Trevor Matthews, the former Standard Life executive who has taken the helm at troubled insurer Friends Provident, is confident his new company has a long-term future despite it falling into the red.

Trevor Matthews, the former Standard Life executive who has taken the helm at troubled insurer Friends Provident, is confident his new company has a long-term future despite it falling into the red.

Matthews, who has been in the job a week after six months of "gardening leave" from his former employer, told The Herald: "I am very happy about what I found, notwithstanding a set of results some people would say are disappointing."

Friends yesterday reported a £211m pre-tax loss for the first six months of the year compared to a £102m profit in the same period in 2007. On an underlying basis, profits fell from £111m to £13m after taking a £70m hit from the impact of market movements on its annuity portfolio.

He said the company had been through a difficult time, and added that although a strategic review was in the process of being implemented - and things would get worse before they get better - there were "good foundations for a strong company".

Investors proved more sceptical, sending its shares down 5% to 87.2p, after the company reported a mere 1% increase in sales as strong business overseas, particularly in Hong Kong, was offset by a 12% fall in UK sales where the falling housing market hit protection products.

Matthews, who is thought to have been keen to take over from Sandy Crombie at the Edinburgh insurer until the latter's reluctance to move on persuaded him to take the Friends job, said he was "very confident" the company had a long-term future.