Strong financial performance
Sustainable free surplus £331 million, up 10% (2012: £300 million)
Value of new business up 5% to £204 million (2012: £194 million), including 30% increase in the UK division
IFRS based operating profit before tax of £436 million, up 59% (2012: £274 million)
MCEV operating profit before tax of £489 million, up 28% (2012: £382 million)
Improved cash generation, strong capital base, increased dividend cover
Available shareholder assets £917 million
IGCA surplus £2.2 billion, coverage ratio 238%
Economic capital surplus( £3.9 billion, coverage ratio 193%
Full year dividend of 21.14 pence per share subject to shareholder approval (2012: 21.14 pence per share)
Full year dividend covered 1.1 times by sustainable free surplus (31 December 2012: 1.0 times)
Operational highlights
Successful restructuring of the business over the last three years is complete, £160 million of cost savings secured
Successful delivery of key 2013 financial targets
It is appropriate in this new phase to move away from a restructuring brand and therefore the Company will seek approval from shareholders to change the Company's name at the AGM to Friends Life Group Limited
Completion of circa £2 billion with-profits annuity reallocation
Investment mandates placed for commercial real estate and infrastructure loans
Strategic update
A leading scale player in the attractive UK Life and Pensions market, primarily focused on the fast growing retirement market and skilled management of closed books
Continued, disciplined focus on generation of cash and returns
Progressive dividend to be considered when sustainable free surplus coverage of the ordinary dividend exceeds 1.3 times
Major new strategic partnership with Schroders announced; £12.2 billion of equity and multi-asset funds to be managed on behalf of Resolution customers
The Company will seek approval from shareholders to change the Company's name to Friends Life Group Limited
Discussions regarding potential sale of Lombard are ongoing
Andy Briggs, Group Chief Executive said:
"The restructuring of the business is now complete. We have a sustainable business with a profitable base for future growth. We operate in attractive growth markets, focused on managing legacy life and pension products, and capturing value in the fast-growing retirement provision market. The Company continues to seek to maximise value from each part of the Group while retaining its focus on rigorous financial discipline. We remain focused on generating growth in both cash and returns while maintaining our strong capital base."
