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raise-the-standard.com |
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You can hear an interview with Paul Lewis talking to me on Money Box at 12.04 on Saturday 22 April 2006- http://news.bbc.co.uk/1/hi/programmes/moneybox/4930574.stm Here is the transcript on the BBC's Money Box website. In our campaign, we have had to read many more articles than ever before. This has given us an insight into the tough job that journalists face. On March 17, Standard Life released its results for 2004. These are deliberately opaque. Journalists wanted to make sense of the financial information - it wasn't given. We read many well written articles - in particular: The Guardian's Jill Treanor; The Scotsman's John Bowker, The Telegraph's Andrew Cave, The Herald's Ben Griffiths and The Evening Standard's Steve Hawkes
It has taken several days to go through the numbers and I have written about them below. All of my information comes from company documents. All of it should be made readily available to the journalists at the company's press briefings. Then they could tell us what is really happening at Standard Life. Mike Hogan looks at Standard Life’s results for 2004 The results show how poor Standard Life has become since 1999. These are its own figures in £ billions:
For readers who want to see more of the figures: Standard Life’s capital resources 1999-2004 For readers who want the Standard Life source documents for 1999-2004, go to pages 70 and 71: Offering Circular SL Mac Plc 11/2004 ; and Standard Life's 2004 results Since 2002, Standard has hidden its impoverishment (and stayed in business) by borrowings – from zero to £1.6 billion today – and by accounting changes – worth £1.6 billion too. These are sticking plasters on large wounds. Debt has to be repaid. Where the debt hides losses, assets have to be sold or new investors brought in to repay it. The accounting changes reflect the reduced payouts on with profits policies. Members have paid for the losses. It’s clear that Standard has no choice but to demutualise and try to raise new capital. The chairman, Brian Stewart, a long serving director, says: “We have an outstanding Board that governs Standard Life well, with its individual and collective expertise.” The company’s impoverishment proves the opposite. There is little ground for celebration in the operating results. UK Life and Pensions accounts for 2/3 of group business. Year on year sales fell by 13%. Prudential’s grew by 40% and Aviva’s by 7.8%. New products are mentioned but no numbers. It’s impossible to judge if the business is on the mend. What is certain is that the competition is tough and well heeled. Investments grew by 11%. Third party business grew slightly faster, and was up from 18% to 19% of total. Profitability is not mentioned. Bank also changed its accounting to flatter its figures. It has £10.2 billion of mortgages and makes (old style) £6.8 million pre-tax. This is an extraordinary low margin of 0.067%. Healthcare lost money again – (£6.1million) at 31/12/04. The small overseas companies did better – Canada up 2.5%, with Germany up by 134% year on year, as a result of one off tax changes. Conclusion The 2004 results are ghastly. Wealth has shrunk again, so 2004 was a loss making year. We are almost three months into 2005. We have no figures to show how the business is performing. Members can take no comfort from these figures. It’s our money at risk – members need to see what’s going on.
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