Standard Life UK profits down 5%; Sales up 20%

Standard Life UK profits fell in the first half of the year, despite strong sales figures, largely due to pensions outflows.

Pre-tax profits on an IFRS basis were £76m, down from £80m for H1 2009.

Overall, the group reported operating profits (IFRS basis) rose 10% to £182m in the first half of the year, helped by the international parts of the business. Standard Life has proposed an interim dividend of 4.35p per share, up 4.8% from 4.15p in 2009.

In the UK, retail net flows improved to a net outflow of £404m, compared to £.1bn in 2009, driven by strong SIPP and mutual funds sales. This was led by £1.1bn in net flows for the company's individual SIPP business.

However, this was offset by increased outflows across all pension products. This was mainly due to the change in the minimum age at which customers can take retirement benefits from 50 to 55, which came into force in April 2010, says the company.

Net outflows were highest in the company's UK individual pensions business, at £900m. Legacy life business also saw heavy outflows of £500m.

UK retail sales on a PVNBP basis were up 20% to £3.3bn, compared to £2.8bn for the first half of 2009.

Individual pensions, including individual SIPPs, rose 19% to £2.2bn from £1.8bn in H1 2009.

Within this, individual SIPP sales increased by 24% to £1.9bn, up from £1.5bn compared to 2009.

Standard Life says the positive showing for SIPPs was driven by strong growth in customer accounts, greater activity around the tax year end, and higher average market values which increased incoming transfer values.

Savings and investment sales grew by 37% to £954m, up from £696m in 2009, with mutual fund sales up 59% to £863m from £542m, driven by a significant increase in sales through Standard Life's wrap platform.

Assets under administration on the company's wrap platform rose by 36% to £4.9bn at to end of June, compared to £3.6bn to 31 December 2009, and recently passed the £5bn milestone.

However, Standard Life says this was partly offset by slumping investment bonds sales which decreased by 41% to £91m from £154m in H1 2009.

The company's share price suffered heavy losses in early trading, losing 3.65%, or 7.9p, to 208.5p per share by 9am.