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Royal London comes through 'difficult' six months with £358m profit

Royal London comes through 'difficult' six months with £358m profit

Royal London survived what it described as a 'difficult' first half of the year to post a pre-tax profit of £358 million. 

The mutual's chief executive Phil Loney (pictured) suggested reaching the end of auto-enrolment roll out and 'sluggish economic growth' created 'a challenging backdrop for pensions and investment companies in the first half of 2018'.

Despite Loney's prognosis Royal London's pre-tax profit rose 9% from £327 million in the first half of 2017 to £358 million this year as individual pension and protection sales offset the impact of fewer group pension sign-ups. 

New pension and drawdown sales were worth £3.6 billion to Royal London in the first six months of the year, 23% higher than in 2017 when they were worth £2.9 billion. 

Royal London cited a number of reasons for this increase in pension sales, including its popularity with people taking defined benefit pension transfers

'Our drawdown offering maintains one of the leading market positions and the performance of our governed investment portfolios has made our pension products popular with customers and advisers in the pension transfer market,' the company said. 

Royal London's platform business, which includes national advice firm Succession's wrap and Ascentric, had a solid if unspectacular first half of the year as it recorded net inflows of £612 million, exactly the same amount it recorded last year. 

Over the six months, Royal London has moved the first lot of Ascentric's advised clients to new technology provided by Bravura. Ascentric chief executive Jon Taylor left the platform after the long-awaited technology move finally started in May.

Although Ascentric has not been beset by the same platform technology problems as rivals such as Aegon and Aviva, New Model Adviser® revealed in June some clients had not received income payments after the move. 

Protection sales through advisers also increased 14% to £383 million in the first half of the year, compared with £337 million at the same time last year.

Royal London's operating profit rose slightly from £185 million last year to £187 million in the first six months of 2018.

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