Prudential profit up by a quarter
Prudential, the UK’s biggest insurer, has posted a better-than-expected 25 per cent rise in its first-half profit after its footprint in Asia delivered further strong growth.
Prudential made an operating profit of £1.06bn in the first six months of 2011, compared with £968m a year earlier and more than seven per cent ahead of consensus analyst forecasts.
Chief executive Tidjane Thiam said operating profit by both reporting measures IFRS and EEV had come in above £1bn for the first half, while cash generation also remained strong.
“We have continued to concentrate on the fast growing and highly profitable markets of South-East Asia,” he said.
“We expect to see continued, profitable and cash generative growth in the second half of 2011. We remain on course to deliver the 2013 profit growth and cash generation objectives.”
UBS analysts said the results were ahead of expectations in all its divisions, though the UK market had not performed as well as the others.
“The cash generative but low-growth UK operation lagged,” they said in a note.
But its fund management arm M&G Investments outperformed, raising its operating profits 41 per cent to £172m compared with 2010.
Its US-based Jackson business remitted £230m back to the group in the first half, already ahead of its target for 2013, it said.
“This is the most tangible evidence that the strategy we have been following at Jackson is working well as the progress made has translated into profits and more importantly, over time, into cash,” the Pru said in a statement.
Panmure Gordon analyst Barrie Cornes said this was a “hugely positive result” despite expecting no further remittance from Jackson in the second half of the year.
Prudential’s new business profit rose 20 per cent to £1.07bn. It gained 25 per cent to £2.03bn in the full year of 2010.