YOU could forgive Standard Life’s management for being more than a little disgruntled yesterday. The life insurer delivered a robust set of results, with embedded enterprise value (EEV) operating profit up 11 per cent to £364m, and International Financial Reporting Standards operating profit up 10 per cent to £182m.
New business growth was reassuringly strong at 29 per cent and inflows at Standard Life investments were up 52 per cent, bringing third party assets under management to a record-breaking £63bn. Still, a bearish broker’s note from Panmure Gordon, which downgraded the shares from “buy” to “hold”, didn’t go down well with a febrile market: the stock closed off 3.6 per cent at 208.6p.
Sure, investors were probably a little disgruntled that cash flow grew by six per cent to £160m, while the interim dividend was hiked by a less impressive 4.8 per cent. And it would be nice to know what the life insurer plans to do with its ever-growing £1.3bn cash pile.
But there is no doubt about it: these are good shares, with an impressive yield of 5.66 per cent, better than rivals like L&G (4.27 per cent) and Prudential (3.41 per cent). And the long-term outlook is good for life insurers, as people in the UK put aside more for their retirement to cope with the ever-worsening pensions landscape. Sure, the stock – like its peers –?has had a good run of late, meaning some are going to take profits. But investors could make more if they stick by Standard Life.