News Release
11 August 2009
Friends Provident Group plc -
Interim management report and results for the
half-year ended
30 June 2009
A strong base for profitable growth
Financial highlights:
- Life and pensions gross cash generated improved to £35 million (2008: £(19)m)
- IFRS underlying profit £38 million (2008: £13m)
- Dividend maintained; Interim dividend 1.3p per share (2008: 1.3p)
- EEV underlying profit £131 million (2008: £211m) and embedded value 124p
per share (31 December 2008: 128p)
- First half new life and pensions business £319 million annualised premium
equivalent (2008: £507m) with second quarter 15% up on first quarter
- Strong Insurance Groups Directive (IGD) surplus maintained, estimated at £0.9
billion at 31 July 2009 (31 December 2008: £0.85bn)
Operating highlights
- UK business restructure largely complete and targeted cost savings secured
- International businesses continue to have strong prospects with resilient
profitability for Friends Provident International
- Demerger of F&C Asset Management plc (completed 3 July 2009)
Trevor Matthews, chief executive officer, said:
“We are excited by the prospects for our business as the foundation for
Resolution’s consolidation and restructuring strategy for the open
businesses in the Life and Asset Management sectors. Resolution is
supportive of our current strategy and turnaround plan.
“Our achievements over the last 18 months in reshaping and refocusing
our business have placed us well to participate in industry consolidation
and leverage our efficient infrastructure.
“We sum up our existing organic growth strategy in just four words:
‘Fix UK, Build International’. To this end, we have secured our targeted
cost savings and have created an efficient platform capable of handling
significant new business volumes making us an attractive distribution
partner both in the UK and overseas.
“Trading conditions remain tough. In the UK, the economic slowdown has
reduced new business from increments and new members on our existing
group pensions schemes, while the protection market remains subdued
compared to recent years. We are making headway in new schemes on
nil or funded commission terms but there are significant timelags,
exacerbated by the recession, from participating in tenders to winning the
schemes and seeing new business volumes come through. As expected,
these lower volumes have an exaggerated effect on new business metrics,
but that will reverse when volumes recover. Our International businesses
produced resilient results against a tough economic backdrop worldwide.
“The demerger of our stake in F&C represented a further significant
achievement and bolsters our already strong capital position.”
Financial Summary
| Financial Summary |
Half year ended 30 June 2009 |
Half year ended 30 June 2008 |
| Cash |
|
|
| Life and pensions gross cash generated |
£35m |
£(19)m |
| Life and pensions net cash operating surplus |
£23m |
£10m |
| Shareholder cash outflow |
£(7)m |
£(121)m |
| Internal rate of return on new business (i) |
10.7% |
12.6% |
| Discounted cash payback on new business (i) |
14 years |
11 years |
| IFRS |
|
|
| IFRS underlying profit (i) before tax |
£38m |
£13m |
| IFRS loss before tax from continuing operations |
£(102)m |
£(221)m |
| Basic IFRS loss per share |
(4.2)p |
(2.6)p |
| IFRS net asset value per share excluding goodwill |
75p |
77p (iv) |
| EEV |
|
|
| Contribution from new business (i) |
£30m |
£67m |
| EEV underlying profit (i) before tax |
£131m |
£211m |
| Return on embedded value (i) (annualised) |
5.9% |
8.4% |
| Embedded value per share (ii) |
124p |
128p (iv) |
| Capital and dividend |
|
|
| IGD surplus capital resources (i) |
£0.9bn(iii) |
£0.85bn (iv) |
| Total shareholder return |
(24)% |
(34)% |
| Interim dividend per share |
1.3p |
1.3p |
(i) As defined within Appendix 4
(ii) Embedded value is stated on a pro forma basis, including an uplift of
the net asset value attributable to F&C to the market value
(iii) As at 31 July 2009 (estimated)
(iv) As at 31 December 2008
- Ends -
View a PDF of the full press release (490k)
Notes to Editors
-
There will be a conference call on these results for investors and analysts 2.30pm
BST hosted by Trevor Matthews, CEO and Evelyn Bourke, CFO. Dial in telephone
number +44 (0)20 3037 9157.
- A recording of this call will be available for 7 days by dialling
+44 (0)20 8196 1998 (access code 3849752#)
- Presentation slides for this call will be available from 9.30am today on www.friendsprovident.com/presentations
- For more information on Friends Provident including photos, awards, fast facts,
presentations, and media contacts please visit the media section at www.friendsprovident.com/media
- Financial reporting dates
| Financial Reporting Calendar |
Date |
| Friends Provident Group plc Interim Management Statement and Quarter 3 2009 New Business Announcement |
27 October 2009 |
| Friends Provident Group plc Quarter 4 New Business |
28 January 2010 |
| Friends Provident Group plc 2009 Preliminary Results |
16 March 2010 |
| Friends Provident Group plc Interim Management Statement
and Quarter 1 2010 New Business |
28 April 2010 |
| Friends Provident Group plc 2010 Half-year Results
and Quarter 2 2010 New Business |
10 August 2010 |
| Friends Provident Group plc Interim Management Statement
and Quarter 3 2010 New Business |
28 October 2010 |
Certain statements contained in this announcement constitute 'forward-looking
statements'. Such forward-looking statements involve risks, uncertainties and
other factors, which may cause the actual results, performance or achievements,
from time to time, of Friends Provident Group plc, its subsidiaries and subsidiary
undertakings or industry results to be materially different from any future
results, performance or achievements expressed or implied by such forwardlooking
statements. Such risks, uncertainties and other factors include, among
others, adverse changes to laws or regulations; risks in respect of taxation;
unforeseen liabilities from product reviews; asset shortfalls against product
liabilities; changes in the general economic environment; levels and trends in
mortality, morbidity and persistency; restrictions on access to product
distribution channels; increased competition; and the ability to attract and
retain personnel. These forward-looking statements are made only as at the
date of this announcement and, save where required in order to comply with the
Listing Rules, there is no obligation on Friends Provident Group plc to update such
forward-looking statements.
- We are holders of a large number of industry awards, showing continued
recognition of the quality of our products and service:
Service
- SimplyBiz Awards 2009. Best Overall Service
- FTAdviser.com - Online Service Awards 2008. Friends Provident received
the 4 Star award for Life & Pensions Provider
- Money Marketing Financial Services Awards 2008. Friends Provident came
3rd in the category of Company of the Year
eBusiness
- Investment Life & Pensions Moneyfacts 2008 Awards. Winner of Best
Online Service
- FTAdviser.com - Online Service Awards 2008. Friends Provident received
the 5 Star award for Investment Providers and Packagers
- Financial Technology Research Centre - e-Excellence Ratings 2009. Friends
Provident received numerous Triple E ratings: Individual Pensions, Group
SIPP, Life Protection, Critical Illness, Income Protection, Protection Menu,
CIMP and Group Personal Pensions including Stakeholder for both new and
existing business
Pensions
- Incisive Media - Gold Standard Awards 2008. Friends Provident won the
Group Pensions category
- European Pensions Awards 2009. Friends Provident was awarded Pension
Provider of the Year
- Professional Pensions UK Pensions Awards 2009. Friends Provident won DC
Provider of the Year
Protection
- Online Finance Awards 2008. Friends Provident was awarded Best Online
Protection Provider
- Incisive Media Gold Standard Awards 2008. Winner of Protection category
- Health Insurance Awards 2008. Friends Provident was named Best
Individual Income Protection Provider
Investments
- Investment Life & Pensions Moneyfacts 2008 Awards. Friends Provident
won award for Best Ethical Investment Provider
|
