7:00pm Sunday 13th April 2008
By Chris Adamson
LV= the UK's largest friendly society, has reported a dramatic turnaround in its financial position after posting encouraging annual results for 2007.
Last year the Group operating profit before tax was £49.6m, which was in stark contrast to a loss of £20.1m in 2006. However on a more cautious note the total Group profit before tax reached £56.4m, down from £113.7m in 2006 - in part hit by claims for last year's flooding.
This leaves Poole based LV = in a strong financial position for 2008 with £1.3bn of capital resources. The company employs more than 2,000 people (most of them locally) and has 2.5 million customers and members, and manages £8 billion on their behalf.
Commenting on the results, Mike Rogers, Group Chief Executive of LV= said: "2007 was the first year of our five year business transformation plan. Our underlying performance was encouraging and lays a solid platform for future growth. Our life and pensions business performed strongly and, with the new flexible retirement business on-board, is in a good position to take advantage of expected growth in the retirement market.
"In our general insurance business sales were up significantly, although performance overall was impacted by significant investment in restructuring and new technology, and adverse weather events including £33m in flood claims.
"2007 was also a year for consolidation in certain areas and there were exceptional costs associated with our exit from non-profitable activities in whole of market advice provision, and personal loan sales. We also entered the last stages of our ongoing exit from credit cards."
Looking ahead Mr Rogers added: "In the first quarter of 2008, despite turbulent market conditions, our financial strength and trading momentum continued. General insurance new business sales from all channels were up 36 per cent on the first quarter of 2007 and life and pensions sales were up 113 per cent. We have also successfully concluded in the first quarter of 2008 both the transfer of our IT arrangements to new suppliers, and the recapture of our life processing operations.
"We have come through a huge amount of change and strategic development. We are now well placed to compete successfully going forward and achieve our ambitious but realistic plans, and grow the value of the business for our members."
In the financial report details operating profit on the life and pensions business increased by from £75.5m to £100.1m and Life and pensions APE was up from £25.8m to £35.1m, including six months of new retirement solutions business .
Under the head of General Insurance Sales (Gross Written Premiums), new general insurance products were up 39 per cent to £89.2m, with car insurance sales up 25 per cent.
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