Personal Group To Wind Down PG Mobile Business By End Of Year

LONDON (Alliance News) - Personal Group Holdings PLC on Thursday said it has decided to shut down ...

Alliance News 7 July, 2016 | 3:47PM
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LONDON (Alliance News) - Personal Group Holdings PLC on Thursday said it has decided to shut down its mobile virtual network operator PG Mobile due to poor market conditions, but said its core businesses have traded strongly over the first six months of 2016.

The employee benefits and employee insurance products provider said its insurance division and salary sacrifice technology business PG Tech have traded strongly over the first six months of 2016, noting the insurance business achieved sales of GBP6.2 million in the period, ahead of the GBP5.5 million the same period a year earlier.

Personal Group said it remains on target to launch postal and logistics operator Royal Mail PLC as a PG Tech customer with a rollout currently being planned for September this year. All contractual elements have now been agreed, Personal Group said, and the contract is expected to be signed in the coming weeks.

However, following a review of its PG Mobile business, Personal Group said it has concluded that the market conditions have not improved and that they will not allow for the expected run rate to be achieved. Wholesale pricing available to the business is not keeping pace with the fast moving market and uptake in salary sacrifice for mobiles is not meeting expectations, the company said.

As such, Personal Group said its resources could be better deployed in other parts of the business and it will be closing down PG Mobile by the end of the year. A GBP1.0 million one-off cost will be incurred in the current financial year to allow for the carefully managed wind down of the activity, Personal Group said, adding that it has a plan in place to manage its customers through the wind down.

Personal Group also noted that its deal with Sage (UK) Ltd, part of Sage Group PLC, for the development of a Sage Employee Benefits product and platform was progressing well and the product is expected to be launched during the fourth quarter of this year, conditional on certain regulatory approvals. Following the launch, the product will be offered through Sage's payroll business in the UK and Ireland, which will require GBP1.0 million in investment, Personal Group said.

The company added it expects this to be paid back within the next financial year once operational.

Shares in Personal Group were down 8.1% at 455.00 pence on Thursday.

By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland

Copyright 2016 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Personal Group Holdings PLC 491.00 GBX 0.00 -
Sage Group (The) PLC 549.20 GBX 0.07
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