Standard Life beats profits forecasts as Ignis purchase provides a boost

Insurance giant Standard Life said the recent acquisition of Ignis helped it to increase assets under administration (AuA) by 38% in 2014, while profit growth and the final dividend came in ahead of City forecasts.

AuA from continuing operations totalled £296.6bn by the end of the year, compared with £214.7bn in 2013, helped from £60.5bn of assets acquired with Ignis and £20.4bn of positive market movement. Net inflows of £1.0bn also helped, though these were lower than the £8.8bn recorded in 2013.

After the disposal of its Canadian operations announced in September, £31.8bn of assets were presented as discontinued operations.

The company reported a 19% increase in operating profit before tax from continuing operations to £604m, on fee-based revenue that rose 14% to £1.4bn. The consensus estimate was for profits of £559m.

Standard Life purchased Ignis Asset Management for £390m in the second half and the integration of the business is said to be progressing well. The company remains on track to deliver the £50m of planned annual cost savings from the deal by 2017.

Meanwhile, the £2.2bn Canadian disposal was completed in January to Manulife, enabling the proposed return of £1.75bn to shareholders.

The group declared a final dividend of 11.43p, taking the full-year payout to 17.03p, up 7.8% on the previous year and slightly ahead of forecasts.

Looking ahead, Standard Life said that it entered 2015 “with strong positions in our markets”.

However, it did say to expect a “step-down” in profits at its spread/risk business in the coming years due to the recent reduction in demand for individual annuities following changes in the March 2014 Budget.

“Although investment markets are unsettled and may affect the near-term pace of asset and revenue growth, we are very well placed for the future,” said chief executive David Nish.

The stock was up 2.1% at 417.1p in early deals on Friday.