Restructuring costs relating to the 2014 acquisition of Ignis as well as other administrative expenses suppressed pre-tax profit for life assurer Standard Life (SL.) during the first half. Still, operating profit from continuing operations was up 6 per cent at £290m. While annuity sales have suffered following this year's retirement reforms, the group’s increased focus on its asset management arm is driving growth.
Operating profit for asset management business Standard Life Investments grew by half to £154m, as the acquisition of Ignis helped drive a 40 per cent increase in fee-based revenue. Assets under management were up 2 per cent to £250bn, while the business has also shifted more towards high-margin products such as mutual funds and multi-asset to further improve profits.
Unsurprisingly, net outflows for the group's older UK retail business - predominantly written before the company was demutualised - increased by 9 per cent to £1.2bn as customers took advantage of greater pension flexibility following this year's retirement reform, while annuity sales were also down. But the same reform also benefited its drawdown assets, which were up from £11.5bn to £12.9bn, and workplace pension changes lifted workers' contributions and thus net inflows for Standard Life from £0.9bn to £1.1bn.
Broker Canaccord Genuity downgraded its expected adjusted EPS for the full year from 24.4p to 17.5p, rising to 29.8p in 2016.
STANDARD LIFE (SL.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 441p | MARKET VALUE: | £8.7bn | |
| TOUCH: | 440.9-441.1p | 12-MONTH HIGH: | 506p | LOW: 364p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 41 | |
| NET ASSET VALUE: | 192p | Assets under administration: | £302bn | |
| Half-year to 31 May | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 (restated) | 6.16 | 332 | 8.3 | 5.60 |
| 2015 | 5.67 | 210 | 3.2 | 6.02 |
| % change | -8 | -37 | -61 | +8 |
Ex-div: 10 Sep Payment: 20 Oct | ||||
