Friends reports 20% slide in profit as UK sales decline

by Gill Montia

Story link: Friends reports 20% slide in profit as UK sales decline

Life and pensions provider, Friends Provident, has reported a 20% fall in first-half profit.

New business profit fell just under 30% to £67 million, down from £95 million in the first six months of 2007.

Pre-tax profit on a European embedded value basis declined to £211 million, from £264 million a year earlier.

UK sales were affected by the slowdown in the housing market, which saw mortgage protection new business fall 16%.

Sales of group pension sales were roughly comparable with the first half of last year but individual pension sales fell 37%.

However, the group’s international life and pensions division recorded strong growth, with new business sales rising by 57% and the Hong Kong unit putting in a stellar performance.

Friends has been undergoing a restructure since its failed merger with Resolution last year and has reported that the proposed sale of its 52% stake in F&C Asset Management is progressing satisfactorily.

However, further options are being sought for the disposal of its Lombard division, which specialises in tax-efficient investment for high net worth individuals, after Swiss Life withdrew its interest last month.

The sale of Friend’s Pantheon Financial business has already been abandoned as it was unlikely to make the £30 million asking price.