Prudential beats expectations with 17% rise in first-half operating profit

11th Aug 2015 09:33

(ShareCast News) - Insurer Prudential rallied after posting a better-than-expected 17% rise in first-half operating profit and lifting its interim dividend on the back of strong performances in all of its business units.In its first earnings release under new chief executive Mike Wells, Prudential reported operating profit of £1.88bn, up from £1.60bn in the first half of last year, underpinned by solid performances in Asia, the UK and the US.Analysts had pencilled in around £1.74bn in operating profit.The company's US unit, Jackson Life, saw 11% growth in operating profit to £843m, compared with expectations for £777m, while UK Life operating profit was up 19% at £436m versus forecasts of £374m.Wells said: "We have delivered a strong, broad-based performance in the first half of 2015. Our consistent strategy, rigorous execution and tight focus on the needs of our customers have ensured that we continue to deliver profitable growth and increased cash generation."We are capturing profitably the opportunities available to us in the growing markets of Asia, while in the US and the UK we are continuing to use our established market position, distribution strength and products that are valued by customers to deliver growth in IFRS operating profit and free surplus generation. In doing so, we are making progress towards our 2017 objectives."The company raised its interim dividend by 10% to 12.31p per share.Shore Capital analyst Eamonn Flannagan said "new CEO, Mike Wells, started his tenure with an excellent set of interims, building upon the legacy of Tidjane, the previous incumbent"Flannagan said all of the key financial metrics were ahead of both its and the market's expectations, highlighting the strength of Prudential's positioning across the main financial markets in the US, UK and Asia, with the dividend as expected. He rates the stock at 'buy'.Keith Bowman, equity analyst at Hargreaves Lansdown, said the results offer broad reassurance, "with the group's ongoing capital-generative business model and disciplined approach to risk management being firmly underlined."He added: "The company's targeting of the middle classes in Asia, the retiring US baby-boomers and the increased need for UK consumers to save for their own retirements all offer potential long-term growth. For now, and supplemented by today's 10% increase in the interim dividend payment, analyst consensus opinion continues to point towards a strong buy."At 1358 BST, Prudential shares were up 2.5% at 1,544.50p. .