Standard Life's Q4 sales dip 12%

Standard Life's Q4 sales dip 12%

	Published : Mon, 06 Feb 2006 16:25 By : David Simms Print this Story

LONDON: Mutual insurer Standard Life said its revenues from the U.K. market declined 12 per cent in the fourth quarter to 221 million pounds on an annual premium equivalent basis, compared with the corresponding previous year quarter. The company, Europe's largest, said its focus had been on profitability rather than sales with an eye on the planned stock listing this summer.

Standard Life had posted a 7 per cent fall in revenue in the third quarter. It initiated several cost-cutting measures, including reduction in commission to agents and exit from less profitable businesses.

The company is coming out with its profit figures for the first time to allow prospective investors to have a glimpse of its financial health as they invest in the IPO slated for April/May 2006.

Standard Life's chief finance officer Alison Reed said the company has been becoming more profitable and it is clearly looking at increasing margin.

The firm's U.K. life and pensions sales for the full year were up 3 per cent at 908 million pounds, compared with the previous fiscal, mainly as a result of a good show in self-invested personal pensions (Sipps) and investment bonds. However, its total sales for the year, including Canada, Germany and Ireland, were down 6 per cent at 1.238 billion pounds.

Its performance in Germany has been substantially affected -- sales there dropping as much as 68 per cent to 66 million pounds. The sales in 2004 in that country had benefitted from customers rushing to take advantage of tax concessions, which were withdrawn at the beginning of 2005.

The insurer said sales of Sipps grew 186 per cent and investment bonds 23 per cent over the fourth quarter. For the full year, the two products brought in 1 billion pounds each of single premium business. Its single-premium sales rose by 13 per cent.

Standard Life feels Sipps will continue to grow "strongly", despite the government's decision to exclude residential property from the allowed investment portfolio.

Standard Life reports its sales on an annual premium equivalent basis, which analysts say remove distorting large sales of single-premium policies like annuities.

The firm is expected to be valued around 4 billion pounds to 6 billion pounds when its lists. It plans to raise 1 billion pounds on the bourse.