Interims 2010 Julian

 

 

"We are very pleased with our performance in the first half of 2010. Our operating results were substantially ahead of the comparative period with strong sales performance particularly in the South African retail markets and in Wealth Management.


We are driving change throughout the Group and are making good progress on our strategy to simplify the Group and improve financial performance. We are today announcing the sale of US Life to Harbinger and we are also on track to deliver on our cost reduction and return on equity targets.


We are confident about the outlook for the full year although market uncertainties remain."

Julian Roberts - Group Chief Executive
View the Interim Results Announcement

Highlights

Continued strong performance in the first half of 2010

  • Adjusted operating profit before tax (IFRS basis) up 43%, improved product mix and tight focus on cost management
    • Profits up in all businesses, particularly strong in Wealth Management
    • Strong profit improvement in Mutual & Federal and US Asset Management
  • APE sales up 28% to £814 million, momentum from Q4'09 continued in H1'10 for the Long-term Savings (LTS) Division
    • Rapid rise in sales on the UK platform, APE sales up 145%
    • UK pension sales up 66%, mutual funds doubled and ISA's up 116%
    • South Africa APE sales up 17%, savings products up 18% with strong single premiums growth in Retail Affluent
  • Unit trust sales up 43% to £4.6 billion
  • Net client cash flows negative overall
    • Inflows of £2.8 billion in LTS, Wealth Management contributed £2.3 billion
    • Outflows of £5.2 billion in US Asset Management
  • Funds under management up 3% from 31 December 2009
  • Resilient performance in Nedbank but markets remain tough

Robust financial position

  • FGD surplus increase to £1.7 billion at 30 June 2010 (£1.5 billion at 31 December 2009)
  • Increase in IFRS book value to 154p per share; MCEV 166.6p per share at 30 June 2010
  • Board declaring 1.1p interim dividend for 2010 with scrip alternative

Good progress on financial targets

  • Run-rate cost savings of £42 million delivered to date against target of £100 million by 2012
  • On track for 2012 return on equity target of 16%-18% for LTS business (excluding US Life)

Sale of US Life operations

  • Sale to Harbinger Capital Partners for $350 million
  • Transaction lowers Group risk profile