Personal Group PLC, a leading provider of employee services in the UK, provides the following trading update following its financial year ended on 31 December 2018.
The Company has continued to see good progress across its three business segments. Overall trading for FY 2018 was ahead of the previous year and results are expected to be broadly in line with market expectations.
This performance reflects the continued strength of the core insurance business, which saw new sales perform well despite facing market challenges such as GDPR legislation changes which temporarily delayed new client signings. The Company was also required to address a data security issue resulting from a third-party supplier which impacted client relationships.
During FY 2018, PG Let’s Connect significantly improved its year-on-year performance and is showing clear signs of recovery as expected, although it saw a small number of key clients defer running the Let’s Connect offer to their employees until 2019 for their own logistical reasons.
The SaaS revenue performed well. The Company’s SME SaaS product is aimed at the Sage customer base; Sage Employee Benefits (‘SEB’), was launched by Sage to its wider client base in November of 2018. Though started later than expected, the sales focus has now broadened beyond Sage’s payroll clients to its entire customer base. A dedicated Sage team together with Personal Group personnel have been onsite supporting the launch. The early indications are positive as Sage seeks to take this product to all of their customers.
The data security issues experienced by the Company within its third-party supply chain necessitated an acceleration of a planned rationalisation of the Group’s supply chain. Although this initiative needed an increased and early investment, it brings forward benefits of reduced supply chain risk and improving the quality of the client experience.
Though the Company has broadly traded in line with expectations in 2018, the challenges experienced by each if its divisions, combined with the wider economic uncertainty related to the UK’s withdrawal from the EU, have led the board to adopt a more conservative outlook in regard to the Let’s Connect and Insurance Business in 2019. As a consequence, profitability is unlikely to grow materially from 2018.
Personal Group remains in a robust position as it enters 2019, with a market leading offer and a proven team to support it. The market for employee benefits also remains strong, with continued pressure on businesses to improve productivity and staff retention in a tight labour market.
Mark Scanlon, Chief Executive of Personal Group, commented: “Despite challenges in 2018 the Company has traded broadly in line with expectations. While the current economic and political conditions inevitably bring a greater level of business uncertainty, which we have seen evidenced through slower decision making on the part of our customers, the Board remains cautiously optimistic that we can continue to progress our business in the year ahead. Our search for my successor is progressing well and we hope to make further communications soon.”