Hansard Global Reports 88% Profit Decline in H1 2025 Interim Results
Why we think this is very bad
Hansard Global's interim results reveal a concerning financial picture. The 88% decrease in IFRS profit before tax, from £4.1m to £0.5m, coupled with a significant drop in earnings per share from 2.9p to 0.3p, signals severe profitability issues. While new business sales grew by 36%, this growth has not translated into improved financial performance. The company faces increased expenses, ongoing litigation risks, and expects profit pressures to continue for the next two years due to strategic investments and regulatory changes. The declining cash position and high valuation metrics further compound these concerns. Despite some positive indicators in new business growth, the overall financial health and near-term outlook of the company appear to be deteriorating, which is likely to negatively impact investor confidence.
Key Points
- IFRS profit before tax decreased 88% to £0.5m in H1 2025
- Basic earnings per share fell from 2.9p to 0.3p
- New business sales grew 36% year-on-year to £49.1m (PVNBP)
- Administrative expenses increased 25% to £18.4m
- Cash position decreased from £65.0m to £61.3m
- Net cash outflow after dividends of £10.3m in H1 2025
- Ongoing litigation risks with cumulative writs totaling £20.0m
- Profit pressures expected to continue for next two years
- New product offerings show promise but will take time to impact profits
- Interim dividend maintained at 1.8p per share
Summary
Hansard Global's H1 2025 interim results reveal significant financial challenges. IFRS profit before tax plummeted 88% to £0.5m, while basic earnings per share fell from 2.9p to 0.3p. Despite a 36% year-on-year growth in new business sales to £49.1m (PVNBP), the company's profitability has been severely impacted. Administrative expenses increased by 25% to £18.4m, driven by strategic investments, IT system depreciation, and litigation costs. The company faces ongoing litigation risks with cumulative writs totaling £20.0m. Hansard's cash position decreased from £65.0m to £61.3m, with a net cash outflow of £10.3m after dividends. The outlook remains challenging, with profit pressures expected to continue for the next two years due to ongoing investments, litigation costs, and regulatory changes. While new product offerings show promise, the company acknowledges it will take time for improved sales to translate into increased profits. Given these factors, the current valuation appears high, with an estimated P/E ratio of 84.58 based on annualized H1 2025 earnings.