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Friends Provident ::

Company Summary for Friends Provident PLC
HQ Address Pixham End Dorking Surrey RH4 1QA	Telephone Number Fax Number Website Email Number Of Employees Number Of UK Locations	0870 6083678 NA www.friendsprovident.co.uk NA 5072 1
Friends Provident PLC is a UK financial services group and a member of the FTSE100 Index. It offers a broadly based range of life and pensions products via independent financial advisers and through a number of direct marketing channels, and asset management including marketing of a wide range of investment products. With a history dating back to 1832, Friends Provident has three core businesses: The UK Life and Pensions business markets a comprehensive range of life protection, income protection, pensions and investment products for individual customers and corporate clients throughout the UK. The International Life and Pensions business operates throughout Europe, Asia, and the Middle East, and incorporates the Luxemburg based company Lombard International which specialises in providing life assurance based estate planning solutions. The Asset Management business - F&C Asset Management PLC - manages funds of some £107bn (as at 30 June 2006) and markets a wide range of investment products both to personal and institutional customers.

Activities in Sector(s)

Insurance & Assurance :	Life Assurance
Turnover in the Insurance and Assurance sector grown by 50% in the past year, rising to £206.7bn, with profits remaining stable at around £10.4m. Employee numbers have also remained relatively stable, dropping by only 1% to reach approximately 570,000 people over the same time period, indicating high productivity as decreased staff numbers have made a significant positive impact on turnover in the sector.

Presences in Region(s)
South East(1)

Key Financial Data

Latest

Year -1

Year -2

Year -3

Year -4

Turnover

UK Turnover

Overseas Turnover

Cost of Sales

Operating Profit

Profit Margin

Remuneration

Land & Building

Fixtures & Fittings

Plant & Vehicles

Stock & W.I.P

Short Term Loans & Overdrafts

Hire Purch. & Leas. (short t.)

Hire Purchase & Leas. (long t.)

£5,158.0m

£-229.0m

9.00

£267.0m

£977.0m

£969.0m

£8.0m

£-6,351.0m

37.00

£237.0m

£46.0m

£22.0m

£5.0m

£3,132.0m

£-3,140.0m

8.00

£205.0m

£21.0m

£4.0m

£431.0m

£3,217.0m

£-3,175.0m

8.00

£202.0m

£18.0m

£6.0m

£61.0m

£-37.0m

£196.0m

£24.0m

£8.0m

£66.0m

Key Employee Data

Latest

Year -1

Year -2

Year -3

Year -4

Number of Employees

Wages & Salaries

Pension Costs

Directors' Remuneration

Highest Paid Director

Average Remuneration per Employee

Turnover per Employee

Profit per Employee

5072.00
NA
NA
£5.0m
NA
52
1,016
-45

4968.00
£201.0m
NA
£4.8m
NA
47
196
-1,278

4532.00
£167.0m
NA
£5.2m
NA
45
691
-692

5104.00
£167.0m
NA
£4.0m
NA
39
630
-622

5714.00

£160.0m

£3.6m

-6

Company News
04 Feb 2008	3 disposals - 600 job losses - £40m cost reduction - Refocussed strategy - £5.16bn turnover - 5,072 staff
	Friends Provident revealed a drop in full year profit and put its F&C Asset Management, Lombard and Pantheon Financial businesses up for sale. Underlying profit before tax for the 12 months to 31 December 2007 is seen falling to £300m on a European Embedded Value basis from £509m in 2006 due to a persistency charge of £160m. But the additional embedded value basis changes in respect of development costs and corporate costs will slash this by a further £280m, it said, leaving profit at just £20m. In future, Friends intends to focus on its core business in the UK and International life and pensions market, especially protection products, annuities and international savings. The break-up had been widely expected ahead of today’s strategic review decision after the attempted merger with Resolution was gatecrashed by Pearl. Friends, the subject of persistent bid speculation since the Resolution tie-up collapsed, plans to reduce costs by £40m, 15% of the 2007 operating cost base, by the end of 2009, with the loss of around 600 jobs. Separately, FP revealed total life and pensions new business for 2007 increased by 8% to £7,662 million (2006: £7,074m). The 2007 figure was reduced by persistency assumption changes with a net negative impact of £75m. Total UK new business rose 7% to £4.44bn. Group pensions rose 14% to £2.61bn. Protection fell 4% to £413m while investment dropped 27% to £501m.
02 Feb 2008	Chief Executive appointed - £5.16bn turnover - 5,072 staff
	Friends Provident PLC has appointed Trevor Matthews as it's new Chief Executive. Matthews, the former Chief Executive of Standard Life Assurance, it's UK arm, is widely credited as turning around the recent fortunes of the Scottish life group and his appointment has been taken as an indication that Friends intends to remain independent. Before joining Standard Life in 2004, Matthews held key positions at Manulife Financial Corporation and senior positions in both National Australia Bank and Legal & General Australia. Friends Provident PLC is a leading UK financial services group and a member of the FTSE100 Index. It offers a broadly based range of life and pensions products via independent financial advisers and through a number of direct marketing channels, and asset management including marketing of a wide range of investment products.
25 Jan 2008	Possible takeover - US private equity firm - 2.7% stake - Turnover £5m - 5,000 staff
	US private equity firm JC Flowers is considering buying Friends Provident after acquired a 2.7% stake in the UK insurer. JC Flowers intends to approach the Board of Friends Provident with a view to developing a proposal that will deliver value for Friends Provident's shareholders. Friends Provident has a turnover of £5 billion and employs approximately 5,000 staff.
21 Dec 2007	£1.2bn fund frozen - £70m withdrawn in December - 118,000 individual investors - CEO resigned - Turnover £5bn - 5,000 staff
	Friends Provident has frozen its £1.2 billion flagship fund after £70 million was paid out in December 2008. The move affects up to 118,000 individual investors in its 24-year-old property fund, which invests in offices and retail developments in areas as diverse as Glasgow, Leadenhall Street in the City and Camden Wharf in North London. Britain's fourth-largest insurer suspended redemptions in the fund until up to June 2008. Previously investors would have had immediate access to their capital. Investors began to withdraw funds in Autumn 2007. The fund remains open to new investors. Friends Provident is currently conducting a strategic review. Friends Provident is being run on a day-to-day basis by Sir Adrian Montague, who became executive chairman after the departure of Philip Moore as chief executive. Philip Moore resigned after the collapse of an £8.4 billion agreed merger deal with Resolution, the closed-life fund specialist, in November 2007. Friends Provident has a turnover of £5 billion and employs approximately 5,000 staff.
13 Nov 2007	Proposed merger terminated – Business remains strong – Considering expansion of pensions business
	Friends Provident PLC (Friends), the life assurance group, has terminated its proposed merger with Resolution Group. The latter abandoned Friends’ offer in favour of a rival bid from Standard Life. Friends is disappointed that the merger is not proceeding as it believes that it would have been an excellent opportunity to create significant value for the shareholders of both companies and extend the influence of the Friends Provident brand to many more customers in the UK and overseas. Under the terms of the proposed merger agreement, Friends will receive an inducement fee of approximately £49m payable by Resolution. Friends has reaffirmed that it remains a strong, successful and growing business and is now considering expanding its group pensions business although it has less capital to finance growth. Although the group has fewer opportunities independently, its international business is still very successful and the performance of its F&C Asset Management division has improved. Friends had planned to target the group pensions market using proceeds from high margin protection business, but a slowdown in the housing market has resulted in most life assurers selling less of these protection products. Friends will not look to raise any additional funding but will draw down on existing debt arrangements.
08 Aug 2007	Steady Progress Reported - Difficult Protection Market - Underlying Profits Down 8% - Sales Up 13% to £3.43b
	Friends Provident Plc, which is planning to merge with Resolution, has recorded steady progress during the first half, despite a difficult protection market affecting its UK business. Underlying profits fell by 8% to £111m, from £120m, on a statutory basis in the six months to June 2007, although using the embedded value method Friends recorded an increase of 7% from £247m to £264m. Sales rose by 13% to £3.43b, although margins fell from 2.9% to 2.8%. The UK was offset by another good performance abroad, with Friends Provident International and Lombard both delivering good performances against strong comparatives. The group raised its interim dividend payment by 2%. Philip Moore is the Chief Executive of Friends Provident Plc.
23 Jul 2007	£8.3bn merger imminent - life assurance sectors - other mergers may be triggered
	Friends Provident and Resolution Life are close to agreeing an £8.3bn merger that could trigger a further round of consolidation in the life company sector. Talks between the two companies have been on-going for some months and, while a deal is not certain, the markets believe an announcement is imminent and that other companies will be on alert for a new wave of merger activity, including Standard Life. Resolution, which has grown rapidly by buying closed life or 'zombie' funds, has recently moved into the open funds market and is known to be seeking a partner. It forged a £1.8bn merger with Glasgow-based Britannic in 2005 and last year paid £3.6bn for Abbey National's life insurance business, which took it into more active insurance. Speculation about a merger with another life company has grown as Resolution's growth appeared to run out of steam. Founder Clive Cowdery dropped hints that he may sell the business and, in March, chief executive Paul Thompson quit suddenly. It was suggested at the time that Thompson was in talks with Friends Provident and Standard Life about a deal. Since his departure it is understood some shareholders have become restless for clarification on the company's future. There was vague talk that Royal London, owner of Scottish Life, would reverse into Resolution, providing the latter with a partner and the former with greater access to capital, but that came to nothing. Friends Provident has been a subject of takeover speculation since it demutualised six years ago. It was seen to be too small to survive and has been linked with French assurer Axa and JC Flowers, the American private equity firm. There was talk that Flowers had approached Standard Life about engineering a joint takeover of Friends.
16 May 2007	2 UK business acquisitions - Consideration £91.8m
	Friends Provident plc has, in two separate deals, agreed to acquire two UK financial intermediary businesses through it’s subsidiary Friends Provident Distribution Holdings. Sesame Group Limited is one of the largest providers of support services to financial advisers in the UK. Sesame's membership exceeds 7,500 registered individuals. Pantheon Financial Limited is an independent financial adviser firm specialising in the high net worth and ultra high net worth markets. It currently has over 15,000 clients. Friends Provident will acquire 100% of Sesame from Misys Services Limited for a consideration of £75 million. On the 30 November 2006, Sesame reported operating profit of £8 million for the six-month period, which compares with £8.6 million for the 12 months ended 31 May 2006. Friends Provident will acquire 100% of Pantheon Financial Limited for an upfront payment of £16.8 million in cash.
20 Mar 2007	Profits Fall to £509m - Lower Profit within Asset Management Business - New Business Sales Up 31%
	Friends Provident Plc, has recorded a 3% fall in full-year underlying profits, attributed to lower profit within its Asset Management business. Group underlying profits before tax for the year to end-December 2006, fell to £509m, compared to £524m in 2005, lower than expected. Pre-tax profits fell 34% to £398m. In addition, the group cautioned that it is too early to tell whether it will attain its 2008 target of £180m to £200m for new business profits, set in October 2006. Elsewhere, in asset management, overall, funds under management as at 31 December 2006 was £104b, compared with £131b in 2005. Across 2006, F&C experienced net outflows of £32b of assets under management. New business sales on the Present Value of New Business Premiums (PVNBP) basis was 31% higher during the period at £7.07b, while life and pensions new business was up 42% to £204m. Record levels of new business was achieved in UK Life & Pensions, with sales up by 30% to £4.16b giving a market share of 5.5%, up from 5.2% in 2005. The group expects the overall life and pensions market to increase by 5-10%, although recent market turbulence, if prolonged, may have a dampening effect. Philip Moore is the Chief Executive of Friends Provident Plc.
20 Nov 2006	Considering Merger - Business Developments
	Friends Provident, is considering a merger with broker, Keefe, Bruyette & Woods.
28 Apr 2006	Friends Provident sales of life and pensions rose 26% in first quarter – Above-forecasts amount of £1.3bn boosted by home pensions sales and stronger-than-expected growth abroad – Sales in core UK market climbed 23% to £856m – Boosted by group and individual pension sales ahead of changes to UK regulations April 2006 – Income protection sales down 11% as recovering housing market failed to offset strong competition – New distribution partnerships and pricing changes – Positive outlook for its market share – Annuity sales fell 17% – Focused on margins – International sales up 34% at £475m – 21% rise at Lombard bought 2005 – Gain was benefit from improved investment markets – Friends Provident International record quarterly sales of £241m –Up 49% driven by Asia and the Middle East – Positive outlook for both FPI and Lombard – Expect to benefit from dominant final quarter.
23 Mar 2006	Friends Provident increase in overseas sales helped fuel profits – Expecting to increase its share of UK market – Could gain more from takeover deals within the industry – Expecting more market consolidation 2006-2011 – Friends underlying pre-tax profit £524m for 2005 – Up from £392m 2004 – Above £522m forecast – Not appeared to perform as well as rivals Aviva, Prudential and Legal & General.
05 Dec 2007	Remuneration is £267.0m in the current year, an increase from £237.0m last year and representing a growth of 36.2% over the past five years.
05 Dec 2007	Number of Employees is 5,072.0 in the current year, an increase from 4,968.0 last year and representing a decline of 11.2% over the past five years.
05 Dec 2007	Directors' Remuneration is £5.0m in the current year, an increase from £4.8m last year and representing a growth of 40.5% over the past five years.
05 Dec 2007	Average Remuneration per Employee is 52.0 in the current year, an increase from 47.0 last year and representing a growth of 52.9% over the past five years.

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