Standard Life exceeds profit forecasts

Standard Life has exceeded forecasts with a 71% rise in first-half operating profit, enhanced by growth in its key domestic market and increased sales of higher margin products. The insurer, which scrapped its mutual status and listed in 2006, announced that its operating profit before tax, on a European embedded value (EEV) basis, was £353 million.

A survey by 9 analysts at Reuters recently had produced an average forecast of £318 million, while the company had provided a consensus forecast of £327 million. Underlying profit before tax dropped 10% affected by tough comparisons after 2006 benefited from provision releases and outstanding sales in Germany.

The group also highlighted that new business contribution for the first 6 months of 2007 was £151 million - up 66% and again above forecasts, with group margins, which it had already indicated would be above 2006’s 1.4%, at 1.8%.

The group also reported a 31% increase in first-half sales in August and commented then that it anticipated a considerable rise in margins, driven by increasing sales of increased capital efficiency and more lucrative products.

Standard Life announced it will pay an interim dividend of 3.8p per share – slightly above analyst’s predictions.

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