Prudential hikes dividend thanks to profit growth following ‘relentless focus’ on new strategy
The Asia-focused insurer announced a second dividend of 14.21 cents per share, making a full year dividend of 20.47 cents.
Prudential has upped its dividend after reporting strong growth in new business over 2023, which the firm put down to its “relentless focus” on its new strategy.
New business profit, a key gauge of future profitability, rose 45 per cent year-on-year on a constant current basis to $3.1bn (£2.4bn). Sales growth has continued in the first two months of 2024, the insurer said.
Adjusted operating profit climbed eight per cent to $2.9bn (£2.3bn) from $2.7bn (£2.1bn) previously, slightly ahead of analyst expectations. It generated a profit after tax of $1.7bn (£1.3bn) in 2023, a big swing from the loss of $997m (£784m) reported the year before.
Prudential said Hong Kong was a significant contributor to growth, accounting for 45 per cent of new business profits in the period.
New business activity grew in 17 out of its 22 life markets, while it managed to increase its market share in seven Asian life markets.
The Asia-focused insurer announced a second dividend of 14.21 cents (11.2p) per share, making a full-year dividend of 20.47 cents (16.1p). This was up nine per cent on last year.
“These are a very strong set of results while operating in a challenging macro environment, with new business profit up 45 per cent driven by a relentless focus on execution in our markets in Asia and Africa,” Anil Wadhani, chief executive, said.
Last summer, Prudential announced a new plan to ramp up growth outside of Europe.
Under the new plans, Prudential said it was looking to growing new business profit at 15-20 per cent a year between 2022 and 2027, as well as targeting double-digit growth in the free surplus cash it generates from its insurance and asset management businesses in the same period.
“We are increasingly confident in achieving our 2027 financial and strategic objectives and in accelerating value creation for our shareholders,” Wadhani said.
Matt Britzman, equity analyst at Hargreaves Lansdown said Prudential had produced “a knockout set of full-year results”.
“Performance has been supercharged by a reopening of the border between mainland China and Hong Kong last year, boosting demand for Prudential’s products. This is excellent news for the Hong Kong operation, which boasts a market-leading position for products aimed at visitors from mainland China,” he continued.
