A strong set of results from Prudential (PRU) were inevitably overshadowed by the departure of chief executive Tidjane Thiam. How much does the market value the man quitting the Pru? Shares in Credit Suisse, where he is to take the helm, rose 7 per cent on the day, while Prudential's were down nearly 3 per cent. Broker Deutsche Bank urged investors to take advantage of the fall, pointing to the strength of the group's divisional heads. Of these, US chief Mike Wells is the heir apparent.
There are plenty of reasons to cheer last year's figures. Operating profit rose 14 per cent to £3.2bn at constant currencies. This was once again driven by the group's Asian operations, where operating profit was up 17 per cent at £1.1bn (although the growth reduced to 6 per cent at actual exchange rates). The renewal of its 'bancassurance' partnership with Standard Chartered (STAN) in July underpinned a 33 per cent second-half increase in 'annual premium equivalent' sales (the insurer's preferred measure of the current value of new premiums). This partnership means Prudential's life insurance products are sold exclusively through Standard Chartered's branches.
The group was also buoyed by growing funds under management at its various investment arms. Funds at the Pru's Asian asset manager, Eastspring Investments, rose 28 per cent to £77.3bn, while assets at M&G Investments swelled 8 per cent to £264bn. This led to the fifth consecutive year of record profits for the UK manager, fuelled by positive sentiment in equity and bond markets as well as increased inflows from continental Europe.
In the UK life business, seven bulk annuity deals - where the company insures a section of an employer's pension obligations in return for a premium - more than offset the damage caused by last year's Budget to individual annuity sales.
Broker Deutsche Bank expects EPS of 111p this year.
| PRUDENTIAL (PRU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,620p | MARKET VALUE: | £42bn | |
| TOUCH: | 1,619-1,621p | 12-MONTH HIGH: | 1,687p | LOW: 1,223p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 460p | EMBEDDED VALUE: | 1,136p | |
| Year to 31 Dec | Gross premiums (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 24.6 | 2.10 | 56.7 | 23.90 |
| 2011 | 25.7 | 1.80 | 55.8 | 25.20 |
| 2012 | 29.1 | 3.10 | 85.1 | 29.19 |
| 2013 | 30.5 | 2.08 | 52.8 | 33.57 |
| 2014 | 32.8 | 3.15 | 86.9 | 36.93 |
| % change | +8 | +51 | +65 | +10 |
Ex-div: 26 Mar Payment: 21 May | ||||
