Friends Life Group is the new name for Resolution - Old thread here




Friends Life Group Limited is a FTSE 100 listed company focused on providing financial security for over five million customers, with a heritage dating back over 200 years.

Our strategy is focused on helping customers to save for and achieve a good standard of living in retirement and on providing them with financial protection during their working lives.

The business is made up of three divisions:

A specialist Heritage division, looking after customers with products which are no longer actively marketed for new business. The heritage division also include Friends Life Investments, providing asset management services for Group businesses
The UK division, which provides core business lines of corporate benefits, retirement income and protection.
The International division, which provides savings, investment and protection products for expatriates and local nationals in Asia and the Middle East.
Friends Life has the expertise and experience to meet the changing needs of its customers as the life and pensions market continues to evolve. Friends Life is a sustainable business which supports its customers’ financial futures throughout all key life stages whilst creating value for shareholders by growing cash generation and generating returns.

Company Website

Financial Calendar

Recent Broker notes

BarChart Indicators

Recent Market news

Friends Life Group Fundamentals

Disposal and proposed share buy-back

Summary

• Disposal of Lombard to Blackstone for an initial consideration of £317 million (€399 million(2)) subject to anti-trust and regulatory approvals. This includes £254 million (€320 million(2)) upfront consideration, an estimated £7 million (€9 million(2)) interest equivalent, both to be paid in cash upon completion, and £56 million (€70 million(2)) deferred payment in the form of a vendor loan note.

• Total consideration of up to £356 million (€449 million(2)) based on an additional contingent element, which could increase or decrease the value of the vendor loan note by up to £39 million (€50 million(2)) based on certain criteria relating to Lombard's future assets under administration.

• Intention to return £261 million(3) (€329 million(2)) to shareholders via a share buy-back programme to commence upon completion, subject to regulatory approvals, equal to the full upfront cash consideration and estimated interest equivalent.

• 2013 pro forma Sustainable Free Surplus ("SFS") to ordinary dividend coverage ratio is improved to 1.16x(4) from 1.10x.

• Completion expected to occur in the second half of 2014.

Berenberg Hold 332.60 332.60 310.00 330.00 Reiterates

Half Yearly Report

Strong cash performance

· Sustainable free surplus £163 million, up 15% (30 June 2013: £142 million); on track to deliver £39 million uplift in expected return

· Continued good performance in Corporate Benefits, net fund inflows of £0.4 billion

· Value of new business down 24% to £65 million as predicted trends continue, with full impact of the Budget(i) still to emerge

· IFRS based operating profit before tax of £159 million

· MCEV operating profit before tax of £193 million

Capital position robust, dividend secure

· Available shareholder assets £917 million

· IGCA(ii) surplus £2.2 billion, coverage ratio 235%

· Economic capital surplus(iii) £4.0 billion, coverage ratio 193%

· Interim dividend of 7.05 pence per share (30 June 2013: 7.05 pence per share)

Business highlights and successful agreement of Lombard sale(iv)

· Disposal of Lombard announced and share buy-back increased to £317 million

· Peak of auto-enrolment activity in the first half of 2014 delivers 648 schemes with 108,000 net members added to defined contribution pension schemes during the first half of 2014

· Strong growth in Protection, APE is up 21%

· Agreement to reallocate circa £800 million of annuities from with-profits funds, subject to regulatory non-objection, resulting in a SFS benefit of circa £7 million p.a. from 2015

· £200 million syndicated loans mandate further underpins expected return in 2015

· Re-platforming in International division remains on track for new business in the third quarter of 2014 and for all in-force in 2015; interim dividend passed and full year dividend to Group under review

· Excellent progress made towards preparing the launch of new retirement propositions:

- Adding retail functionality to My Money Corporate Wrap platform

- New flexible propositions being developed to offer alternative solutions for customers

- Customer engagement model enhancements fully underway

Share buy back programme

Friends Life is delighted to announce that regulatory approval has been received to increase the share buy back programme (the "Buy Back Programme") announced on 11 July 2014 from £261 million to £317 million. The Buy Back Programme will be funded from the £261 million upfront cash consideration from the sale of Lombard International Assurance S.A. and Insurance Development Holdings AG (together, the "Lombard Business") together with £56 million from existing surplus cash resources in the Company. The £56 million increase in the Buy Back Programme is equivalent to the amount of the vendor loan note issued as part of the Lombard Business sale. This demonstrates the strength of the Company's balance sheet and the Board's confidence in the Company's financial strength.

Third Quarter 2014 Interim Management Statement 11th November.

This has moved ip very nicely over the past few trading sessions. I am finally in profit on all my holdings.

Interim Management Statement

Strong sales performance
· Corporate Benefits APE of £465 million, up 14%
· Protection APE of £70 million, up 11%
· Retirement Income outperforms the market with sales volumes down 12%, exceeding expectations and reflecting strong customer engagement
· Improving operating backdrop in FPI, with third quarter APE of £32 million up more than a third on the run-rate of the first two quarters of 2014
· Corporate Benefits positive net fund flows of £0.6 billion driving assets under administration to £21.4 billion
· Group VNB of £94 million is down £29 million, of which £24 million is the reduction in Retirement Income VNB
· Group APE of £690 million (30 September 2013: £670 million)
· Group PVNBP1 margin 2.4% (30 September 2013: 3.1%)
Strong capital position maintained
· IGCA2 of £2.2 billion, representing a coverage ratio of 233% (30 June 2014: 235%)
· Group available shareholder assets ("ASA") of £911 million
Operational highlights
· Disposal of Lombard completed and £317 million share buyback commenced
· Completion of the £760 million reallocation of annuities from with-profits funds, which will generate £7 million of sustainable free surplus ("SFS") p.a. from 2015
· Agreement to reallocate a further circa £650 million of annuities from with-profits funds, subject to regulatory non-objection, resulting in a SFS benefit of circa £5 million p.a. from 2015
· Good progress made towards preparing the launch of new retirement propositions in April 2015
· International IT platform project delivery is on track with the majority of new policies now being written on the new platform
· Application of enhanced investment strategy progressing well with further funds invested in syndicated loans and private placements

Looking good Skinny. Do you hold any of these?

Yes - I've got a longer term holding (Resolution) in my SIPP and a more recent ISA purchase.

Deutsche Bank Hold 326.40 326.40 330.00 335.00 Reiterates

That's Deutsche's target and an interesting point chart wise.

It's at 335p already. The target should be higher I would have thought.

FLG......Copied from Twitter.......

Thanks to another tweeter yest for flagging this one up,FLG breaking out into a resistance free area. 375p then 385p sp Targets. Very little resistance.

WOW.....skinny have you seen this after hours take over statement for FLG......talk about getting lucky........ bought just after 9.30 am.....big aswel.

Aviva agrees to possible 5.6 bln stg deal to buy Friends Life

21 Nov 2014 - 18:05

Nov 21 (Reuters) – Insurer Aviva Plc said it had reached agreement on a possible deal to buy Friends Life Group Plc for 5.6 billion pounds ($8.8 billion) in stock.

Under the terms of the possible offer, Aviva would offer Friends Life shareholders 0.74 shares for each Friends Life share. ...

The deal indicates a value of about 398.9 pence per Friends Life share, a 15 percent premium to the stock's Friday close.

Friends Life shareholders would also receive an amount in cash equal to any Friends Life final dividend for the 2014 financial year. (1 US dollar = 0.6388 British pound)

(Reporting by Roshni Menon in Bangalore; Editing by Saumyadeb Chakrabarty) ((roshni.menon@thomsonreuters.com; within UK +44 20 7542 1810, outside UK +91 80 6749 1136; Reuters Messaging: roshni.menon.thomsonreuters.com@reuters.net;)

What a super bit of news to end the week. Jackpot!

From one of the many articles this weekend. A crowning deal for Aviva's turnaround champion

"For investors on both sides the deal therefore appears to make sense. Although Friends’ shares have rebounded in recent weeks, the company’s strategic position from a stand-alone perspective is weak. It is operating a near-closed book on its individual business, and although its corporate book is growing, on its own Friends looks vulnerable.
For Aviva investors, the rationale is also clear. A larger company, greater cash flow – in line with Wilson’s strategy – and the potential for an enhanced dividend in time.".

Suspension of share buyback programme

Canaccord Genuity Buy 365.80 340.00 400.00 Reiterates

Credit Suisse Neutral 365.80 325.00 350.00 Reiterates

Aviva paying 'good price' for Friends Life, says Canaccord Genuity

Mon 24 November 2014 09:22 | A A A
No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.

Canaccord Genuity has lifted its target price for insurance firm Friends Life from 340p to 400p and repeated its 'buy' call, saying that the £5.6bn takeover offer from rival Aviva is a "good price" for shareholders.

The companies announced that they had agreed on terms for a possible all-share combination. Friends Life shareholders would get 0.74 Aviva shares for each Friends Life share they own, valuing Friends Life at 398.9p per share.

This is equal to a 15% premium to its closing price on Friday and a 28% premium to the three-month average, and close to its embedded value in the first half, Canaccord said.

Due diligence is now under way and Aviva has until 19 December to make a formal offer.

"We think this is a good price for Friends Life shareholders, as they should receive around embedded value for the business, albeit in shares, and not cash," said Canaccord analysts Ming Zhu and Ben Cohen.

While they have lifted their target price to equal the possible offer, the analysts said they see potential further upside from this level when they have more details about synergies from the deal.

"To a large extent, Friends Life's fair value will now be determined by Aviva's share price, while Aviva's share price will be determined by the enthusiasm by its shareholders for the industrial logic of the deal.

"Assuming an offer is made by 19 December, the details of planned synergies and cash-flow will be key to Aviva's share price performance."

Friends Life was trading 5.6% higher at 367.1p by 09:52 on Monday.

Canaccord Genuity has lifted its target price for insurance firm Friends Life from 340p to 400p and repeated its 'buy' call, saying that the £5.6bn takeover offer from rival Aviva is a "good price" for shareholders.

While they have lifted their target price to equal the possible offer, analysts said they see potential further upside from this level when more details about synergies from the deal are known