Yesterday's AGM of Standard Life was hailed by chairman Brian Stewart as a victory after the company's resolutions were all voted through by the membership, and candidates proposed by the board all elected or re-elected as directors.
However, the picture may not be as rosy as all that as first quarter sales figures across the life sector still indicate Edinburgh’s finest has some way to go to restoring its place at the head of the table.
While motions may have been passed in favour of management now, the fact is those in the City whose job it is to scrutinise new share offers will do just that with a very large microscope come time to actually start selling off what has been the UK’s biggest mutual.
A major wakeup call will have come with figures published today by Legal & General, which says its first quarter global new business sales are up 43% on the same period last year - £307m against £215m on an APE basis.
Standard Life’s APE figure is £317m, down 4% from £329m in the same period one year earlier – although the year-earlier figure is a pro-forma one because of Standard Life’s decision to change its year end reporting date.
Prudential, which has also published its APE figure in the past week, has grabbed £478m worth of business across the its group, up 11% from £431m reported for the year ago period.
Apart from the headline figures – which in the context of the debate often get chucked around like discussion of engine displacement between petrolheads – the key issue seems to be relative growth rates.
Two of the three companies mentioned above are growing their top line, while one is not. No level of cost stripping is going to hide that fact, and this is precisely the sort of thing asset managers in the City will be looking for.
Pru says it is happy with its sales growth because of its own prediction that the UK market as a whole is going to grow by 5% through this year.
With no bottom line – net profit - figures to compare it is harder to tell which company is running the more profitable businesses, regardless of sales growth. It is an adage that without sales, profits are generally speaking much harder to come by regardless of how brilliant company bosses are at utilising assets.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Jonathan Boyd on 020 7484 9769 or email [email protected].
Joined as head of strategy, multi asset, in June
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