Standard Life’s Sales Beat Estimates on Regulatory ChangesKevin Crowley
Standard Life Plc, Scotland’s biggest insurer, said first-quarter sales rose 24 percent, beating analysts’ estimates, as regulatory changes helped attract U.K. savers. The shares rose.
Long-term savings sales increased to 6.27 billion pounds ($9.6 billion) from 5.04 billion pounds a year earlier, the Edinburgh-based firm said today in a statement. That beat the 5.36 billion-pound average estimate of 15 analysts surveyed by the company.
The sales result “was better than we and the market had expected in respect of funds under management, new business and net flows,” Eamonn Flanagan, a Liverpool, England-based analyst at Shore Capital Group Ltd. with a hold rating on the stock, wrote in a note to clients today. “The group has clearly benefited from better marketing positioning, especially in the U.K. and Canada, and recent product launches.”
Standard Life is seeking U.K. pension assets as the government forces companies to offer pension plans, aiming to increase savings rates and reduce reliance on the state for retirement. The company has also been making acquisitions and investing in technology ahead of the Retail Distribution Review, a ban on financial advisers taking commissions from fund companies that came into effect this year.
“U.K. sales benefited from the implementation of auto-enrollment for a number of existing clients, and while the industry continues to see disruption as a result of the introduction of RDR, we are seeing encouraging signs,” Chief Financial Officer Jackie Hunt said on a call with reporters.
Long-term savings net flows increased 26 percent to 1.4 billion pounds, Standard Life said. The firm’s assets under administration increased 6.9 percent to 233.1 billion pounds. About 12.2 billion pounds of the increase came from market movements and 2.8 billion pounds was from net inflows.
The stock rose 3.9 percent to 366.4 pence a share, the biggest gain in the FTSE 100 Index, as of 8:11 a.m. in London.