Sharp rise in UK sales boosts Prudential

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The Independent Online

Prudential, the UK's second largest insurer, unveiled a 39 per cent rise in achieved operating profits for 2004 yesterday, as it reported its first set of full-year results since embarking on its controversial £1bn rights issue last October. In the UK, the group boasted a 40 per cent rise in UK sales and a 25 per cent rise in achieved profits, consistent with its assertion that the UK is now worthy of retaking its place as the group's core focus.

Prudential, the UK's second largest insurer, unveiled a 39 per cent rise in achieved operating profits for 2004 yesterday, as it reported its first set of full-year results since embarking on its controversial £1bn rights issue last October. In the UK, the group boasted a 40 per cent rise in UK sales and a 25 per cent rise in achieved profits, consistent with its assertion that the UK is now worthy of retaking its place as the group's core focus.

Last autumn, investors and analysts criticised Jonathan Bloomer, the chief executive, for his decision to raise money to fund more rapid UK expansion. Since the rights issue, however, the group has secured several new lucrative distribution agreements, including one with Barclays Bank earlier this week.

It has also seen an improvement in trading conditions and is predicting it will achieve double-digit UK sales growth this year, in an overall market that is expected to grow by just 5 per cent.

Mr Bloomer said the new distribution agreements would begin to contribute to the group's growth this year, but were not expected to make meaningful contributions to the bottom line before 2006. The US and Asian businesses also saw double-digit growth last year, with Asia expected to see at least the same again this year.

He said that most importantly the company had managed to increase business volumes whilst maintain its margins over the past year.

In response to speculation about the future of Egg, the internet bank in which Prudential owns a 79 per cent stake, Mr Bloomer said he was no longer seeking a buyer. He added that he also remained committed to his US business, Jackson Life, which some shareholders believe the group should sell.

After hitting 12-month lows of 380p in October, Prudential's shares have rebounded more than 27 per cent, closing at 486.25p yesterday.

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