Standard Life Shares

StevieJ

For info.

http://business.timesonline.co.uk/tol/business/columnists/article5014560.ece

sabretoothtigger

Standard Life reported a capital surplus of £3.5 billion, three times the size of Prudential’s. Goldman Sachs’s insurance team thinks it has changed little since then.

the FSA has toured British insurers saying they won’t be forced to sell equities to shore up their position.

it is impossible to think that Standard Life hasn’t lost heavily on investments recently. It was the biggest shareholder in Bradford & Bingley, for example.
Goldman Sachs is forecasting a 12% quarter-on-quarter decline in sales of self-invested pension plans when the company reveals new figures on Thursday

The company is trading on 99% of its enterprise value, making it one of the most expensive life insurers. It looks as though a British recession is yet to be priced in

sl is only on the market for 4bn or so afaik

whu

going south unfortunately - closed today at 177p!!

sabretoothtigger

Not good news, tomorrows results I guess will tell us if this fall is temporary or a sign of more to come.
Some consider sl overvalued, l&g is on a p/e of 5 and sl still at 9 so tomorrow will tell us whether the relative optimism in the price is right or wrong.

Im hoping as only a recent convert from mutuality, their strength remains. The main point I can see is that further falls are not unlikely despite trading down on the day below not only the ftse but the life insurance sector

FTSE 350 - LIFEINS (^NMX8570) vs SL vs FTSE100

Interim Results 06 August 2008
Improved net flows and sales

• Life and pensions net flows up 15% to £2.0bn
• Life and pensions PVNBP1 sales up 5% to £9.1bn
• New business contribution up 4% to £157m.

Strong growth in operating profits

• EEV operating profit before tax up 51% to £534m
• Return on embedded value up 1.9% points to 11.0%
• IFRS underlying profit before tax up 58% to £345m
• IFRS profit before tax attributable to equity holders up 219% to £201m.

Higher cash flow supporting a growing dividend

• EEV core capital and cash generation after tax up 25% to £143m
• Interim dividend of 4.07p, representing 7% growth

A balance sheet resilient to market falls

• Group Embedded Value per share 3% lower at 277p
• Financial Groups Directive surplus 3% lower at £3.5bn

Unless otherwise stated, all comparisons are in Sterling, all sales figures are on a PVNBP basis and all comparators are with the first six months of 2007.
Group Chief Executive Sandy Crombie said:
"I am pleased to report that Standard Life has had a successful first half in 2008, despite more difficult market conditions.
"In our life and pensions businesses, net flows were strong, sales showed good growth and profitability was maintained. In Standard Life Investments, net inflows offset the impact of market declines so that third party funds under management remained constant. Group operating profits were well ahead and our balance sheet remains robust with strong solvency ratios maintained.
"Looking ahead, we will continue to drive further efficiency gains, whilst investing in our businesses where we identify opportunities for growth. Our innovative product set, excellence in customer service and strong distribution relationships leave us well placed for the full year.
"Reflecting our progress in the first half and our confidence about the future, the Board is increasing the interim dividend payment by 7%."

http://ukgroup.standardlife.com/html/static/docs/2008_interim_results.pdf

Latest financial results from Standard Life plc

Notice of our Q3 trading results and interim management statement

On 30 October 2008, from 07.00 GMT, we will be announcing our Q3 trading results and interim management statement on this website.

sabretoothtigger

Midway through the year, Standard Life had a capital surplus of £3.5 billion, the strongest in the sector, however shares dropped sharply last week as analysts at HSBC warned it and Friends Provident were among the least well-capitalised in the sector in Europe



Total UK sales are expected to have fallen 3 per cent to £9.9bn, while European sales are forecast to have dropped 20 per cent to £618 million. However, the group's fast growing Asian businesses are expected to boost the figures.

http://thescotsman.scotsman.com/business/Questions-ahead-for-Crombie-as.4630947.jp


Just so it can contrasted tomorrow morning, last results - 06 August 2008

LIFE and pensions group Standard Life today said half-year profits rose 51% against a backdrop of continuing economic uncertainty.
The Edinburgh-based firm's improvement to £534 million came after worldwide life and pensions new business sales rose 5% to £9.1 billion in the first six months of the year, with the figure in the UK "constant" at £7.2 billion in a challenging market.

New business profits generated by the UK life and pensions operation increased by 4% to £138 million


SIPP were down 19% to £2.1 bn

But the company stuck by its expectation that the UK SIPP market will double in size to £100 billion of assets by 2011, adding that it planned several changes to its SIPPs product in the second half of 2008.

Group pension sales of £1.8 billion increased by 17% compared to a strong period a year earlier, reflecting a further sign of the shift towards group personal pension schemes and thanks also to a large scheme win.

Standard Life added that sales across its savings and investments portfolio increased by 19% to £1.6 billion, due to continued strong offshore bond sales, which have more than tripled compared to a year earlier.


In mortgages, Standard said its book stood at £10.6 billion at the end of June, a fall of £700 million on December but with a low arrears rate of 0.24%.

http://thescotsman.scotsman.com/standardlife/Standard-Life-bucks-market-trend.4360736.jp

with-profit funds had about £400bn in assets at the beginning of this year. Of this, about £155bn was invested in equities and £157bn in bonds, of which £76bn was government or government-like bonds and £68bn was corporate bonds. With-profit funds also had about £45bn invested in property and £41bn in cash, he said.
As of mid-October, Mr Cazalet estimated that the portions of with-profit funds belonging to policyholders could be facing losses of between 15 per cent and 20 per cent

http://www.ft.com/cms/s/0/c4e7db8e-a5d7-11dd-9d26-000077b07658.html

sabretoothtigger

Standard Life sales miss forecasts [FONT=arial,helvetica]By 9:17 GMT, Standard Life shares were down 6.9 percent at 185[/FONT]

[SIZE=-1] LONDON (Reuters) - Life insurer Standard Life on Thursday reported weaker-than-expected nine-month sales, sending its shares lower, but said its capital position was strong despite the stock market slump.
Standard Life said its worldwide life and pensions sales amounted to 12.4 billion pounds in the nine months to September 30, little changed from 12.3 billion pounds in the same period last year.
That was below the 12.6 billion pounds expected by analysts, according to the average of 9 forecasts collected by the company.
"There was a slight miss against the consensus sales number. Standard Life has been one of the better performing UK life stocks," said Peter Eliot, insurance analyst at MF Global.
The Edinburgh-based insurer also reported a capital surplus of 3.4 billion pounds at September 30, compared to 3.5 billion pounds three months earlier, and said its capital buffer would fall to 1.9 billion pounds in the event of a 40 percent fall in equity markets from their September 30 level.
"Our FGD <Financial Groups Directive> surplus is still strong in the event of further market weakness," the company said in a statement.
The Financial Groups Directive, or Insurance Groups Directive, is an industry measure of capital adequacy which stipulates that insurers must hold a layer of capital over and above the minimum needed to meet their obligations to customers, plus a further buffer to absorb unexpected shocks.
In a conference call with reporters, David Nish said the company was comfortable with its capital position, and was not considering raising fresh funds.
He added that the company's surplus currently stood at about 3.3 billion pounds, following a 20 percent fall in equity markets during October.
"We're very well capitalised," Nish said.
Life insurers' shares have fallen steeply this month on mounting concerns that falling equity and bond prices as the global economy slows could dent their capital reserves.
[/SIZE]

Their failure to acquire resolution has really been a good thing it seems

Total net flows across its Worldwide life and pensions operations were 2% lower at £2.3bn, with growth in its international operations offsetting the continued difficult market conditions in the UK

UK life and pensions net flows were 15% lower at £1.7bn. In Savings and investments there was a net outflow of £243m (2007: net outflow of £99m) due to lower Investment bond sales that were affected by market uncertainty and recent CGT changes. Worldwide life and pensions sales marginally higher at £12.4bn (2007: £12.3b

http://uk.biz.yahoo.com/30102008/325/standard-life-sales-miss-forecasts.html

In the first nine months of 2008


Individual SIPP sales of £2.9bn were 19% lower

UK life and pensions sales of £9.8bn were 5% lower

Worldwide life and pensions sales marginally higher at £12.4bn (2007: £12.3bn)

Group pensions sales increased by 10% to £2.3bn

Savings and investments sales increased by 2% to £2.1bn



At 30 September 2008 mortgages under management stood at £10.1bn (31 December 2007: £11.3bn), with an arrears rate of 0.30%, which is a fifth of the Council of Mortgage Lenders industry average reported at 30 June 2008.


We have put in place a number of measures to manage our mortgage exposure during the ongoing period of difficult credit market conditions, and these led to net outflows of £1.2bn from our mortgage business. Following the second maturity from the Lothian securitisation programme, which took place on 24 October 2008, there are no securitisation maturities until 2011. Our banking operation remains well capitalised with a very high quality mortgage book, has access to a diverse range of funding sources and has actively reduced its funding requirements during the year.

http://ukgroup.standardlife.com/content/news/new_articles/2008/q3_trading_interim_management.xml

I stuck a down arrow against results trending down and below previous results/expectations







As well as gaining on the previous spike, it ended the day on another spike. Hopefully this is a sign the markets confidence in this stock has returned. Its outperformed, in theory we see a gain of 18% over just two days but not sure this will stick or not

sabretoothtigger

It lost the spike at first but otherwise it was all gains today. In fact it was the biggest riser on the ftse100 thanks to a very late surge.

It seems likely to fall back next week some but the gains are justified imo as the results were not great but still positive and well balanced thanks to their global operations and hedging effects

Analyst estimate price (1yr) is 234, they ended at 238 today. Im not sure this marks a return to their previous out performance of the market

baby_boomer

It's the surprisingly good capital position which is responsible - Standard is off the "seriously at risk from a market crash" list.

Guardian

Our management appear to have been far-sighted in hedging against recent market falls .

The share price has stood up very well, as a financial stock, against the FTSE - closing at 238p.

Yahoo link - Chart comparing Standard v the FTSE100 since flotation

"..if the stockmarket fell another 40% its surplus would fall to £1.9bn, from its current level of £3.4bn.This contrasts with rival Aviva which revealed earlier this week that the surplus capital it holds to convince regulators it can withstand market falls had been eroded by £600m to £1.3bn..."

We may have just benefitted from some intra-sector switching by brokers . 60p up since Monday's lows is not a bad result!

Those who bought at 218p and held to get 5% bonus shares + dividends have still had a decent performance when you compare with the FTSE graph over that period - down over 30% :eek:

I wouldn't mind a steadier performance, from now on, though .

StevieJ

I love these shares.

baby_boomer

What a rollercoaster.

They gained 30% on the FTSE, lost 20% on the FTSE and now are back to 30% up on the FTSE.

If I'd have sold at the top around £3.40, I'd have reinvested in the stock market - and looking at the charts, the overall result today would have been similar.