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Standard Life buoyed by investment book

Standard Life enjoyed a solid performance that saw IFRS operating profit rise from last year's £166m to £182m. That reflected increased fee and commission income - from £314m to £359m - thanks in part to a 5 per cent rise in assets under administration to £179bn, with net inflows rising from £3.1bn to £5.3bn. The picture was also transformed by the investment book's performance having recovered - the net return reached £2.86bn from just £5m last year.

Operating profits on a European embedded value (EEV) basis, which includes an element of projected premium income, rose 11 per cent year-on-year to £364m. The core element of operating profits rose 41 per cent to £336m, partly reflecting a sharply higher contribution of £161m from new business. The turnaround from last year was particularly pronounced in the UK, where an EEV pre-tax loss of £45m was turned into a profit of 357m, largely due to a much improved investment return.

On an IFRS basis, UBS expects a full-year pre-tax profit of £230m and EPS of 8p (2009:£204m/7.35p).

STANDARD LIFE (SL.)
ORD PRICE:209pMARKET VALUE:£4,723m
TOUCH:208-209p12-MONTH HIGH:237pLOW: 170p
DIVIDEND YIELD:5.9%PE RATIO:11
NET ASSET VALUE:161pEMBEDDED VALUE:301p

Half-year to 30 JunGross premiums (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20091.67-66.0-2.44.15
20101.664338.94.35
% change-1--+5

Ex-div:18 Aug

Payment:19 Nov

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More analysis of company results

IC View

Standard Life has delivered a decent first-half performance and the yield certainly looks tasty. Still, the group remains focused on fairly mature markets, such as in the UK, where long-term growth prospects may be modest. While the shares, even though they trade well below embedded value, are also rated on a hefty 26 times expected earnings - compared with a peer group average of nearer 15 times. Fairly priced.

Last IC view:Fairly priced, 204p, 10 March 2010

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