Shares in financial services business Prudential fell on Wednesday after an underwhelmed response from the market to forecast-beating trading numbers.
At 743.6p per share, Asia-focused Prudential’s share price was last 4.7% lower in midweek business.
In 2023, new business profit at the FTSE 100 firm soared 45% at constant exchange rates, to $3.1 billion, as the end of Covid-19 lockdowns boosted business.
The company said that new business profit grew in 17 of its 22 life markets, while market share advanced in seven of its Asian life markets.
Adjusted operating profit at Prudential, meanwhile, increased 8% at stable exchange rates, to $2.9 billion.
Operating free surplus generated from The Pru’s in-force insurance and asset management business rose 1% at constant currencies, to $2.7 billion.
Full-year dividends were increased 9% year on year, to 20.47 US cents per share.
“Very Strong”
Chief executive Anil Wadhwani commented that described its 2023 statement “a very strong set of results while operating in a challenging macro environment,” commenting that its profit bump was “driven by a relentless focus on execution in our markets in Asia and Africa.”
He added that last year’s bottom-line improvement “is also an illustration of the strength of both our agency and bancassurance distribution channels as well as an affirmation of our leadership position in many key markets.”
Wadhwani noted that “sales growth has continued in the first two months of 2024,” and added that “we are increasingly confident in achieving our 2027 financial and strategic objectives and in accelerating value creation for our shareholders.”
Last summer Prudential announced plans to deliver 15% to 20% compound annual growth in new business profit to 2027. It also aims to generate double digit compound annual growth in operating free surplus generated from in-force insurance and asset management business.
“Knockout” Results
Analyst Matt Britzman of Hargreaves Lansdown praised Prudential’s “knockout set of full-year results,” noting that “there are consensus beats all over the shop, from insurance margins to the dividend.”
He said that “performance has been supercharged by a reopening of the border between mainland China and Hong Kong last year,” which has been especially good news for The Pru’s Hong Kong operations given its focus on visitors from the mainland.
The city was responsible for 45% of group new business profit last year.
Britzman added that “Prudential isn’t a massive income yielder like some of its peers, so growth is critical to the investment case – and there are signs that it can deliver.”
Royston Wild owns shares in Prudential
