Results for the half year ended 30 June 2013
Strong financial performance and improving cash generation
Sustainable free surplus £147 million, up 23% (30 June 2012: £120 million)
IFRS based operating profit before tax of £191 million (30 June 2012: £163 million)
IFRS based operating earnings per share up 17% to 13.26 pence (30 June 2012: 11.32 pence)
MCEV operating profit before tax of £214 million (30 June 2012: £235 million) reflects expected impact of long-term interest rate environment
Strong capital base underpins dividend
Available shareholder cash £839 million (31 December 2012: £850 million)
Group IGCA surplus £2.1 billion, coverage ratio 222% (surplus at 31 December 2012: £2.2 billion, 221% coverage ratio)
Economic capital surplus £3.7 billion, coverage ratio 192% (surplus at 31 December 2012: £3.5 billion, 194% coverage ratio)
Interim dividend of 7.05 pence per share (30 June 2012: 7.05 pence per share)
Improving new business performance
Strong growth in UK division; value of new business of £89 million, up 41% and at an IRR of 16.7%
International division core value of new business £21 million (30 June 2012: £22 million) reflecting resilient performance in difficult markets
Total Group VNB £97 million; Group new business IRR of 11.2%; Group margin increased to 2.8%
Operating highlights
Successful recapture of an additional £7 billion of assets by in-house asset manager FLI
Corporate Benefits performance exceeds expectations with 30% increase in VNB, strong pipeline of new schemes and auto-enrolling clients for the rest of the year
£154 million of cost savings secured at 30 June 2013 (96% of 2015 target)
Good progress made on delivering the International strategy with controlled exit from German manufacturing to be completed in third quarter 2013 and all other non-core exit actions completed
Andy Briggs, Group Chief Executive said:
"We continue to make excellent operational progress in line with the clear and consistent strategy and value agenda of the Group. The strong performance announced today reflects the attractive strategic outlook of the Group and has been led by the UK division where higher value of new business has been written at a lower cash cost. We have continued to deliver cash from our Heritage division and made good progress on International strategy implementation. This financial discipline underpins strong growth in cash generation and I remain confident about the future prospects of the Group."
