Results round-up
Prudential reported a better-than-expected increase in first half operating profit on Wednesday, driven by double-digit growth in Asia.
The insurance giant posted a 6% increase in operating profit to £2.06bn, beating analysts’ estimates of around £1.88bn.
Group APE new business sales also exceeded forecasts, rising 11% to £3.03bn compared to consensus expectations of £2.85bn, as stronger UK retail sales offset the company's withdrawal from the bulk annuity market.
The FTSE 100 company achieved a 10% rise in free surplus generation to £1.6bn and a 8% gain in new business profit to £1.26bn, despite the challenges of low interest rates, higher investment market volatility, reforms in the US labour market, a decline in annuity sales in the UK and the continuation of net outflows at the M&G asset management business.
Chief executive Mike Wells said the group’s performance was led by growth in Asia where operating profit grew 15% to £743m, ahead of the £725m forecast. Asia operating free surplus generation rose 15% to £419m and new business profit increased 20% to £824m.
In the US business, however, total operating profit fell 3% to £876m, reflecting the costs of winding down the Curian capital asset-management operation. Traditional variable annuity sales, excluding the Elite Access investment platform, dropped 22% due to elevated market volatility and significant uncertainty on the Department of Labor reforms.
A 4% increase in separate account assets to $138.9bn supported a 9% rise in fee business operating profit to £642m.
Shares in G4S surged on Wednesday after the security company reported a jump in earnings and revenue for the first half as it said it has made substantial progress with the ongoing transformation of the group and maintained its dividend.
In the six months to the end of June, earnings were up 43.8% to £69m as revenue grew 3.2% to £3.5bn. In the UK and Ireland, however, revenue dropped 1.9% to £563m.
G4S had restructuring costs of £3m in the period, down substantially from £16m the year before and the company declared an interim dividend of 3.59p per share, in line with 2015.
The group said it won new contracts with an annual value of £0.7bn, flat compared to the year before, while total contract value was also flat at £1.4bn.
Chief executive officer Ashley Almanza said: “Over the medium term we expect demand for our services to grow by around 4-6% per annum. In the current environment of heightened macro-economic uncertainty and lower global growth, our continuing businesses posted very strong revenue growth in the first half of 2016.