Prudential Share Price Spiked Higher, Then Fell on Its FY23 Results

The Prudential plc (LON: PRU) share price spiked higher and fell 3% after the company unveiled its annual financial figures for the year ended December 31, 2023. The announcement underscores the company’s significant growth and robust financial health, marking notable achievements across several key financial metrics.

Regarding new business profitability, Prudential reported a striking increase of 45% to $3,125 million on a constant exchange rate basis and a 43% increase on an actual exchange rate basis. 

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When adjustments were made to exclude the impact of interest rate fluctuations and other economic factors, the growth in new business profit was even more impressive, standing at 47% (45% on actual rates). 

This growth indicates Prudential’s successful strategies and ability to capitalise on new opportunities in the insurance and financial services sectors. 

The company also highlighted its capability to generate a substantial operating free surplus from its ongoing insurance and asset management operations, posting a figure of $2,740 million for 2023, slightly above the previous year’s figure of $2,725 million ($2,760 million in actual terms).

The steady performance reflects Prudential’s operational efficiency and robust management of its in-force business. Adjusted operating profit saw a healthy uptick, registering an 8% increase to $2,893 million on a constant exchange rate basis and a 6% increase on an actual rate basis. The growth is a testament to the company’s solid underlying business performance and operational excellence. 

The Embedded Value (EEV) of shareholders’ equity also experienced growth, rising 7% to $45.3 billion, which translates to 1,643 cents per share on an Actual Exchange Rate (AER) basis. This increase underscores Prudential’s intrinsic value and financial strength, reflecting positively on its wealth generation capabilities and financial resilience.

Prudential’s Group-Wide Supervision (GWS) shareholder capital surplus over its Group Capital Requirement Policy (GCPR) stood at $16.1 billion, showcasing a robust cover ratio of 295%. Although this represents a slight decrease from the 307% cover ratio recorded at the end of 2022, this metric highlights the company’s strong capital position and its ability to comfortably meet regulatory requirements.

The company also announced a generous return to its shareholders, with a second interim dividend of 14.21 cents per share. This brings the total dividend for the year to 20.47 cents per share, marking a 9% increase from the previous year.

Prudential share price. 

The Prudential share price spiked higher and fell 2.99% to trade at 756.7p from Tuesday’s closing price of 780.0p.