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Important note:
The information in this Media section is intended for use by journalists only and customers should not use it to make financial decisions. Please remember that information in past press releases may no longer be current.
The information in this Media section is intended for use by journalists only and customers should not use it to make financial decisions. Please remember that information in past press releases may no longer be current.
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News
11 August 2009
Friends Provident Group plc - Interim management report and results for the half-year ended 30 June 2009
A strong base for profitable growth
Financial highlights
- Life and pensions gross cash generated improved to £35 million (2008: £(19)m)
- IFRS underlying profit £38 million (2008: £13m)
- Dividend maintained; Interim dividend 1.3p per share (2008: 1.3p)
- EEV underlying profit £131 million (2008: £211m) and embedded value 124p per share (31 December 2008: 128p)
- First half new life and pensions business £319 million annualised premium equivalent (2008: £507m) with second quarter 15% up on first quarter
- Strong Insurance Groups Directive (IGD) surplus maintained, estimated at £0.9 billion at 31 July 2009 (31 December 2008: £0.85bn)
Operating highlights
- UK business restructure largely complete and targeted cost savings secured
- International businesses continue to have strong prospects with resilient profitability for Friends Provident International
- Demerger of F&C Asset Management plc (completed 3 July 2009)
Trevor Matthews, chief executive officer, said:
"We are excited by the prospects for our business as the foundation for Resolution's consolidation and restructuring strategy for the open businesses in the Life and Asset Management sectors. Resolution is supportive of our current strategy and turnaround plan.
"Our achievements over the last 18 months in reshaping and refocusing our business have placed us well to participate in industry consolidation and leverage our efficient infrastructure.
"We sum up our existing organic growth strategy in just four words: 'Fix UK, Build International'. To this end, we have secured our targeted cost savings and have created an efficient platform capable of handling significant new business volumes making us an attractive distribution partner both in the UK and overseas.
"Trading conditions remain tough. In the UK, the economic slowdown has reduced new business from increments and new members on our existing group pensions schemes, while the protection market remains subdued compared to recent years. We are making headway in new schemes on nil or funded commission terms but there are significant timelags, exacerbated by the recession, from participating in tenders to winning the schemes and seeing new business volumes come through. As expected, these lower volumes have an exaggerated effect on new business metrics, but that will reverse when volumes recover. Our International businesses produced resilient results against a tough economic backdrop worldwide.
"The demerger of our stake in F&C represented a further significant achievement and bolsters our already strong capital position."
Financial Summary
| Financial Summary | Half year ended 30 June 2009 | Half year ended 30 June 2008 |
|---|---|---|
| Cash | ||
| Life and pensions gross cash generated | £35m | £(19)m |
| Life and pensions net cash operating surplus | £23m | £10m |
| Shareholder cash outflow | £(7)m | £(121)m |
| Internal rate of return on new business (i) | 10.7% | 12.6% |
| Discounted cash payback on new business (i) | 14 years | 11 years |
| IFRS | ||
| IFRS underlying profit (i) before tax | £38m | £13m |
| IFRS loss before tax from continuing operations | £(102)m | £(221)m |
| Basic IFRS loss per share | (4.2)p | (2.6)p |
| IFRS net asset value per share excluding goodwill | 75p | 77p (iv) |
| EEV | ||
| Contribution from new business (i) | £30m | £67m |
| EEV underlying profit (i) before tax | £131m | £211m |
| Return on embedded value (i) (annualised) | 5.9% | 8.4% |
| Embedded value per share (ii) | 124p | 128p (iv) |
| Capital and dividend | ||
| IGD surplus capital resources (i) | £0.9bn(iii) | £0.85bn (iv) |
| Total shareholder return | (24)% | (34)% |
| Interim dividend per share | 1.3p | 1.3p |
(i) As defined within Appendix 4
(ii) Embedded value is stated on a pro forma basis, including an uplift of the net asset value attributable to F&C to the market value
(iii) As at 31 July 2009 (estimated)
(iv) As at 31 December 2008
- Ends -
View a PDF of the full press release (490k).
For further information please contact:
Journalists:
| Contact name | Company | Contact number |
|---|---|---|
| Nick Boakes | Friends Provident Group plc | +44 (0) 845 641 7814 |
| Peter Timberlake | Friends Provident Group plc | +44 (0) 845 641 7834 |
| Vanessa Neill | Finsbury Limited | +44 (0) 20 7251 3801 |
| Zoe Watt | Finsbury Limited | +44 (0) 20 7251 3801 |
Analysts:
| Contact name | Company | Contact number |
|---|---|---|
| Richard Everett | Friends Provident Group plc | +44 (0) 845 268 4111 |
| Chris Ford | Friends Provident Group plc | +44 (0) 845 641 7832 |
Ref: J077
Notes to Editors
1. There will be a conference call on these results for investors and analysts 2.30pm BST hosted by Trevor Matthews, CEO and Evelyn Bourke, CFO. Dial in telephone number +44 (0)20 3037 9157.
2. A recording of this call will be available for 7 days by dialling +44 (0)20 8196 1998 (access code 3849752#)
3. Presentation slides for this call will be available from 9.30am today on www.friendsprovident.com/presentations
4. For more information on Friends Provident including photos, awards, fast facts, presentations, and media contacts please visit the media section at www.friendsprovident.com/media
5. Financial reporting dates
| Financial Reporting Calendar | Date |
|---|---|
| Friends Provident Group plc Interim Management Statement and Quarter 3 2009 New Business Announcement | 27 October 2009 |
| Friends Provident Group plc Quarter 4 New Business | 28 January 2010 |
| Friends Provident Group plc 2009 Preliminary Results | 16 March 2010 |
| Friends Provident Group plc Interim Management Statement and Quarter 1 2010 New Business | 28 April 2010 |
| Friends Provident Group plc 2010 Half-year Results and Quarter 2 2010 New Business | 10 August 2010 |
| Friends Provident Group plc Interim Management Statement and Quarter 3 2010 New Business | 28 October 2010 |
6. Certain statements contained in this announcement constitute 'forward-looking statements'. Such forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements, from time to time, of Friends Provident Group plc, its subsidiaries and subsidiary undertakings or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include, among others, adverse changes to laws or regulations; risks in respect of taxation; unforeseen liabilities from product reviews; asset shortfalls against product liabilities; changes in the general economic environment; levels and trends in mortality, morbidity and persistency; restrictions on access to product distribution channels; increased competition; and the ability to attract and retain personnel. These forward-looking statements are made only as at the date of this announcement and, save where required in order to comply with the Listing Rules, there is no obligation on Friends Provident Group plc to update such forward-looking statements.
7. We are holders of a large number of industry awards, showing continued recognition of the quality of our products and service:
Service
- SimplyBiz Awards 2009. Best Overall Service
- FTAdviser.com - Online Service Awards 2008. Friends Provident received the 4 Star award for Life & Pensions Provider
- Money Marketing Financial Services Awards 2008. Friends Provident came 3rd in the category of Company of the Year
eBusiness
- Investment Life & Pensions Moneyfacts 2008 Awards. Winner of Best Online Service
- FTAdviser.com - Online Service Awards 2008. Friends Provident received the 5 Star award for Investment Providers and Packagers
- Financial Technology Research Centre - e-Excellence Ratings 2009. Friends Provident received numerous Triple E ratings: Individual Pensions, Group SIPP, Life Protection, Critical Illness, Income Protection, Protection Menu, CIMP and Group Personal Pensions including Stakeholder for both new and existing business
Pensions
- Incisive Media - Gold Standard Awards 2008. Friends Provident won the Group Pensions category
- European Pensions Awards 2009. Friends Provident was awarded Pension Provider of the Year
- Professional Pensions UK Pensions Awards 2009. Friends Provident won DC Provider of the Year
Protection
- Online Finance Awards 2008. Friends Provident was awarded Best Online Protection Provider
- Incisive Media Gold Standard Awards 2008. Winner of Protection category
- Health Insurance Awards 2008. Friends Provident was named Best Individual Income Protection Provider
Investments
- Investment Life & Pensions Moneyfacts 2008 Awards. Friends Provident won award for Best Ethical Investment Provider
Important
- This news service is for information purposes only and does not provide any form of advice, recommendation or financial promotion. Any opinions expressed by third parties are those of the third party concerned and not of Friends Provident. Friends Provident does not accept liability for any errors or omissions or for loss incurred because of reliance on information or opinions given.
- The content of the news items set out above are accurate only as of the date of issue and Friends Provident does not undertake any obligation to update them.