Prudential reports sales rise before AGM
Jun 7 2010 By John Hill
PRUDENTIAL has released results showing a further rise in sales in the last two months, as it bids to quell the anger surrounding the failed takeover of AIG’s Asian arm.
The insurer said sales in April and May this year were up 28 per cent, putting group wide sales over the first five months of the year at £1.355m. The results equate to a 27% rise on the same period last year, and growth in the last two months exceeds the 26% growth reported in the first quarter.
The announcement comes as chief executive Tidjane Thiam faces calls to resign over the bid for AIA, which collapsed on June 2 after Pru shareholders decided the price was too high and the company failed to secure a lower price. The deal is likely to be a hot topic of conversation when the board faces shareholders at its AGM in London today.
Thiam said: “Our strong start to 2010 has continued in April and May. Our strategy to focus capital on the most profitable geographies and products is delivering excellent results. We have been consistent in our commitment to our strategy and the proposed acquisition of AIA was intended to accelerate this strategy.
“Throughout the period of our proposed transaction with AIA, our businesses continued to perform strongly, particularly in Asia and the US. All of our businesses have a strong momentum and we will continue to focus on delivering shareholder value.”
The company amassed £450m in adviser fees and other costs after launching the bid in March, a move which would have been the insurance sector’s largest ever takeover. It has denied weekend reports that it is planning another bid before the end of the year.
Fund manager Schroders, which is one of Pru’s largest investors with a 1% stake, has called for Thiam to resign, saying that not holding management to account would be “giving every chief executive carte blanche to have a pop at deals without consideration for any downside risk”. Schroders is also expected to join fellow shareholders Aviva Investors and Co-operative Investments in voting against the company’s remuneration package, which includes “golden hello” deals for finance director Nic Nicandrou and UK business head Rob Devey.
The company pointed to a “strong performance” in Asia, where sales rose 33% to £579m in the first five months of the year, while new business sales in the US hit £454m, a rise of 41%. The UK arm of Prudential was up 4% to £322m.
Prudential released its first quarter results on May 17, revealing group wide sales of 807m, compared to £640m in the same period in 2009.