2007 unaudited interim results
Results summary
European Embedded Value (EEV) basis results*
| Half year 2007 £m | Half year 2006 £m | Full year 2006 £m | |
|---|---|---|---|
| UK insurance operations | 462 | 336 | 686 |
| M&G | 140 | 100 | 204 |
| UK operations | 602 | 436 | 890 |
| US operations | 351 | 350 | 718 |
| Asian operations | 520 | 374 | 864 |
| Other income and expenditure | (147) | (141) | (298) |
| UK restructuring costs | 0 | (12) | (41) |
| Operating profit from continuing operations based on longer-term investment returns* | 1,326 | 1,007 | 2,133 |
| Short-term fluctuations in investment returns | 241 | 73 | 738 |
| Mark to market value movements on core borrowings | 113 | 168 | 85 |
| Shareholders’ share of actuarial gains and losses on defined benefit pension schemes | 125 | 246 | 207 |
| Effect of changes in economic assumptions and time value of cost of options and guarantees | 275 | (20) | 59 |
| Profit from continuing operations before tax | 2,080 | 1,474 | 3,222 |
| Half year 2007 |
Half year 2006 |
Full year 2006 |
|
|---|---|---|---|
| Operating earnings per share from continuing operations after related tax and minority interests* | 39.4p | 29.3p | 62.1p |
| Basic earnings per share | 72.8p | 43.8p | 91.7p |
| Shareholders’ equity, excluding minority interests | £13.4bn | £10.9bn | £11.9bn |
International Financial Reporting Standards (IFRS) basis results*
Statutory IFRS basis results | Half year 2007 |
Half year 2006 |
Full year 2006 |
|---|---|---|---|
| Profit after tax attributable to equity holders of the Company | £715m | £449m | £874m |
| Basic earnings per share | 29.3p | 18.7p | 36.2p |
| Shareholders’ equity, excluding minority interests | £5.9bn | £5.0bn | £5.5bn |
Supplementary IFRS basis information | Half year 2007 |
Half year 2006 |
Full year 2006 |
|---|---|---|---|
| Operating profit from continuing operations based on longer-term investment returns* | £601m | £498m | £1,050m |
| Operating earnings per share from continuing operations after related tax and minority interests* | 16.3p | 14.0p | 30.9p |
| Half year 2007 | Half year 2006 | Full year 2006 | |
|---|---|---|---|
| Dividends per share declared and paid in reporting period | 11.72p | 11.02p | 16.44p |
| Dividends per share relating to reporting period | 5.70p | 5.42p | 17.14p |
| Funds under management | £256bn | £238bn | £251bn |
* Basis of preparation
Results bases
The EEV basis results have been prepared in accordance with the European Embedded Value Principles issued by the CFO Forum of European Insurance Companies in May
2004. The basis of preparation of the statutory IFRS basis results and supplementary IFRS basis information is consistent with that applied for the 2006 full year results and
financial statements.
Operating profit based on longer-term investment returns
Consistent with previous reporting practice, the Group analyses its EEV basis results and provides supplementary analysis of IFRS profit before tax attributable to shareholders, so
as to distinguish operating profit based on longer-term investment returns from other constituent elements of total profit. On both the EEV and IFRS bases, operating earnings per
share are calculated using operating profits from continuing operations based on longer-term investment returns, after tax and minority interests. These profits exclude short-term
fluctuations in investment returns and the shareholders’ share of actuarial gains and losses on defined benefit pension schemes. Under the EEV basis, where additional profit and
loss effects arise, operating profit based on longer-term investment returns also excludes the mark to market value movements on core borrowings and the effect of changes in
economic assumptions and changes in the time value of cost of options and guarantees arising from changes in economic factors. After adjusting for related tax and minority
interests, the amounts for these items are included in the calculation of basic earnings per share.
For half year 2007, the EEV basis operating profit from continuing operations based on longer-term investment returns before tax of £1,326m includes a credit of £92m that arises from including the benefits, grossed up for notional tax, of altered corporate tax rates for the UK, Singapore and China. Further details are explained in note 7 to the EEV basis supplementary information.
Discontinued operations
The results for continuing operations shown above and throughout this Interim Report exclude those in respect of discontinued banking operations. On 1 May 2007, the
Company sold Egg Banking plc. Accordingly, the presentation of the comparative results for half year and full year 2006 has been adjusted from those previously published.
