Comment: Markets finally take a shine to Standard’s David Nish
IT HAS to be said that the markets took a little time to warm to David Nish’s plans for Standard Life. A little too much management-speak and a tentative first year in charge clouded any indication that the chief executive had a clear strategy.
In recent months he’s convinced sceptics that the insurer is being steered well away from the rocks and is now progressing at a rate of knots. Growth in the UK is particularly encouraging in spite of industry-wide concern that the public have been deserting the pensions and savings industry.
It’s not often that brokers use language such as “stunning” and “shooting the lights out”, but that was the reaction to yesterday’s half-year figures. Standard Life, once seen as a basket case, is being held up as a model of achievement and the best prepared for imminent changes to the way products are sold, thanks in large part to introducing non-commission sales practices when it floated six years ago.
The stronger balance sheet is down to improved cash flow and a disciplined approach to costs and by leveraging what Nish refers to as its “proposition”. Throughout the years of transition from mutual to public ownership, from loss-maker to profitable enterprise, the brand has retained a robust presence in the marketplace.
Nish was being coy on acquisitions, but he is sufficiently confident in the core business that he believes it can achieve its targets organically.
Its growth has also given the board enough confidence to reward shareholders with a chunky rise in the dividend.
The only blot on Nish’s copybook is the fall in profits in the Canadian business, which he admits is a work in progress. Analysts were sufficiently forgiving to push the shares up to the top of the FTSE 100 index, a rare table-topping performance for a company which has been slow to reward those who backed it in 2006 but now seems to be delivering on its promises.
Fortune telling is not as easy as it sounds
think back 20 years and to what sort of predictions you might have made for the whisky and car industries, Rangers Football Club and banking.
Whisky, deemed an old man’s drink, and the car industry, still bearing the scars of industrial unrest, would have been near the top of many people’s contenders for those on the way down.
Rangers were in the middle of their nine-in-a-row run of league titles and looked unassailable. The banks were ready to roll into more than a decade of unparalleled growth.
Few would have guessed in 1992 that by now we’d be toasting the best of times for the car industry with a dram of one of the world’s most successful Scottish exports, or that Rangers supporters would be pouring from the same bottle to drown their sorrows and reflecting on the near-collapse of the banks.
Yesterday’s announcement from Jaguar Land Rover is yet further evidence of how a traditional industry is defying economic gravity. It has moved to 24-hour production at its Halewood plant in Merseyside and is employing three times the number of workers than three years ago.
JLR’s success is shared across the car industry and trickles down to the components firms that support it. It will be music to the ears of Prime Minister David Cameron who is determined to rebalance the economy towards industry.
Such progress also supports the view that, even in the grip of recession, there are plenty of winners.
A degree of surprise is not deserved
A COUPLE of weeks ago Kentucky Fried Chicken surprised the education establishment by announcing its own degree courses. Now Pearson, the publisher of the Financial Times and Penguin Books, is following suit.
Pearson is the first FTSE-100 company to directly deliver an undergraduate course but it is unlikely to be the last. Students will be interested in tuition fees that undercut universities and the fact that the degrees are validated by top colleges.
Companies will see it as a means to produce students moulded to their requirements.
Sponsored degrees are not a new idea but it looks like they may become a little more popular.
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Thursday 20 June 2013
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