Resolution’s Share Price Up on 17% Profit Growth

on Aug 13, 2013
Listen Tuesday, August 13th: Resolution Limited (LON:RSL) reported a 17 percent increase in operating profits for the first half of 2013 as compared to the same period last year. The British life insurance group attributed the profit growth mostly to reduced costs of new business in the UK and non-recurrence of one-off costs. The first-half profits surpassed Credit Suisse’s analysts’ forecast of £182 million by £9 million.

**Operating earnings per share were up 17 percent at 13.26p.**
The firm scored £61 million in after-tax profits while in the six months ended June 30, 2012, it had reported a loss of £58 million. The turnaround to profit reflects better investment return variances from narrowed credit spreads, less recurring one-time costs due to finalisation of separation and integration projects, the amortisation of intangible assets, and a gain from the sale of the Group’s 30 percent stake in the insurance company AmLife, Resolution Limited said in its interim statement for the first half of 2013 .

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Sustainable free surplus, a key driver for cash generation, increased by 23 percent on the year to £147 million during the period. The Heritage division, which manages a significant proportion of the value of in-force of the Group, has been the main driver for this growth, according to CEO Andy Briggs.
The value of new business (VNB) in the UK division grew by 41 percent to £89 million. In the international unit, however, the VNB dropped by £1 million to £21 million due to unfavourable economic conditions in difficult markets.

Interim dividend was 7.05p, unchanged from H1 2012.
During the first half of 2013, the company managed to achieve costs savings of £119 million which is 94 percent of its target for 2013.
!fm[Value of New Business in UK Jumps 41 percent](/uploads/story/4765/pic-1.gif)
Resolution was created back in 2008 by businessman Clive Cowdery as an investment vehicle whose purpose is to buy underperforming British life insurers, restructure them, and merge them into a more profitable entity.
**The company, which is a part of the FTSE100 index, has seen its share price rise in London for** **the past few months. Today its shares opened at 330.20p, 1.75 percent above yesterday’s closing price. Resolution’s share price was 339.90p as of 13.08.2013, 08:28 BST.**


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