UK insurance and asset management company Standard Life on Tuesday posted an 18 percent increase in actual operating profit for the first six months of the year and beat market forecasts despite predicting future instability.
Company management disclosed its assets rose seven percent to $428 billion (328 billion pounds) from 307.4 billion pounds one year earlier. The company’s shares also went up by nearly five percent.
Other asset managers have been confronted with increased market unpredictability this year and most of them experiencing mutual fund depletion as many investors were frightened by many economic developments especially the UK’s decision to abandon the European Union.
The investments division of Standard Life performed well and said its assets under management went up six percent to 269 billion pounds. Meanwhile, the company deferred trading in a 2.9 billion fund for British commercial real estate after investors withdrew their money after the UK vote last June.
Standard Life earned an adjusted operating profit of 341 million pounds for the first year up 18 percent from 290 billion pounds from one year ago. The company’s board of directors offered a 1st half dividend of 6.47 pence per share. This is a 7.5 percent increase from 6.02 pence one year ago.
Meanwhile, the Global Absolute Return Strategies Fund (GARS) of Standard Life worth 26 billion pounds witnessed a quarterly decline for the first time in three months after Brexit.
Aggregate assets under management increased seven percent to 328 billion pounds up from the 307.4 billion pounds ending December, aided by market gains worth 19.7 billion pounds as the UK pound sterling declined and bond yields plunged.
An analyst from Barclays Bank, Alan Devin observed that flows were positive for the first six months at 600 million pounds although this was significantly less than the 5.6 billion during the previous year.
Meanwhile, operating pre-tax profits went up 18 percent to 341 million pounds and underlined a 7.5 percent rise in the groups short-term dividend to 6.47 pence per share. This sent Standard Life shares to 333.1 pence or a 4.6 percent increase making it the second-biggest gain in the UK’s Financial Times Stock Exchange Index.
Standard Life CEO Keith Skeoch believes the insurer will generate additional savings that will push major improvements in the company’s cost-to-income proportion.