Irish Life & Permanent profits soar to €358.2m

IRISH Life & Permanent full-year results surpassed expectations, with pre-tax profits soaring to €358.2m compared to €79.1m in 2000.

The increase was achieved against a backdrop of poor performances in the European insurance sector. The company took a €129.7m hit on short-term investment fluctuations (STIFs) on stock market investments and currency losses and was made up of 96.7m in the life operations, and 33m on the group's associate Allianz Irish Life.

However, as IL&P has adopted the new Association of British Assurers SORP accountancy rules, which focuses on profit before tax before the impact of STIFs, this 129.7 loss is not factored into pre-tax profits.

And the pre-tax profits figure included exceptional gains of 125.5m, coming from the sale of its Irish Life industrial branch business and the sale of surplus property following the integration of TSB. On the TSB side, IL&P recorded an exceptional gain of 30m on the sale of branches, but this was partially offset by a 10m restructuring charge related to the group cost programme. However, savings associated with the TSB purchase are expected to reach 29m in 2003.

IL&P group chief executive David Went described 2002 as a year of solid achievement. "At an operational level, each of our key businesses enjoyed exceptional sales performances during the year; life sales in Ireland were particularly strong with growth of 25%, while mortgage sales rose by 28% and bank assurance sales were up a very strong 50%.

"At a strategic level we completed the creation and rollout of Permanent TSB and more recently the disposal of Guarantee Reserve in the United States.

"At a financial level we enjoyed another year of strong profit growth, which enabled us to grow our dividend by 10%. Throughout the year, we also made important progress on the re-engineering of our key business operations, which will help position us strongly for the challenges ahead."

The word "strong" was used by most stockbroking analysts commenting on IL&P's results.

Davy Stockbrokers analyst Emer Lang said: "In the context of results from other European insurers, Irish Life & Permanent posted a strong set of results, highlighting its relative balance sheet strength."

Ms Land said that all in all, these results reinforce IL&P's status as a quality life assurer with strong defensive characteristics.

Dolmen Securities Stuart Draper points out that on a like-for-like basis, operating earnings and operating earnings per share of 234.7m and 87c, respectively, were above forecasts of 178.2m and 66c, and were year-on-year increases of 23% and 29%.

Among remarks included in the results IL&P stated:

"The group remains committed to its Ireland First strategy and continued throughout 2002 to invest significantly in its businesses in the Irish marketplace where there continues to be significant growth potential. Throughout 2002 the group's businesses engaged in significant actions in order to prepare for the challenges which will face them in the future."

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