Prudential (PRU) chief executive Mike Wells remained tight-lipped on any further details surrounding the de-merger of the UK and European business, other than the life-assurer was making “good progress” on the process. However, judging by these first-half results the rationale continues to make sense, with Asia driving a 13 per cent rise in life new business profit and 6 per cent growth in underlying cash generation for the life and asset management businesses.
Despite a 4 per cent fall in new annual premium equivalent (APE) sales at constant currencies for the Asian life operations, initiatives on pricing and priority given to the regular premium health and protection business meant that new business profits were up 11 per cent to £1.12bn. However, asset management arm Eastspring Investments reported external net outflows of £0.9bn – excluding money market funds – as modest retail net inflows were offset by higher institutional bond redemptions.
In the US, sales of variable annuities continued to suffer due to uncertainty over the implementation of government reforms to retirement advice, declining 3 per cent. However, rising interest rates and tax reform benefits helped lift new business profit 17 per cent to £466m. The UK and Europe segment also looks in good shape ahead of the de-merger, with life APE new business sales up 7 per cent and M&G gaining net external inflows of £3.5bn.
Bloomberg analysts are forecasting a consensus adjusted EPS of 150.8p for the December 2018 year-end.
| PRUDENTIAL (PRU) | ||||
| ORD PRICE: | 1,740p | MARKET VALUE: | £ 45.1bn | |
| TOUCH: | 1,739.5-1,740.5p | 12-MONTH HIGH: | 1,993p | LOW: 1,701p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 613p* | SOLVENCY II RATIO: | 209% | |
| Half-year to 30 Jun | Gross premiums (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 22.1 | 2.21 | 58.7 | 14.50 |
| 2018 | 21.3 | 1.73 | 52.7 | 15.67 |
| % change | -4 | -22 | -10 | +8 |
| Ex-div: | 23 Aug | |||
| Payment: | 27 Sep | |||
| *Includes intangible assets of £13bn, or 501p a share | ||||
