Results round-up: Prudential, Antofagasta, TP ICAP, SIG

Boosted by double-digit growth in Asia and the weak pound, full year results from Prudential beat City forecasts for operating profits and its dividend.

IFRS operating profit for the year grew 7% to £4.26bn, beating the consensus forecast of £4.1bn, though at constant exchange rates profits would have fallen 2%.

The insurance and savings group generated an underlying free surplus of £3.59bn, up 18% at reported exchange rates or 10% at CER, and made a life new business profit of £3.09bn, up 24% or 11% at CER.

With cash remittances growing 6% to £1.7bn, the board hiked the full year ordinary dividend 12% to 43.5p per share.

City analysts were expecting a dividend of 41.6p.

Asia, in delivering a seventh consecutive year of double-digit growth in new business profit, IFRS operating profit and capital generation, was the engine of growth.

In the fourth quarter, eight of Prudential's markets grew by more than 20% and for the full year, new business profit across the region increased by 22% to £2.03bn, operating profit by 15% to £1.64bn and free surplus generation grew 15% to £859m.

In the US and in the UK, chief executive Mike Wells said business remained "well positioned to navigate a period of significant regulatory change".

Summing up 2016, he said: "Prudential has delivered a strong financial performance in 2016. In a year that has seen continued low interest rates, market volatility and dramatic political change, our results continue to benefit from the scale and diversity of the group's global platform, the disciplined execution of our strategy and the strength of the opportunities in our target markets."

Clouds among the silver linings included a 4% fall in the M&G investment business's operating profit due to net fund outflows.

Antofagasta

Higher metals prices and lower cash costs helped push full year earnings before interest, tax, depreciation and amortisation at Antofagasta up 78.7% to $1.6bn.

Group revenue in 2016 was $3.62bn, up 12.3% higher than in 2015. The final dividend for the year is 15.3 cents a, bringing the total dividend for the year to 18.4 cents.

Group copper production in 2017 is expected to be in the range of 685,000 - 720,000 tonnes, similar to the 709,400 tonnes produced in 2016.

"This year has started strongly following the upturn in the last quarter of 2016, bolstered by the continued improvement in sentiment towards copper and the production problems at some of the world's largest copper mines," the company said.

"It seems that there is now a reflationary environment and this is positive for commodities. As many continue to adjust their forecasts for China, the group is confident that consumption there will continue to grow as they support their power and infrastructure requirements."

"The higher level of mine disruptions experienced since the beginning of the year should keep pressure on refined copper availability and support the fundamentals for copper in the months to come. As a result, the Group does not foresee copper returning to the lows of 2016."

TP ICAP

TP ICAP said it almost halved full year reported pre-tax profits, reflecting the costs of the merger between Tullet Prebon and ICAP's voice broking unit last year.

Profit before tax fell to £56.8m from £105.7m. Revenue rose to to £891m from £796m. Underlying operating profit rose to £131.5m from £107.9m.

Chief executive John Phizackerley said there had been “tentative signs of greater activity in the second half of the year”.

"In the second half of the year also witnessed an improved performance in our heritage businesses, in particular interest rates, credit and FX which have been subdued for some time. In addition, energy & commodities, equities and information sales recorded strong year on year revenue growth," he said.

Revenue in the first two months of 2017, on a pro forma basis (including the prior period results of ICAP), was in line with the same period last year at constant exchange rates, and 11% higher as reported, TP ICAP said.

The company added that it expected to manage more client relationships from within the Eurozone after the UK's decision to leave the European Union.

“There are material implications for financial markets between the so called 'soft' or 'hard' Brexit outcomes,” TP ICAP said.

SIG

Specialist building products distributor SIG posted its results for the 2016 calendar year on Tuesday - at the same time confirming Meinie Oldersma as its new group chief executive.

The FTSE 250 firm said revenue rose 11.2% during the year to £2.74bn, though that increase was only 4.4% when measured using constant currencies.

Underlying operating profit was down 8.6% to £91.3m, or down 14.9% at constant currencies, while underlying profit before tax fell 12.5% to £77.5m, or 19% at constant exchange rates.

SIG’s underlying basic earnings per share were 1.6p lower at 9.7p.

The board said cash inflow from trading during the year was broadly in line with 2015, falling 0.9% to £98.9m from £99.8m.

Return on capital employed, post-tax, was 9.4% - falling from 11.5% in 2015.

“We have delivered underlying profit before tax in line with our previously stated range, but we are disappointed with the overall financial performance of the group in 2016,” said interim chief executive Mel Ewell.

“Although the board believes that the group's strategic direction is correct, implementation has proved challenging.

“Accordingly, since November we have slowed or stopped a number of internal initiatives, which will allow our team to refocus on customers and sales growth in order to generate cash and improve ROCE.”