Life assurer Prudential (PRU) delivered a "strong and broad-based performance" at the half-year stage, according to chief executive Tidjane Thiam. Indeed, operating profit jumped 17 per cent to £1.52bn (after adjusting for the strong pound), which helped push the shares up nearly 3 per cent on the day the figures appeared.
Prudential's Asian market saw new business sales rise 13 per cent (in constant currencies), driven by demand from the region's fast-growing middle class. Underlying operating profit there grew 19 per cent, too, to £525m. Moreover, America's legion of retiring baby-boomers helped the US operation, Jackson Life, to grow underlying new business sales by 18 per cent. Meanwhile, US operating profit (in constant currencies) jumped 28 per cent to £686m.
In the UK, however, Budget day reforms scrapping the compulsory purchase of annuities did deliver a £29m profit hit as retail annuity sales slumped 43 per cent. However, Prudential's strength in bulk annuities more than compensated - that contributed £60m to profits - and the UK unit overall saw operating profit rise 10 per cent to £374m. Strong sales of such offerings as with-profit bonds and income drawdown products helped UK new business sales to jump 22 per cent.
Prior to these figures, JP Morgan Cazenove was expecting full-year EPS of 88.6p (52.9p in 2013), with embedded value (EV) of 1,068p a share.
PRUDENTIAL (PRU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,373p | MARKET VALUE: | £35.2bn | |
| TOUCH: | 1,372-1,373p | 12-MONTH HIGH: | 1,440p | LOW: 1,078p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 414p* | EMBEDDED VALUE: | 1,009p | |
| Half-year to 30 Jun | Gross premiums (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 14.8 | 0.51 | 14.3 | 9.73 |
| 2014 | 16.2 | 1.42 | 45.0 | 11.19 |
| % change | +9 | +178 | +215 | +15 |
Ex-div: 20 Aug Payment: 25 Sep *Includes intangible assets of £7.6bn, or 298p a share | ||||
