Prudential shares tipped as a ‘buy’ as insurer beats City analysts’ forecasts

11th August 2015


As Prudential reports its interim results Ian Forrest, investment research analyst at The Share Centre, explains what they mean for investors…

On Tuesday Prudential’s interim results beat market expectations and showed that all of the insurance giant’s principal regions are enjoying good growth levels.

Operating profits rose 17% to £1.88bn, with Hong Kong seeing a remarkable 84% surge in sales in the first half. Additionally, the company’s Eastspring fund management group, based in Asia, reported inflows of £4.6bn in the first half, taking its total assets to a record £85.3bn. This represents a 28% increase over last year, further demonstrating that the region remains the main driver of growth for the company.

Investors should also acknowledge that the UK and US life businesses delivered healthy profit growth, whilst its investment group M&G saw operating profits increase 11%. Furthermore, current investors will be pleased to note that the interim dividend was lifted 10% to 12.3p.

Prudential’s interim results mark a good start for the new chief executive, Mike Wells, who recently took over from Tidjane Thiam, after running the group’s North American business. Shares in the group have underperformed the market in recent weeks, but interested investors should remember that this follows several years of relative outperformance.

We continue to recommend Prudential as a ‘buy’ for investors looking for a positive investment idea that spans a number of regions. The Asian growth story continues to remain highly attractive, along with strong UK and US operations.


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