20th Feb 2015 11:01
LONDON (Alliance News) - Edinburgh-based Standard Life PLC Friday reported a 19% rise in operating profit before tax from continuing operations in 2014, bolstered by rising assets under administration on the back of net inflows, positive market movements, and the acquisition of Ignis Asset Management.
The group had a busy 2014, acquiring Ignis from Phoenix Group Holdings for GBP390 million in March and agreeing to dispose of its Canadian operations to Manulife Financial Corp for CAD4.0 billion, which will result in a GBP1.75 billion return to shareholders, further emphasising the long-term savings and investments provider's transformation since it demutualised back in 2006.
Standard Life's operating profit before tax from continuing operations amounted to GBP604 million in 2014, beating the GBP559 million consensus forecast figure provided by the company and supporting a 7.8% rise in its annual dividend to 17.03 pence.
Assets under administration from continuing operations increased by 38% to GBP296.6 billion, supported by GBP60.5 billion of assets acquired with Ignis as well as GBP20.4 billion of positive market movements and net inflows of GBP1.0 billion.
Chief Executive David Nish said the group made strategic progress in 2014, with the acquisition of Ignis and the disposal of the Canadian operations increasing its focus on fee business, where revenue increased by 14% to GBP1.43 billion.
Nish also said that Standard Life is "well positioned" for big changes to savings and retirement income rules in the UK, after the government introduced new rules giving more freedom to individuals over what they do with their pension pots.
Standard Life noted the "significant reduction" in demand for individual annuities and said it expects, in 2015, the contribution from annuity new business to shrink by between GBP10 million and GBP15 million and the contribution from asset liability management to reduce by between GBP30 million and GBP40 million.
The company said it has responded to the regulatory changes by developing alternatives to annuities and launching a UK-wide financial advice business earlier this month. The group has already been one of those to benefit from the UK's steps to implement auto-enrolment, under which people are automatically signed up to corporate pension plans.
Within Standard Life Investments, assets under management increased by 45% to GBP245.9 billion, boosted by Ignis.
"Although investment markets are unsettled and may affect the near-term pace of asset and revenue growth, we are very well placed for the future. We have an excellent track record of succeeding in evolving markets and have the products, experience and proven investment performance to help our customers and clients in all of our markets to save and invest, so that they can look forward to their financial futures with confidence," Nish said.
Standard Life shares are the top performer in the FTSE 100 index of blue chips late morning Friday, up 2.8% at 420.20 pence.
By Samuel Agini; [email protected]; @samuelagini
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