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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Prudential plc    PRU   GB0007099541

PRUDENTIAL PLC

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Prudential : Britain's Prudential to exit U.S. business, focus on Asia, Africa

08/11/2020 | 06:24am EST
The logo of British life insurer Prudential is seen on their building in London

British life insurer Prudential said on Tuesday it planned to spin off its U.S. business Jackson to focus on Africa and its largest market Asia, responding to investor pressure for a split.

Prudential's shares hit eight-week highs as investors cheered news the company would follow in the footsteps of peers Standard Life and Old Mutual, which have both divided up their operations in recent years.

"This new Prudential model will be a growth-oriented business," Prudential CEO Mike Wells, a former boss of Jackson, told a media call. "Jackson is ready to be a standalone."

U.S. hedge fund Third Point took a 5% stake in Prudential in February and called on management to split the company in two.

A minority initial public offering of Jackson is planned for the first half of 2021, with "full divestment over time", Prudential, which spun off its European unit M&G last year, said.

It had already sold an equity stake in the U.S. unit to Apollo Global-backed Athene Holding for $500 million in June.

Athene now owns 11% of Jackson and has reinsured $28 billion of its annuity portfolio. Wells said the investor was a "potential partner" for Jackson for further reinsurance transactions.

Prudential, which started life in London in 1848, will maintain its head office in the city, of which Third Point had been critical, but said it would cut costs. Wells did not say if there would be job losses.

Prudential's shares rose more than 4% before easing to 12.71 pounds per share by 1106 GMT, up 3.2%.

Operating profit fell 3% in the first half to $2.5 billion, hurt by the impact of the coronavirus pandemic, but was above a company-compiled consensus forecast of $2.4 billion.

Operating profit in Asia was up 14%, but down 19% at Jackson.

Analysts at Jefferies said the Jackson disposal would reduce the risk premium currently applied to Prudential, reiterating their hold rating.

Prudential said under a new dividend policy aligned to growth in the Asia and Africa businesses, it would make an interim payment of 5.37 cents per share, one-third of its expected full-year 2020 dividend of 16.1 cents.

Shore Capital said the expected full-year dividend represented a 55% cut from 2019 on a pro-forma basis.

(Editing by Sinead Cruise, Kirsten Donovan)

By Carolyn Cohn


© Reuters 2020
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Financials
Sales 2020 21 880 M 29 726 M 29 726 M
Net income 2020 2 126 M 2 888 M 2 888 M
Net Debt 2020 - - -
P/E ratio 2020 17,2x
Yield 2020 0,85%
Capitalization 37 179 M 50 537 M 50 511 M
Capi. / Sales 2020 1,70x
Capi. / Sales 2021 1,03x
Nbr of Employees 18 125
Free-Float 99,5%
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Technical analysis trends PRUDENTIAL PLC
Short TermMid-TermLong Term
TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 17
Average target price 1 433,96 GBX
Last Close Price 1 430,50 GBX
Spread / Highest target 18,8%
Spread / Average Target 0,24%
Spread / Lowest Target -30,1%
EPS Revisions
Managers and Directors
NameTitle
Michael Andrew Wells Group Chief Executive Officer & Executive Director
Shriti Vinodkant Vadera Chairman
Mark Thomas FitzPatrick Group COO, CFO & Executive Director
Kaikhushru Shiavax Nargolwala Independent Non-Executive Director
Philip John Remnant Senior Independent Non-Executive Director
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