24 July 2012 – interim results

The financial group has issued interim results for the six months to 30 June which have relieved the market.  Although adjusted pre-tax profits fell to $121m (2011: $231m) for earnings per share of 4.8c (2011: 9.8c), the fact that the group had net cash of $564m at the end of the period provides some comfort.  The group has also confirmed that it intends to pay a full year dividend of 22c, paying 9.5c at the interim stage.  The group is on track to deliver $95m of cost savings as announced in March but has also revealed plans for further savings of $100m over the next 18 months.  Clearly sentiment towards the stock is very negative at the moment and it may take some time to rebuild confidence.  Nevertheless, for those readers who like to take a punt the shares are a SPECULATIVE BUY.