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Prudential profit up on strong second half

UK insurance company Prudential has record a significant pretax profit increase for 2004 on the back of good second half year sales of life insurance and pensions.

For the full year, the financial group, the second largest insurer in the UK, recorded a 39% increase in pre-tax operating profit of GBP1.1 billion, attained largely due to a 79% increase in profit in the second half of the year.

According to calculations by Bloomberg, Prudential earned GBP732 million in the last six months of the fiscal year, compared to GBP409 million in 2003.

The Prudential board has decided to recommend to shareholders a final dividend for the year of 10.65 pence per share, which together with the restated interim dividend of 5.19 pence, makes a total amount of 15.84 pence. This represents growth of 3% on the 2003 dividend of 15.38 pence

Commenting on the results, Jonathan Bloomer, Prudential Group’s chief executive, said: Prudential has built strong positions in three of the most attractive savings markets in the world. In 2004, each of our three regional insurance businesses delivered double-digit growth in sales and profits. As a result, we registered record Group insurance APE sales and a 23% increase in new business achieved profits.

Bloomer added: The UK market is starting to recover after three years of decline and, as the rise of 40% in new business achieved profits shows, it is clear that the changes we have made to the business are enabling us to take advantage of this upturn.

In the US, we continue to outperform the market, and in 2004 our business there returned $120 million to the Group. We expect this to be $150 million in 2005, and to rise thereafter. In Asia, new business achieved profits rose 19% and margins remain attractive. We see excellent growth prospects throughout the region, especially in China and India, he concluded.

Looking to the future the company said that it was on track to deliver sustainable, profitable growth and to achieve its target returns on capital in 2005 and beyond.