Personal Group

Insurance and employee benefits provider Personal Group Holdings remains upbeat despite a 9% interim profits fall to £4m.

Turnover at Milton Keynes-based Personal, Britain’s largest provider of face-to-face employee benefit schemes in the workplace, marked time at £13m. Profits suffered from a £600,000 increase in claims incurred, which founder and outgoing chairman Christopher Johnston attributes to increased premiums, enhanced policy terms and the traditional higher propensity of new policy holders to make claims.

Personal’s Berkeley Morgan subsidiary, bought four years ago for £12m, contributed £501,000 to pre-tax profit, against £693,000 a year ago. Managing director Nigel Brittle says private medical insurer BUPA has agreed to underwrite a new version of the company’s Voluntary Group Income Protection policy, which increased premiums to £48,000 in the first half year, but has yet to cover costs.

Low interest rates accounted for a halving in interim investment income to £184,000. The company says it has now entirely paid off the loan taken out in 2005 to fund the Berkeley Morgan takeover and has no debt apart from a trustees’ loan to fund employee share schemes.

Non-executive director Chris Curling will take over in November as chairman from Johnston, who will retain a non-executive board seat and a controlling interest in Personal, which has paid out 12.45p a share in quarterly dividends so far and envisages a full-year pay-out of 16.6p, up 0.01p.

This means a yield of nearly 6% underpins the shares at 273p, against Growth Company Investor’s 2003 recommendation at 115p, 2007’s 321p high and a 204p 12-month low. Analysts expect the claims ratio to improve and yield gives shares have some defensive qualities.