Shares in Standard Life (LSE: SL) lifted by just over 2.5% in early trade, following an interim update that contained decent first-half results as well as a warning if the ‘Yes’ vote won in next month’s Scottish independence referendum.
The Edinburgh-headquartered insurer listed the forthcoming referendum as a principal risk to the insurer’s strategic plans, citing issues including: “the currency that an independent Scotland would use; the approach to individual taxation, especially around savings and pensions, as a consequence of any constitutional change; the shape and role of the monetary system; the arrangements for financial services regulation and consumer protection in an independent Scotland; and whether agreement and ratification of an independent Scotland’s membership to the European Union would be achieved by the target date (currently 24 March 2016)”.
Back in May, Standard Life outlined contingency plans in the event of a ‘Yes’ vote to move some operations from Scotland to elsewhere in the UK, while management said that it could even register its funds in England in order to protect its position in the market.
Elsewhere in today’s update, the insurer said total income rose to £940m (against £900m in H1 2013) and reported a 12% increase in pre-tax operating profit across the group to £339m from £304m at half-time in 2013. This was boosted by strong performances from the UK and Europe, Canada and its Investments units, while its Asia and Emerging Markets sector returned to profitability. Investors will also note that Standard Life’s dividend rose 7.3% to 5.6p per share from 5.22p.
Chief executive David Nish commented:
“Standard Life has continued to perform well in the first half of 2014, driven by our focus on delivering value for money for all of our customers. We have increased revenues, profits and cash, and now have assets under administration of £254bn.
“We have an excellent track record of succeeding in evolving markets and we are well placed to deal with the far-reaching reforms to the savings and retirement income rules, announced earlier this year by the UK Government.”
Standard Life has been one of the most vocal businesses regarding the impact of a ‘Yes’ vote in the Scottish referendum, and today emphasised that it has not received any further clarity has been provided on concerns it raised earlier in the year that could substantially affect the business.
