December 2023
260
8
438
2,948
3,654
Net book amount at 31 December 2022
473
68
840
1,003
2,384
The Pay & Reward customer values and trademark include acquired intangibles relating to Innecto and QCG. This, and the Innecto technology, is being amortised through the consolidated
income statement over a five-year period. The net carrying values on 31 December 2023 have been assessed for impairment and no impairment was deemed necessary. The assets were
assessed in conjunction with the goodwill value in Note 13. The total value of amortisation relating to acquired intangibles was £273k (2022: £239k).
Overview
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Notes to the Financial Statements
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Financial Statements
Personal Group Holdings Plc
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Annual Report and Accounts 2023
88
14 Intangible assets
continued
For the year ended 31 December 2022
       
Computer
Internally
   
 
Let’s Connect
Pay & Reward
 
software
generated
   
 
customer
customer value
Innecto
and website
computer
   
 
value
and trade name
technology
development
software
WIP
Total
 
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Cost
             
At 1 January 2022
1,648
726
298
2,287
506
198
5,663
Acquisitions
337
337
Additions
201
995
1,196
Transfers
190
(190)
Disposals
At 31 December 2022
1,648
1,063
298
2,678
506
1,003
7,196
Amortisation
             
At 1 January 2022
1,648
411
170
1,293
504
4,026
Provided in the year
179
60
545
2
786
Eliminated on disposal
At 31 December 2022
1,648
590
230
1,838
506
4,812
Net book amount at 31 December 2022
473
68
840
1,003
2,384
Net book amount at 31 December 2021
315
128
994
2
198
1,637
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
89
15 Property, plant and equipment
For the year ended 31 December 2023
       
Furniture
     
 
Freehold land
Motor
Computer
fixtures &
Lease
Right of use
 
 
and properties
vehicles
equipment
fittings
improvements
assets
Total
 
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Cost
             
At 1 January 2023
5,037
157
1,443
2,318
38
1,139
10,132
Acquisitions
Additions
127
30
1,446
1,603
Disposals
(104)
(54)
(324)
(482)
At 31 December 2023
5,037
53
1,570
2,294
38
2,261
11,253
Depreciation
             
At 1 January 2023
1,916
134
1,058
1,474
38
873
5,493
Acquisition
Provided in the year
86
11
242
213
583
1,135
Eliminated on disposals
(104)
(54)
(237)
(395)
At 31 December 2023
2,002
41
1,300
1,633
38
1,219
6,233
Net book amount at 31 December 2023
3,035
12
270
661
1,042
5,020
Net book amount at 31 December 2022
3,121
23
385
844
266
4,639
In line with IFRS 16, right of use (ROU) assets relate to motor vehicles and building leases, a breakdown for which can be found in Note 29.
Overview
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Governance
Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
90
15 Property, plant and equipment
continued
For the year ended 31 December 2022
       
Furniture
     
 
Freehold land
Motor
Computer
fixtures &
Lease
Right of use
 
 
and properties
vehicles
equipment
fittings
improvements
assets
Total
 
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Cost
             
At 1 January 2022
5,037
157
1,112
2,310
38
1,204
9,858
Acquisitions
7
7
Additions
324
8
371
703
Disposals
(436)
(436)
At 31 December 2022
5,037
157
1,443
2,318
38
1,139
10,132
Depreciation
             
At 1 January 2022
1,828
125
786
1,265
37
784
4,825
Acquisition
2
2
Provided in the year
88
9
270
209
1
475
1,052
Eliminated on disposal
(386)
(386)
At 31 December 2022
1,916
134
1,058
1,474
38
873
5493
Net book amount at 31 December 2022
3,121
23
385
844
266
4,639
Net book amount at 31 December 2021
3,209
32
326
1,045
1
420
5,033
Overview
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Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
91
16 Financial investments
   
 
Group
 
Company
 
 
2023
2022
2023
2022
 
£’000
£’000
£’000
£’000
Bank deposits
2,565
1,741
Equity investments
1,470
1,290
Total financial investments
4,035
3,031
IFRS 13 Fair Value Measurement establishes a fair value hierarchy that categorises into three
levels the inputs to valuation techniques used to measure fair value. The fair value hierarchy
gives the highest priority to quoted prices (unadjusted) in active markets for identical assets
or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
All current equity investments are valued using Level 1 inputs.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable input).
Bank deposits, held at amortised cost, are due within six months and the amortised cost
is a reasonable approximation of the fair value. These would be included within Level 2
of the fair value hierarchy.
17 Inventories
   
   
Restated
 
2023
2022
 
£’000
£’000
Finished Goods – Salary Sacrifice
272
699
Total Inventories
272
699
18 Trade and other receivables
   
 
Group
 
Company
 
 
2023
2022
2023
2022
 
£’000
£’000
£’000
£’000
Loans and receivables:
       
Other receivables due within one year
13,857
11,348
Amounts due from
       
subsidiary undertakings
611
41
Accrued interest
2
14
Other prepayments and accrued
       
income
2,156
2,109
192
281
Total trade and other receivables
16,015
13,471
803
322
All of the Group’s receivables due within one year have been reviewed for indicators of
impairment. IFRS 9 compliant credit loss provisions have been made where applicable and
the values shown above are net of those provisions.
Other receivables include non-insurance trade receivables, and receivables relating to
float payments on the e-voucher platform. There have been no significant changes in any
contract asset balances during the reporting period.
Overview
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Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
92
18 Trade and other receivables
continued
A weighted average ageing of the expected loss provision is shown below:
   
2023
   
2022
 
 
Trade/
 
Credit
Trade/
 
Credit
 
Insurance
Weighted
Loss
Insurance
Weighted
Loss
 
Debtor
Average
Provision
Debtor
Average
Provision
 
£’000
Provision
£’000
£’000
Provision
£’000
Not Invoiced
3,700
0.3%
9
2,565
0.3%
6
Current
8,687
0.1%
6
7,896
0.1%
10
30 Days
1,000
1.0%
10
619
0.8%
5
60 Days
275
1.9%
5
168
1.6%
3
90 Days
212
5.7%
12
45
4.1%
2
150 Days
73
66.1%
48
106
23.7%
25
Total
13,947
0.6%
90
11,399
0.4%
51
Credit Loss Provision
 
2023
2022
 
£’000
£’000
Stage 1
Stage 2
90
51
Stage 3
Total
90
51
Set out below is the movement in the allowance for expected credit losses of trade
receivables and contracted assets:
 
2023
2022
 
£’000
£’000
At 1 January
51
84
Provision for expected credit losses
90
51
Provision release
(51)
(84)
At 31 December
90
51
In the past, the Group has not incurred significant bad debt write offs and consequently
whilst the above may be overdue, the risk of credit default is considered to be low.
The Group has no charges or other security over any of these assets.
19 Cash and cash equivalents
 
2023
2022
2023
2022
 
£’000
£’000
£’000
£’000
Cash at bank and in hand
15,571
11,746
50
237
Short-term deposits
1,926
5,212
Total cash and cash equivalents
17,497
16,958
50
237
20 Share capital
2023
£’000
2022
£’000
Authorised 200,000,000 ordinary shares of 5p each
10,000
10,000
Allotted, called up and fully paid 31,248,822
(2022: 31,248,822) ordinary shares of 5p each
1,562
1,562
Share Premium
1,134
1,134
Each ordinary share is entitled to one vote in any circumstance.
The total number of own shares held by the Employee Benefit Trust at 31 December 2023
was 85,396 (2022: 88,822). Of this amount, there are 69,955 (2022: 70,807) SIP shares that
have been unconditionally allocated to employees.
As at 31 December 2023, the Group maintained two share-based payment schemes
for employee compensation.
a) Company Share Ownership Plan (CSOP) and unapproved options
For the options granted to vest, there are no performance criteria obligations to be
fulfilled other than continuous employment during the three-year period. Exceptions are
made for early termination of employment by attaining normal retirement age, ill health
or redundancy.
All share-based employee compensation will be settled in equity. The Group has no legal
or constructive obligation to repurchase or settle the options.
Overview
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Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
93
20 Share capital
continued
a) Company Share Ownership Plan (CSOP) and unapproved options
continued
Share option and weighted average exercise price are as follows for the reporting
periods presented:
 
2023
2022
   
Weighted
 
Weighted
   
average
 
average
   
exercise
 
exercise
   
price
 
price
 
Number
Pence
Number
Pence
Outstanding at 1 January
209,251
387.6
226,743
384.1
Options granted in year
124,993
216.0
Options exercised in year
Options cancelled or lapsed
(67,483)
311.2
(17,492)
343.0
Outstanding at 31 December
266,761
326.5
209,251
387.6
The weighted average exercise price of 128,060 (2022: 121,007) share options exercisable
at 31 December 2023 was pence per share 398.34 (2022: 446.35).
There were 124,993 options granted under the CSOP scheme in 2023.
The weighted average remaining contracted life of outstanding options at 31 December
2023 was four years and four months (2022: five years and four months). The underlying
expected volatility was determined by reference to historical data. No special features
imminent to the options granted were incorporated into the measurement of fair value.
In total, £23,000 of employee compensation by way of share-based payment expense
has been included in the consolidated income statement for 2023 (2022: £20,000).
The corresponding credit is taken to equity. No liabilities were recognised due
to share-based transactions.
b) Long-Term Incentive Plan (LTIP)
The Remuneration Committee approved a new LTIP scheme on 6 April 2021. Under the
scheme share options of Personal Group Holdings Plc are granted to senior executives with
an Exercise Price of 5p (nominal value of the shares). The share options have various market
and non-market performance conditions which are required to be achieved for the options
to vest. The options also contain service conditions that require option holders to remain
in employment of the Group.
Total shareholder return (market condition)
Up to 50% of the awards vest under this condition. Subject to Compound Annual Growth
Rate (CAGR) of the Total Shareholder Return (TSR) over the Performance Period.
EBITDA targets (non-market condition)
Up to 35% of the awards vest under the condition of EBITDA measures over the
Performance Period.
Environmental, social and governance targets (ESG) (non-market condition)
Up to 15% of the awards vest under this condition. The awards shall vest upon the
Remuneration Committee determining that all ESG targets have been met.
The fair value of the share options is estimated at the grant date using a Monte-Carlo
binomial option pricing model for the market conditions, and a Black-Scholes pricing model
for non-market conditions. However, the above performance condition is only considered
in determining the number of instruments that will ultimately vest.
There are no cash settlements alternatives. The Group does not have a past practice of cash
settlement for these share options. The Group accounts for the LTIP as an equity-settled plan.
Three tranches of awards have been made to date since April 2021.
In total, £146,000 of employee share-based compensation has been included in the
consolidated income statement to 31 December 2023 (2022: £291,000). The corresponding
credit is taken to equity. No liabilities were recognised from share-based transactions.
Overview
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Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
94
21 Deferred Taxation
2023
2022
Deferred
Deferred
Deferred
Tax
Deferred
Tax
Tax Assets
Liabilities
Tax Assets
Liabilities
£’000
£’000
£’000
£’000
Non-current assets and liabilities
Property, plant and equipment
16
826
19
664
Intangible Assets
57
102
Share Options
77
66
93
883
85
766
Offset
(93)
(93)
(85)
(85)
Total deferred tax
790
681
2023
2022
£’000
£’000
At 1 January
(681)
(478)
Business Acquisition
(81)
Movement in provisions (debited)/credited to income statement
(109)
(122)
Movement in provisions due to tax rate changes
At 31 December
(790)
(681)
A deferred tax asset has not been recognised in respect of the carried forward tax losses
as there is uncertainty as to whether they will be utilised given the trade is no longer
a significant component of the Group.
22 Trade and other payables
Group
Company
2023
2022
2023
2022
Current
£’000
£’000
£’000
£’000
Financial liabilities measured
at amortised cost:
Amounts owed to subsidiary
undertakings
311
431
Other creditors
10,466
8,053
37
80
Accruals
2,717
1,964
Right of use creditor
559
148
231
211
Deferred income
1,358
1,128
Total trade and other payables
15,100
11,293
579
722
Group
Company
2023
2022
2023
2022
Non-Current
£’000
£’000
£’000
£’000
Right of use creditor over 1 year
567
130
Total
567
130
These liabilities are not secured against any assets of the Group.
Other creditors include trade creditors and creditors relating to e-vouchers from the platform.
23 Transition to IFRS 17
IFRS 17, Insurance Contracts
IFRS 17 replaces IFRS 4 Insurance Contracts for annual periods on or after 1 January
2023. In addition to the updated accounting policies discussed in Note 2, some of the key
differences between IFRS 17 and the accounting policies previously adopted by Personal
Group under IFRS 4 are outlined below.
23 Transition to IFRS 17
continued
Changes to classification and measurement
The adoption of IFRS 17 did not change the classification of Personal Group’s insurance
contracts issued. Under IFRS 17, Personal Group’s insurance contracts are all eligible to be
measured by applying the Premium Allocation Approach (“PAA”).
The measurement principles of the PAA are very similar to accounting policies previously
applied under IFRS 4 but are different in the following key areas:
>
Under IFRS 4 gross premiums written were recognised at the top of the consolidated
income statement with an adjustment for the change in unearned premium liability
and outward reinsurance premiums. IFRS 17 defines insurance revenue as the expected
premium cash flows, excluding any investment components. As such, the new Income
Statements consolidates those previous balances into one insurance income figure
for the period.
>
If contracts are assessed as being onerous, a loss component is recognised. Previously
these may have formed an unexpired risk reserve provision determine through the liability
adequacy test. No onerous contracts have been identified and, as a result, there has been
no transition adjustment for this.
>
Under IFRS 4, contract specific acquisition cash flows were deferred and amortised.
Under IFRS 17, the recognition of insurance acquisition expense cash flows includes an
allocation of acquisition-related operating expenses incurred in the period. The deferral
and amortisation of these expenses, under both IFRS 4 and IFRS 17, is spread over the
life of insurance contracts. As the vast majority of Personal Group’s insurance contracts
are weekly or monthly in length, there is no deferral and amortisation of acquisition
costs performed.
>
In the measurement of the insurance contract liability, under IFRS 4, losses and loss
adjustment expenses were required to be undiscounted without an explicit need for an
adjustment for non-financial risk. Under IFRS 17, the liability for incurred claims is typically
determined on a discounted expected value basis and includes an explicit risk adjustment
for non-financial risk. Personal Group has assessed the impact of discounting of expected
future insurance losses and, due to the majority of losses being paid in the first 12 months
following a loss event, this impact was insignificant. In addition to this, Personal Group
has always included a risk adjustment into its chain-ladder method for calculating its
insurance contract liability. As a result, there has been no change in calculation method
on transition to IFRS 17.
Changes to presentation and disclosure
Under IFRS 4, separate assets and liabilities were recognised for premium receivables,
deferred acquisition costs, unearned premiums, and loss and loss adjustment reserves.
These assets and liabilities were shown aggregated for all insurance contracts. While IFRS 17
groups the insurance assets and liabilities by portfolio, as defined by Personal Group’s level
of aggregation accounting policy (see Note 2), all insurance contracts are treated as one
aggregate class so there has been no impact of the change on transition.
The Group Income Statement has also changed in its presentation. Previously, Personal
Group reported items such as gross premiums written, movement in unearned provisions
and the reinsurer’s share of these. Under IFRS 17, the standard defines and requires distinct
presentation of insurance revenue and insurance service expenses.
Changes in accounting policies resulting from the adoption of IFRS 17 have been applied
using a full retrospective approach. Under the full retrospective approach, as at 1 January
2022 Personal Group identified, recognised, and measured each group of reinsurance
contracts as if IFRS 17 had always applied.
Were they to have arisen, Personal Group would have derecognised any existing balances
that would not exist had IFRS 17 always applied and recognised any resulting net difference
in equity. There were adjustments to the calculations on the balance sheet recognised
on the transition to IFRS 17.
24 Insurance contract liabilities
This section shows how the net carrying amounts of insurance contracts issued by the Group
have changed during the year, as a result of changes in cash flows and amounts recognised in
profit or loss. Insurance liabilities included within the Group’s statement of financial position
are made up of multiple components. No loss component is recorded for insurance contracts
held. Personal Group has elected not to adjust the liability for remaining coverage for the time
value of money as its insurance contracts do not contain a significant financing component.
The liability for incurred claims represents the gross estimated liability arising from claim
episodes in the current and preceding financial years which have not given rise to claims paid.
It is estimated based on current information, and the ultimate liability may vary as a result of
subsequent information and events. Adjustments to the amount of claims provision for prior
years are included in the Income Statement in the financial year in which the change is made.
The valuation of the liability for incurred claims in the Group’s subsidiary, Personal Assurance
Plc is estimated by using a Chain Ladder method, and the main assumption underlying this
technique is that the Company’s past claims development experience can be used to project
future claims development and hence ultimate claims costs.
Overview
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Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
95
Overview
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Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
96
24 Insurance contract liabilities
continued
The valuation in the Group’s subsidiary, Personal Assurance Group Guernsey Limited is also estimated based on the Company’s past claims experience to predict future claims
and claims costs.
It is estimated that the majority of all claims will be paid within 12 months and therefore claims development information is not disclosed.
In setting the provision for claims outstanding, a best estimate is determined on an undiscounted basis and then a 10% margin of prudence (risk adjustment) is added such that there
is confidence that future claims will be met from the provisions. The Group has estimated the risk adjustment using a confidence level (probability of sufficiency) approach at the 80th
percentile. That is, the Group has assessed its indifference to uncertainty as being equivalent to the 80th percentile confidence level less the mean of an estimated probability distribution
of the future cash flows.
The Group is exposed to insurance credit risk to the extent that premiums yet to be paid may default or not pay in full. The maximum level of this exposure is limited to the amount of unpaid
premiums which, at the end of 2023 was £2.5m (2022; £2.4m).
Maturity analysis as dictated by IFRS 17 has not been performed here as the Group expects all insurance contracts to mature within 12 months of the reporting date.
Liabilities for remaining coverage
Liabilities for incurred claims
Estimates of the
Excluding Loss
Loss
value of future
Risk
Component
Component
cash flows
Adjustment
Total
£’000
£’000
£’000
£’000
£’000
Insurance contract liabilities at 1 January 2023
(1,239)
2,203
118
1,082
Insurance revenue
(28,708)
(28,708)
Incurred claims
6,799
6,799
Insurance operating and claims handling expenses
7,677
7,677
Changes to liabilities for incurred claims
80
37
117
Total insurance service expenses
14,556
37
14,593
Insurance service result
(28,708)
14,556
37
(14,115)
Premiums received
28,238
28,238
Claims and other expenses paid
(6,799)
(6,799)
Insurance operating expense cash flows
(7,671)
(7,671)
Total cash flows
28,238
(14,470)
13,768
Insurance contract liabilities at 31 December 2023
(1,709)
2,289
155
735
Overview
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Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
|
Annual Report and Accounts 2023
97
24 Insurance contract liabilities
continued
Liabilities for remaining coverage
Liabilities for incurred claims
Estimates of the
Excluding Loss
Loss
value of future
Risk
Component
Component
cash flows
Adjustment
Total
£’000
£’000
£’000
£’000
£’000
Insurance contract liabilities at 1 January 2022
(766)
2,011
177
1,422
Insurance revenue
(25,406)
(25,406)
Incurred claims
6,353
6,353
Insurance operating and claims handling expenses
7,189
7,189
Changes to liabilities for incurred claims
191
(59)
132
Total insurance service expenses
13,733
(59)
13,674
Insurance service result
(25,406)
13,733
(59)
(11,732)
Premiums received
24,933
24,933
Claims and other expenses paid
(6,353)
(6,353)
Insurance operating expense cash flows
(7,188)
(7,188)
Total cash flows
24,933
(13,541)
11,392
Insurance contract liabilities at 31 December 2022
(1,239)
2,203
118
1,082
The liability for incurred claims is sensitive to the key assumptions in the table below. It has not been possible to quantify the sensitivity of certain assumptions such as legislative changes
or uncertainty in the estimation process.
The following sensitivity analysis shows the impact on profit before tax and equity for reasonably possible movements in key assumptions held constant. To demonstrate the impact due to
changes in each assumption, assumptions have been changed on an individual basis. The method used for deriving sensitivity information and significant assumptions did not change from
the previous period.
Impact on
Change in
profit
Impact on
Assumption
before tax
equity
Expected loss
+5%
(108)
(81)
Risk adjustment
+5%
(78)
(58)
Inflation rate
+1%
(3)
(2)
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
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Annual Report and Accounts 2023
98
25
Company investment in subsidiary undertakings
and joint venture
Shares in subsidiary
undertakings
2023
2022
£’000
£’000
Cost
At 1 January
38,372
38,101
Share-based expenses
146
271
At 31 December
38,518
38,372
Amounts written off
At 1 January
12,898
12,898
Impairment provision in year
At 31 December
12,898
12,898
Net book amount at 31 December
25,620
25,474
At 31 December 2023 the Company held 100% of the allotted share capital of the following
trading companies, all of which were incorporated in England and Wales, with the exception
of Personal Assurance (Guernsey) Limited which is incorporated in Guernsey, and have been
consolidated in the Group financial statements. The registered address of all Group entities
is John Ormond House, 899 Silbury Boulevard, Central Milton Keynes, MK9 3XL, with the
exception of Personal Assurance (Guernsey) Limited whose registered address is Level 5,
Mill Court, La Charroterie, St Peter Port, Guernsey, GY1 1EJ.
Subsidiary undertaking
Nature of business
Personal Group Limited
Intermediate holding Company
Personal Assurance Plc*
General insurance
Personal Assurance Services Limited*
#
Administration services
Personal Group Benefits Limited*
#
Employee benefits sales and marketing
Personal Group Trustees Limited*
Trustee for employee share options
Personal Management Solutions Limited*
Employee benefits sales and marketing
Berkeley Morgan Group Limited*
#
Berkeley Morgan Group Holding Company
Berkeley Morgan Limited
+
Independent financial advisers
Personal Assurance (Guernsey) Limited*
Death insurance underwriting services
Let’s Connect IT Solutions Limited*
Employee benefits salary sacrifice
technology products
Innecto People Consulting Limited*
HR consultancy and technology providers
Quintige Consulting Group Limited*
#
HR consultancy
Multiplelisting Limited
Dormant
Mutual Benefit Limited
Dormant
Partake Services Limited
Dormant
Personal Assurance Financial Services Plc
Dormant
Berkeley Morgan Healthcare Limited
+
Dormant
B M Agency Services Limited
+
Dormant
Berkeley Morgan Property Limited
+
Dormant
Summit Financial Solutions Limited
+
Dormant
Summit Financial Holdings Plc
+
Dormant
Berkeley Morgan Trustees Limited
+
Dormant
Personal Group Mobile Limited*
Dormant
Universal Provident Limited
+
Dormant
*
Indirectly owned by Personal Group Holdings Plc via Personal Group Limited
+
Indirectly owned by Personal Group Holdings Plc via Personal Group Limited and Berkeley Morgan Group Limited
#
Exempt from audit under parental guarantee
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
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Annual Report and Accounts 2023
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25
Company investment in subsidiary undertakings
and joint venture
continued
The following subsidiaries of the Group are exempt from the requirements of the Companies
Act 2006 (“the Act”) relating to the audit of individual accounts by virtue of s479A. The parent
undertaking, Personal Group Holdings Plc, gives a guarantee to these subsidiaries under
section 479C in respect of the year ending 31 December 2023.
>
Personal Assurance Services Limited – 3194988.
>
Personal Group Benefits Limited – 3195037.
>
Berkeley Morgan Group Limited – 3456258.
>
Quintige Consulting Group Limited – 3773926.
26 Capital commitments
The Group has no capital commitments at 31 December 2023 and 31 December 2022.
27 Contingent liabilities
There were no contingent liabilities at 31 December 2023 and 31 December 2022.
28 Pensions
Group and self-invested personal pension schemes
The Group operates a defined contribution Group personal pension scheme for the benefit of
certain Directors and employees. The scheme is administered by Aegon UK plc and the funds
are held independent of the Group. In addition, the Group makes contributions to certain
Directors’ self-invested personal pension schemes.
These schemes are administered by independent third-party administrators and the funds
are held independent of the Group.
29 Leasing commitments and rental income receivable
Amounts recognised in the balance sheet
Following the adoption of IFRS 16 the balance sheet at 31 December 2023 includes assets
and liabilities relating to Right of Use (ROU) assets as detailed below:
2023 – Right of use assets & lease liabilities
Net Book Value
Lease
of Assets
Liability
£000
£000
Motor vehicles
948
1,012
Buildings
94
114
Total
1,042
1,126
2022 – Right of use assets & lease liabilities
Net Book Value
Lease
of Assets
Liability
£000
£000
Motor vehicles
114
111
Buildings
152
167
Total
266
278
The initial valuation of the asset is equal to the discounted lease liability on the inception of the
lease and this is depreciated over the shorter of either the life of the asset or the lease term.
Amounts recognised in the consolidated statement of profit or loss
Depreciation
Interest
Charge
Expense
£000
£000
Motor vehicles
524
76
Buildings
59
2
Total
583
78
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
Personal Group Holdings Plc
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Annual Report and Accounts 2023
100
29
Leasing commitments and rental income receivable
continued
Total operating lease payments due until the end of the lease, or the first break clause,
total £1,203,000 (2022: £295,000). An analysis of these payments due is as follows:
2023
2022
£’000
£’000
Total lease payments falling due:
Within one year
593
167
Within one to two years
482
66
Within two to five years
128
62
Total
1,203
295
Total operating rent receivable payments due until the end of the lease or the first break
clause, total £nil (2022: £nil). An analysis of these receivable payments due is as follows:
2023
2022
£’000
£’000
Future minimum lease payments:
Within one year
Within one to two years
Within two to five years
Total
Below is a reconciliation of changes in liabilities arising from financing activities:
1 January
Cash
New
31 December
2023
Flows
leases
Other
2023
£’000
£’000
£’000
£’000
£’000
Current lease liabilities
190
(530)
940
(41)
559
Non-current lease liabilities
130
437
567
Total liabilities from
financing activities
320
(530)
940
396
1,126
The “Other” column includes the effect of reclassification of non-current leases to current
due to the passage of time, the effect of the disposal of lease assets with their related
creditors and the effect of the unwinding of the discounted ROU creditors over time.
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
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Annual Report and Accounts 2023
101
30 Prior Year Restatement
As a result of the implementation of IFRS 17, it is necessary to restate the 2022 results as though these policies have always been in effect. Furthermore, 2022 has been restated to reflect
a change in accounting for voucher resale income to appropriately reflect the agency nature of the underlying contracts. Below is a reconciliation from the 2022 income statement as
presented in the prior year signed financial statements to the income statement presented as a comparative in these financial statements.
Previous
IFRS 17
Voucher
Restated
2022
Reclass
Income Reclass
2022
£’000
£’000
£’000
£’000
Gross premiums written
25,660
(25,660)
Outward reinsurance premiums
(138)
138
Change in unearned premiums
(254)
254
Change in reinsurers’ share of unearned premiums
(11)
11
Earned premiums net of reinsurance
25,257
(25,257)
Insurance Revenue
25,406
25,406
Employee benefits and services income
23,627
387
24,014
Voucher resale income
37,389
(37,389)
Other income
237
237
Investment income
145
145
Group revenue
86,655
149
(37,002)
49,802
Claims incurred
(6,990)
6,990
Insurance operating expenses
(6,619)
6,619
Insurance Service Expenses
(13,674)
(13,674)
Net expenses from reinsurance contracts held
(84)
(84)
Employee benefits and services expenses
(22,236)
(366)
(22,602)
Voucher resale expenses
(37,368)
37,368
Other expenses
(33)
(33)
Group administration expenses
(8,973)
(8,973)
Share based payments expenses
(291)
(291)
Unrealised losses on equity investments
(210)
(210)
Charitable donations
(100)
(100)
Group expenses
(82,820)
(149)
37,002
(45,967)
Operating profit
3,835
3,835
Finance costs
(20)
(20)
Goodwill impairment
(10,575)
(10,575)
Loss before tax
(6,760)
(6,760)
Taxation
(493)
(493)
Loss for the year
(7,253)
(7,253)
30 Prior Year Restatement
continued
Below is an extract of the 2022 balance sheet highlighting the impact of the restatement.
Previous
IFRS 17
Voucher
Restated
2022
Reclass
Reclass
2022
£’000
£’000
£’000
£’000
Trade & other receivables
15,863
(2,392)
27
13,498
Reinsurance contracts held
95
(53)
42
Inventories
726
(27)
699
Total assets
46,609
(2,445)
44,164
Insurance contract liabilities
3,474
(2,392)
1,082
Trade and other payables
11,476
(53)
11,423
Total liabilities
15,631
(2,445)
13,186
Total equity and liabilities
46,609
(2,445)
44,146
IFRS 17
The transition to IFRS 17 has resulted in a small change in presentation on the balance
sheet, particularly around unpaid premiums. These were previously presented as insurance
receivables but, per IFRS 17, these now offset the liability for remaining coverage within
insurance contract liabilities. See Note 23 for further details.
Voucher Income reclassification
Over the course of the year, management has undertaken a review of a number of
the underlying arrangements that it has with its suppliers, considering in particular (in
accordance with IFRS 15) the steps taken to fulfil the purchasing of the vouchers (which are
increasingly electronic in nature), the process by which the vouchers are transferred from
supplier to customer and whether PMS has control of those vouchers prior to the transfer
of those vouchers from the supplier to the customer.
The key indicators of control such as inventory risk, control over pricing and responsibility
over the acceptability of the goods being fulfilled, have been considered during this review
and, while the Group does have limited control over pricing, the risks associated with the
other indicators reside with suppliers. As a result, management considers the substance of
these relationships as that of an agency, with only the resulting transaction fee and/or margin
recognised in the income statement for the period. Management also concluded that PMS
was acting as an agent in the prior year and have therefore restated the comparatives to
appropriately reflect the agency nature of the underlying contracts. As a consequence, 2022
income has been netted to represent agency income and this figure has been included within
employee benefits and services income. Expenses related to this agency service (largely card
transaction costs) have been allocated to employee service expenses accordingly.
31 Related party transactions
Personal Group Holdings Plc holds a bank account which it uses for payments to Company
specific creditors. During 2023 and 2022 the Company paid its own dividends and expenses.
A list of intercompany balances that are outstanding at the balance sheet date with
subsidiary undertakings is as follows:
2023
2022
Receivable
Payable
Receivable
Payable
£’000
£’000
£’000
£’000
Personal Assurance Plc
145
Personal Assurance Services Limited
31
11
Personal Group Benefits Limited
31
1
Personal Assurance Financial
Services Plc
137
137
Multiplelisting Limited
100
100
Personal Management
Solutions Limited
27
7
Mutual Benefit Limited
12
12
Partake Services Limited
3
3
Personal Group Limited
381
178
Berkeley Morgan Group Limited
13
4
Innecto People Group
Consulting Limited
42
16
Total
611
311
41
428
All balances are repayable on demand. None of the balances are secured. All balances relate
to intercompany funding balances.
Transactions with Directors
During the year, no transactions were undertaken with Directors, or companies in which
Directors were key decision makers.
32 Post balance sheet events
There have been no post balance sheet events.
Overview
Strategic Report
Governance
Notes to the Financial Statements
continued
Financial Statements
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Annual Report and Accounts 2023
102
Overview
Strategic Report
Governance
Financial Statements
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Annual Report and Accounts 2023
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Company Information
Company registration number:
3194991
Registered office:
Personal Group Holdings Plc
John Ormond House
899 Silbury Boulevard
Central Milton Keynes
MK9 3XL
Telephone: 01908 605000
www.personalgroup.com
Directors:
M Bennett – Non-Executive Chairman
P Constant – Chief Executive (appointed 01/08/2023)
D Frost – Chief Executive (resigned 01/08/2023)
S Mace – Chief Financial Officer
M Darby-Walker – Senior Non-Executive Director
B Head – Non-Executive Director
C Astin – Non-Executive Director
A Lothian – Non-Executive Director
Secretary:
D Kane
Banker:
The Lloyds Bank plc
25 Gresham Street
London
EC2V 7HN
Auditor:
EY LLP
25 Churchill Place
Canary Wharf
London
E14 5EY
Nominated Broker and Adviser:
Cavendish Securities plc
1 Bartholomew Close
London
EC1A 7BL
Personal Group Holdings Plc
John Ormond House
899 Silbury Boulevard
Central Milton Keynes
MK9 3XL
www.personalgroup.com