Britannic resumes dividends as profits rise

UK financial services group Britannic today showed evidence of its improving financial position as it posted a 6% rise in operating profits and an interim dividend.

The Birmingham-based group said operating profits before tax and one-off items in the six months to June 30 ticked up to £41m (€60.4m) from £38m (€56m) last time.

Britannic also announced that it was resuming interim dividends to shareholders with a payment of 5.45p per share.

The assurer has emerged from a restructuring drive after issuing a profits warning last year in the wake of heavy stock market falls.

It was forced to shed 150 jobs, scrap its dividend, suspend bonus payments, close its with-profits fund to new business and sell its mortgage arm.

The group is now principally focused around two core businesses: Britannic Asset Management, which offers pension fund services and unit trust products, and closed life funds in run-off.

It said today’s results showed its improved financial strength and its potential to expand its closed fund business.

Group chief executive Paul Thompson said Britannic was confident about its future financial performance.

“We also remain optimistic of achieving our goal to become a significant player in the acquisition and administration of closed life funds,” he said.

The group said it had "stability and strength" in its two core activities of asset management and the administration of closed life assurance funds.

During the period, it has replaced the top management at its Britannic Asset Management business, with retail business accounting for an increasing share of the company’s total revenues and representing an important source of organic growth.

The group has brought together its closed life fund businesses into one division under the assured services banner.

It said it had also actively reviewed several closed life assurance fund acquisition opportunities and remained confident of its ability to acquire and manage closed funds.

“This has confirmed our confidence in our operational model and our investment return criteria,” Mr Thompson said.

Britannic said policyholders’ security continued to improve and it was currently accruing for bonuses for most Britannic Assurance with-profits policyholders at the year end in line with its announcement last year.

The group said: “Our two core businesses are now generating consistent returns, which should continue into the future – thereby supporting our dividend prospects.”