Hansard Global warns of one-off charge from procedural 'weakness'

6th May 2014 09:30

Savings and investments group Hansard Global warned profits would be hit by an issue in its charging procedures and that new business wins had fallen badly as flagged.Hansard brought forward its quarterly statement after it identified weaknesses in its procedures in relation to Chargeable Events certificates required by tax authorities, which it expects will cost the company around £5m.The AIM-listed company said the weakness came as a result of the transfer of its Europe business's administration to the Isle of Man.Furthermore, the present value of new business premiums was, at £72.1m, 44.8% below the same period a year ago, which was a tough comparator and had been previously hinted at.Chief Executive Gordon Marr said new business wins were likely to remain weak: "While we expect fourth quarter (Q4) 2014 new business to be significantly below the strong comparative of £40m PVNBP [present value of new business premium] in Q4 2013, we anticipate that sales will start to improve from June 2014 onwards following the launch of a range of new product features and a refreshed branding in the last week of March 2014."Marr added that the group's strong capital position would allow it to pay dividends in line with previous guidance.Broker Panmure Gordon said uncertainty over the ultimate cost of the HMRC issue and the impact of the new sales strategy have led it to lower its target price to 105p from 130p previously and its recommendation to 'hold' from 'buy'.Shares in Hansard were down 14.9% to 85.38p at 09:17 on Tuesday. OH