18th Mar 2014 14:35
LONDON (Alliance News) - Resolution Ltd, which operates the Friends Life brand, Tuesday declared its three-year restructuring complete and said it will change its name to Friends Life Group Ltd, as its annual pretax profit from continuing operation increased by more than five times.
Resolution also said it has entered a new strategic partnership with Schroders PLC, which will now manage GBP12.2 billion of equity and multi-asset funds on behalf of Resolution customers. The funds were previously managed by F&C Asset Management PLC, which has faced pressure on such strategic partner revenue of late, with a shareholders' vote on Bank of Montreal's GBP708 million takeover offer set for March 25.
Maintaining its full-year dividend at 21.14 pence, Resolution said it will consider increasing its dividend if its coverage ratio improves.
Resolution shares were Tuesday quoted down 5.5% at 352.8 pence, the biggest loser in the FTSE 100.
Resolution Ltd reported a GBP369.0 million pretax profit from continuing operations in 2013, compared with GBP66.0 million in 2012. Revenue declined by 1.0% to GBP10.99 billion as claims, benefits and expenses fell by 3.5% to GBP10.64 billion.
Value of new business rose to GBP204 million from GBP194 billion, while sustainable free surplus increase to GBP331.0 million from GBP300.0 million.
Chief Executive Andy Briggs declared the company's three-year restructuring complete.
"We have a sustainable business with a profitable base for future growth. We operate in attractive growth markets, focused on managing legacy life and pension products, and capturing value in the fast-growing retirement provision market. The company continues to seek to maximise value from each part of the group while retaining its focus on rigorous financial discipline. We remain focused on generating growth in both cash and returns while maintaining our strong capital base," Briggs said in a statement.
Resolution said discussions regarding the potential sale of its Luxembourg-based life assurance business, Lombard International Assurance, which offers wealth management services to high-net-worth individuals, are ongoing.
Resolution was originally set up for consolidation in the life insurance sector, buying Friends Provident Group in 2009, the majority of the AXA UK life insurance business during 2010 and in 2011 completed the UK Life Project with the acquisition of Bupa Health Assurance.
It has since abandoned its acquisition strategy, instead concentrating on increasing shareholder value.
By Samuel Agini; [email protected]; @samuelagini
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