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INTERIM RESULTS July 2013 PowerPoint Presentation
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INTERIM RESULTS July 2013

INTERIM RESULTS July 2013

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INTERIM RESULTS July 2013

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  1. INTERIM RESULTS July 2013

  2. DAVID BELLAMY Chief Executive

  3. Agenda Business UpdateDAVID BELLAMY FinancialsANDREW CROFT Outlook DAVID BELLAMY Q&A

  4. APE (Annual premiums plus 10% of single premiums) Total new business by quarter

  5. APE (Annual premiums plus 10% of single premiums) Total new business by quarter

  6. Single investment by quarter

  7. Net inflows (£bn)

  8. Funds under management 18% p.a compound growth over the last5 years and 20% p.a over 10 years (at June 2013) +15% £39.9 +22% +6% +26% +31% +18% -10% +25% +29% +20% +34% June

  9. Five strong years of Partner recruitment +6.5% +8.4% +6% +6% +9% +7%

  10. New business results • New business up 21% • New single investments of £3.5 billion (up 28%) • Net inflows £2.0 billion (up 32%) • FUM £39.9 billion (up 15% ytd) • Partnership 1,905 (up 6.5% ytd) • Interim dividend up 50%

  11. ANDREW CROFT Chief Financial Officer

  12. First half profit drivers • New business growth of 21% (28% excluding last year large group pension scheme) • Favourable business mix – manufactured up 24% • Careful management of expenses • Continued strong retention • Very strong investment returns

  13. Reinsurance treaty • New treaty entered into by UK life company • Removes remaining insurance and persistency risk of closed Protection book • Positive post-tax benefit of £18.3 million in the cash result • Release of prudent solvency reserves and realisation of the capitalised value of expected future margins • Neutral in EEV • Small IFRS pre-tax benefit of £8.9 million

  14. Capital losses • Value placed on capital losses within group now capable of being utilised • £38.4 million deferred tax asset in IFRS result • £32.0 million positive experience variance in EEV result • Benefit to be realised in cash result over medium term

  15. Changes in respect of adviser charging • New rules have changed nature of certain cash flows • Loss of tax relief on the adviser charge which reduces the new business margin • Acceleration of cash earnings on certain pension business reducing new business strain

  16. Analysis of EEV operating profit

  17. Analysis of EEV operating profit

  18. Analysis of EEV operating profit

  19. Analysis of EEV operating profit

  20. Analysis of EEV operating profit

  21. Analysis of EEV operating profit

  22. Analysis of EEV operating profit

  23. Analysis of EEV operating profit

  24. Analysis of EEV pre-tax result

  25. Analysis of EEV pre-tax result

  26. EEV post-tax result

  27. EEV post-tax result

  28. EEV post-tax result

  29. EEV post-tax result

  30. EEV net asset value per share

  31. Pre-tax IFRS

  32. Pre-tax IFRS

  33. Pre-tax IFRS

  34. Pre-tax IFRS

  35. IFRS post-tax result

  36. IFRS post-tax result

  37. IFRS post-tax result

  38. IFRS post-tax result

  39. Analysis of post-tax cash result

  40. Analysis of post-tax cash result

  41. Analysis of post-tax cash result

  42. Analysis of post-tax cash result

  43. Underlying cash

  44. Return on in force • c£12.2 billion of new business added in last six years, which is not yet generating positive cash earnings* • Over £91.0 million of post tax cash earnings per annum in future* * Ignores stock net movements and out flows

  45. Underlying cash

  46. Underlying cash

  47. Underlying cash

  48. Dividend Maturing FUM = Increasing emergence of cash Increasing emergence of cash = Increasing dividend

  49. Dividend • Interim dividend to increase by 50% • Expect a similar increase in the full year dividend • Thereafter dividend to progressively grow in line with the underlying performance of the business

  50. Investment programme • Need to invest to accommodate future growth and achieve efficiency savings • Major systems development costs will be borne by outsourced provider • We will have internal project costs over the next couple of years • Estimate of £5.0 million cost in 2013 • Internal expenditure covered by cash released from reinsurance treaty