Half-year figures from life assurer Resolution (RSL) were again clouded by one-offs, but the underlying picture revealed an increase in IFRS-based operating profit - from £163m to £191m. Much of that reflected a significant reduction in the new business strain (the cost of writing new business) - from £41m to £15m - as well as a 41 per cent increase to £89m in the value of new UK business.
The Heritage business, which comprises corporate benefits, protection and retirement income business, continued to be the group's cash engine - sustainable free surplus cash generation rose from £160m to £182m there. Overall, the group's sustainable free cash surplus rose 23 per cent to £147m. And while operating profits from the UK and Heritage businesses fell from £137m to £129m, this was mainly because a number of the positive one-off items recorded last year were not repeated.
On an embedded value basis, which includes a measure of future cash flows, operating profits fell from £235m to £214m. Lower investment returns were offset by continued growth in new business, but profits from the international division fell from £43m to £21m - as a result of lower new business and the impact of a strategic review of operations in Germany.
Broker RBC Capital Markets expects full-year IFRS operating EPS of 22.4p (19.8p in 2012) and embedded value of 417p a share.
| RESOLUTION (RSL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 328p | MARKET VALUE: | £4.65bn | |
| TOUCH: | 327-328p | 12-MONTH HIGH: | 343p | LOW: 202p |
| DIVIDEND YIELD: | 6.4% | PE RATIO: | 97 | |
| NET ASSET VALUE: | 392p* | EMBEDDED VALUE: | 422p | |
| Half-year to 30 Jun | Gross life premiums (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 0.98 | -133 | -5.37 | 7.05 |
| 2013 | 1.04 | 347 | 3.17 | 7.05 |
| % change | +6 | - | - | - |
Ex-div: 4 Sep Payment: 4 Oct *Includes intangible assets of £4.12bn, or 290p a share | ||||
