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Friends profits dive 20%

Friends Provident saw its gross underlying profit fall 20 per cent in the first half of this year to £211m, down from £264m at the same time last year.

Friends’ IFRS gross underlying profit plummeted 88 per cent to £13m from £111m, which it says follows a one-off charge of £70m related to corporate bond market value movements.

New business fell 29 per cent to £67m, down from £95m last year and UK life and pension business fell to £319.6m, down 12 per cent from £361.8m.

Friends says that it continues to resolve its position with F&C and is considering a pro-rata distribution of its stake to shareholders if an alternative is not available.

In January Friends introduced a revised strategy to maximise value for shareholders by concentrating on manufacturing and administering life and pension products.

Chairman Adrian Montague says: “The strong headway made in implementing our new strategy, coupled with other timely initiatives taken to reduce our exposure to financial markets, has enabled the company to weather the subsequent sharp economic downturn more favourably than otherwise would have been the case.

“Our business has no need to raise capital to fund growth, and our revised dividend policy remains sustainable. The strategy is not dependent on achieving asset sales but any proceeds from any asset sales that are completed will still be returned in full to shareholders. The financial results are a reflection of the actions to implement the strategy and the prevailing economic conditions.”

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