Partnership Assurance (PA.) only floated in June and shares in the life assurer fell nearly 6 per cent on the back of these maiden half-year results - which revealed a big tumble in headline profits. That markdown, however, is a little harsh given that much of the decline reflected costs associated with the flotation and higher interest charges. In fact, half-year operating profit rose 31 per cent year on year to £59.3m, and total new business premiums grew 12 per cent to £631m.
The group's business model differs from other life assurers in that it concentrates exclusively on providing enhanced annuities, while around 70 per cent of its liabilities are placed with reinsurers - that reduces its regulatory capital requirements.
First-half trading was boosted by an increase in yields on fixed-income securities, which helped to improve annuity rates. However, there was some disruption from the implementation of the retail distribution review (RDR) and the introduction of gender-neutral pricing - normal market activity levels were only resumed late in the first half. Even so, new business premiums for retirement annuities still rose 16 per cent to £601.5m. But a lack of clarity relating to government policy on social care provision led to a 38 per cent drop in sales of care annuities, to £28m.
Panmure Gordon is forecasting full-year EPS of 17.5p, rising to 31.7p in 2014.
| PARTNERSHIP ASSURANCE (PA.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 435p | MARKET VALUE: | £1.74bn | |
| TOUCH: | 431-435p | 12-MONTH HIGH: | 540p | LOW: 420p |
| DIVIDEND YIELD: | nil | PE RATIO: | 31 | |
| NET ASSET VALUE: | 135p* | EMBEDDED VALUE: | 116p | |
| Half-year to 30 Jun | Gross premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 567 | 17.4 | 5.00 | nil |
| 2013 | 586 | 8.56 | 1.00 | nil |
| % change | +3 | -51 | -80 | - |
Ex-div: na Payment: na *Includes intangible assets of £139m, or 35p a share | ||||
