FRIENDS Provident added to City disappointment over a 20 per cent fall in half-year profits yesterday by warning that a sale of its Lombard arm was far from certain.
The group put the operation up for sale in January after a review identified Lombard and two other wealth management businesses as non-core.
Friends said yesterday that Lombard had attracted plenty of interest, but the current credit environment
made implementation of any takeover proposals "challenging". It is thought Lombard could be worth around £700 million. The shares fell 4.5p to 87.2p on the news.
Friends has already pulled the sale of its high-net-worth business Pantheon, while it is still looking to offload its 53 per cent stake in F&C Asset Management.
Friends will now look to concentrate on core areas such as protection, segments of group pensions and annuities for existing customers, with a focus on profitability rather than volume.
The company, now headed by former Standard Life executive Trevor Matthews, said the planned withdrawal from certain market segments meant a short-term hit to results.
New business sales in the UK were down by 12 per cent to £319.6m. However, difficult trading conditions also contributed to a 20 per cent fall in half-year operating profits to £211m.
Broker Panmure Gordon described the results as "a little disappointing". But chairman Sir Adrian Montague stressed the company's strategy did not depend on achieving the asset sales, with any future proceeds due to go to shareholders.
He said: "The financial results … should not mask the fact that a stronger and more profitable business will emerge when the strategy is fully implemented."
The full article contains 287 words and appears in The Scotsman newspaper.
