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Standard Life says payouts top £2bn

STANDARD Life has announced a £302 million special dividend meaning payouts to shareholders since its flotation have topped £2 billion with analysts suggesting further returns of cash could be on the way.

PROFIT: Chief executive David Nish announced strong results for 2012, and revealed ambitions for further growth.
PROFIT: Chief executive David Nish announced strong results for 2012, and revealed ambitions for further growth.

The additional dividend came after the Edinburgh company posted a strong set of financial results for 2012, with operating profits before tax rising from £544m to £900m.

That was helped by exceptional gains including a £96m benefit from a successful insurance claim and £153m from reinsurance and property sales in Canada.

The UK saw operating profit before tax increase from £220m to £382m, while Canada was up from £187m to £355m.

Chief executive David Nish confirmed that once the latest dividends – the 12.8p special payment and the 14.7p regular one – were approved, the Edinburgh business will have returned more than £2bn since its listing in 2006.

Analysts at Exane BNP Paribas speculated more payouts could be on the way.

A note said the improved earning prospects and strong capital position at Standard Life could result in "a series of special dividends".

That view was backed by Deutsche Bank, which said "in our view a further special could be payable in the future".

Mr Nish said: "We have delivered a good set of results with a substantial increase in profitability, built on the changes we have driven in the business over the past three years. We have continued to grow revenues, increase assets and reduce costs."

The auto-enrolment of employees into company pension schemes, which began in October last year, has huge potential, with Standard Life predicting there will be up to 400,000 extra savers, and indicating that it has more than 300 large businesses signed up to work with it.

Pension activity was said to be slow in the first nine months of 2012 but had picked up "significantly" in the final quarter of the year and that pace had continued into 2013.

Mr Nish said: "We have done the first five [companies] and seen good pick-up, which suggests auto-enrolment will be a success."

Standard Life said the Retail Distribution Review – which saw financial advice moving from commission-based to a fee-based model from January 1 this year – had increased the size of its accessible corporate market in the UK.

At Standard Life Investments, profits nudged up from £125m to £145m with group assets under management growing from £198.4bn to £218.1bn.

Keith Skeoch, SLI chief executive, believes the strong start to the year in equity markets is "sustainable". He added: "I think we will see the FTSE break through its previous highs in the next 12 months."

Mr Nish said Standard Life was still interested in acquisitions following the recent deal to snap up Newton's private client wealth operation for £83.5m.

He said: "We are very much on an organic [growth] strategy but we do keep scanning the markets to see where we can acquire something as a bolt-on, where we have a gap in skills or asset classes."

The uncertainty over the constitutional future of Scotland is not giving concern to customers but Mr Nish said Standard Life is keen to find out more information and is hopeful that greater clarity will be provided this year.

Shares in Standard Life closed down 1.2p, or 0.3%, at 373p.

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