20th February 2015
Standard Life reported strong full year results and a dividend hike but investors should be wary of the impact of pension freedom later in the year.
The Share Centre tipped the insurer as a ‘hold’ following its full year 2014 results. The shares gained 2.2% before noon on Friday after the company reported a 19% increase in full year profits to £604 million with growth expected to continue this year.
Assets under management also increased 45% thanks to the acquisition of Ignis Asset Management and positive market movements.
Sheridan Admans, investment research managers at The Share Centre, was confidence about the company but said the pension freedoms could cause trouble as annuity sales fall off.
‘Ahead of government pension reforms, Standard Life added that it expects annuity sales to be hit later this year,’ he said.
‘The company said global expansion continues to support results, with the sale of its Canadian business enabling it to propose a return of £1.75 billion to shareholders. Standard Life remains focused on growing it international proposition with distribution now in markets such as Singapore, Dubai and China. Investors should also be pleased with the announcement of a 7.8% hike in final dividend to 11.43p.’
Admans said Standard Life remained at a ‘hold’ because of the ‘premium the share price trade on and the expectation that the return of capital form the sale of its Canadian operations is reflected in the price’.
He said his life company preference was Prudential ‘due to its Asian growth’ and Aviva ‘as a turnaround story’.