Windfall for Standard Life shareholders as insurer unveils 302million payout
By
Harry Glass
PUBLISHED:
12:07 GMT, 7 March 2013
|
UPDATED:
13:34 GMT, 7 March 2013
A bigger-than-expected jump in profits has triggered a one-off 12.8p per share windfall for Standard Life shareholders, to be paid out on top of the 14.7p total annual dividend.
The Edinburgh-based business will return 302million to shareholders after it delivered 286million in UK pre-tax operating profits, up from 156million the previous year.
The announcement by Britain's fifth biggest insurer put in the shade its rival Aviva, whose chief executive Mark Wilson wasted no time in slashing the company's dividend to help fund turnaround efforts – sending its shares slumping 14 per cent today.
Special payout from Standard Life: The Scottish insurer was the fourth-best riser in the FTSE 100 last year
Standard Life's total group profits
rocketed 65 per cent to 900million, with assets under management
leaping to a record 218billion from 198billion in 2011 as global stock
markets have bounced back to levels not seen since before the financial
crisis.
And a surge in UK assets under
management to 143billion helped offset an 800,000 plunge in UK company
pension net inflows to 1.2billion as firms put off decisions to
automatically place workers in company schemes ahead of the launch of a
landmark scheme.
Standard Life said employers were delaying
changes to their pension plans due to the phased launch of
auto-enrolment, which began on October 1 and will see up to 10million
people placed in workplace pensions – starting with the largest firms
and gradually applying to others over the next six years.
But it said it expects a
significant boost from auto-enrolment over the years ahead, forecasting a
potential 400,000 extra savers.
'Standard Life has delivered a substantial increase in profitability and has a strong capital position supporting increased dividends for our shareholders,' said chief executive David Nish.
'We have been building strong positions in our core markets. In the UK we are ready to benefit from the significant changes to the market and the increased customer need for savings products.'
It has already seen a significant rise
in new business enquiries as the auto-enrolment scheme has prompted
firms to review their pension plans, which it hopes will lead to higher
sales this year and next.
Its dividend cheer comes as rival Aviva slashed its total annual shareholder payout by 27 per cent per cent after a difficult year.
Mark Wilson said the cut from 26p to
19p a share put the Norwich-based company in a 'sound position for the
future', but investors were less than impressed and sent shares down
49.6p to 310.2p, equivalent to 1.5billion.
It is a big blow to income-seeking
investors and many of Britain's major pension funds, who hold the
blue-chip firm's shares because of its attractive dividend yield.
Standard Life shares this morning are down 1.9p (0.5 per cent) to 372p.