One-off charge hits Friends' profit (From Salisbury Journal)

One-off charge hits Friends' profit

9:31am Thursday 21st August 2008 in

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PENSIONS and life assurance provider Friends Provident, which employs more than 900 people at its Salisbury office, has recorded profit before tax of £13m - down from £111m in 2007 - for the half year ended June 30 2008.

This includes a one-off charge of £70m due to reserving for annuities, driven by corporate bond market value movements.

The interim dividend cost has been declared at £30m. The company says the UK results reflect "difficult trading conditions, but in line with management expectations".

Friends Provident International showed 57 per cent growth in new business.

Chairman Sir Adrian Montague said: "The strong headway made in implementing our new strategy, coupled with other timely initiatives taken to reduce our exposure to financial markets, has enabled the company to weather the subsequent sharp economic downturn more favourably than otherwise would have been the case.

"Our business has no need to raise capital to fund growth, and our revised dividend policy remains sustainable.

"The strategy is not dependent on achieving asset sales but any proceeds from any asset sales that are completed will still be returned in full to shareholders.

"The financial results are a reflection of the actions to implement the strategy and the prevailing economic conditions.

"But this should not mask the fact that a stronger and more profitable business will emerge when the strategy is fully implemented.

"We are building firm foundations for future growth in the business and in dividends."

The new strategy involves focusing on less capital intensive market segments and to become self financing.