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Prudential – IFRS operating profit of £2954 million in 2013

Prudential plc has announced a 17% growth of its calendar 2013 profits to £2,954 million. Announcing the results on 12th March,  Group Chief Executive Tidjane Thiam was able to report that all six ‘Growth and Cash’ objectives, set in 2010, had been achieved along with the successful creation of new markets across the globe.

Those six objectives

·       Asia IFRS operating profit £1075 million (+16%, more than double 2009)

·       Asia EEV new business profit £1460 million (+15%, more than double 2009)

·       Asia net full year cash remittance £400 million (+17%, 2013 target £300 million)

·       Jackson full year cash remittance £294 million (2013 target £260 million)

·       UK full year cash remittance £355 million (2013 target £350 million)

·       Cumulative net remittances to Group £4.6 billion (2013 target £3.8 billion)

Substantial investment has also been made in four new markets – Cambodia, Ghana, Myanmar (formerly Burma) and Poland, whilst an opportunity in Saudi Arabia is being actively pursued.

Further performance highlights

·       IFRS operating profit £2954 million (+17%)

·       Underlying free surplus generation £3099 million (+15%)

·       Net remittances from business units £1341 million (+12%)

·       EEV new business profit £2843 million (+16%)

·       US IFRS operating profit £1302 million (+30%)

·       M&G record IFRS operating profit £395 million (+23%)

Capital & Dividend

·       IFRS shareholders’ funds £9.7 billion (-7%)

·       EEV shareholders’ funds £24.9 billion (+11%, = 971 pence/share)

·       IGD capital surplus £5.1 billion (estimated); 2.8x solvency requirements

·       2013 full year dividend +15%, 33.57 pence/share

 “The Group has delivered a strong performance in 2013,” Mr Thiam commented. “Our focus on three long-term opportunities – the protection and savings needs of the growing Asian middle class, the transition into retirement of American ‘baby-boomers’ and the needs for savings and income in retirement of an ageing UK population – and our discipline have allowed us to navigate successfully the 2009-2013 period, which was not without its challenges following one of the most severe financial crises ever.”

 

Prudential’s recent focus on its Asian, UK and US markets has delivered profitable growth and increased cash generation, and these results, according to Mr Thiam, “are only possible because we provide customers with products and services of value to them.”

 

In Asia, these include family health and protection products at an affordable price in markets with limited social safety nets. The Prudential’s range of variable annuities in the US provides income to those living in the world’s largest retirement market, whilst the company’s 165 year tradition of providing savings and protection to UK policyholders whatever the prevailing economic conditions remains as valid as ever.

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