Don't worry too much about Standard Life's (SL .) apparently sedate 6 per cent half-year operating profit rise, to £307m - that largely reflects slippage in the Canadian business. More importantly, group new business sales rose 21 per cent and total assets under management grew by 7 per cent to £233bn.
The UK unit increased operating profit by an impressive 28 per cent to £161m and the business looks well placed to benefit from changes arising from the implementation of the retail distribution review (RDR) - which bans commission payments to advisers - and from pension auto-enrolment. Meanwhile, the Standard Life Investment arm boosted operating profit by 37 per cent to £93m. Buoyed by £7.1bn of net fund inflows, divisional third-party assets under management rose 7 per cent to £178.8bn and an impressive 92 per cent of funds outperformed their benchmarks in the year to June.
Still, there were headwinds. In Canada, operating profit slipped 17 per cent to £59m, reflecting a one-off reserving charge, and the European unit's profit fell 19 per cent to £21m. The small emerging markets business posted a £6m loss, although new business sales there did soar by 64 per cent to £210m.
Broker Oriel Securities expects full-year adjusted operating EPS of 24.5p (from 32.6p in 2012) and embedded value of 358.8p.
STANDARD LIFE (SL.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 372.4p | MARKET VALUE: | £8.85bn | |
| TOUCH: | 372.2-372.4p | 12-MONTH HIGH: | 422p | LOW: 245p |
| DIVIDEND YIELD†: | 4.0% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 174p | EMBEDDED VALUE: | 352p | |
| Half-year to 30 Jun | Gross life premiums (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 2.14 | 301 | 10.2 | 4.90 |
| 2013 | 2.02 | 281 | 5.5 | 5.22 |
| % change | -6 | -7 | -46 | +7 |
Ex-div: 11 Sep Payment: 29 Oct †Excludes full-year special dividend of 12.8p | ||||
