(Alliance News) - Standard Life Aberdeen said Tuesday it has agreed to sell the nearly 200-year-old 'Standard Life' brand to Phoenix Group Holdings and come up with a new brand for itself.
Standard Life Aberdeen said the sale of its iconic brand was part of an agreement to simplify and extend its strategic partnership with Phoenix Group.
The strategic asset management partnership - under which Standard Life Aberdeen currently manages around GBP147.4 billion of Phoenix Group assets - will be extended and will now operate until at least 2031.
Standard Life Aberdeen will buy the Wrap SIPP and Wrap Onshore Bond businesses from Phoenix, to bolster its offering for its UK financial adviser clients in the form of its Wrap and Elevate platforms, and will also acquire the TIP business from Phoenix - the upfront cost of all this being GBP62.5 million, though this is expected to be offset in part by expected payments from Phoenix relating to the profits of the business prior to completion of the legal transfer.
Meanwhile, Standard Life Aberdeen will sell the 'Standard Life' brand to Phoenix Group during the course of 2021. Standard Life Aberdeen has initiated a branding review, the outcome of which it will announce later this year.
"The 'Standard Life' brand has an important heritage. In the UK, it has strong recognition as a life insurance and workplace pensions brand. This is closely aligned with Phoenix's strategy and customer base. This is much less the case with the business we are building at Standard Life Aberdeen, which is focused on global asset management, our market-leading platforms offerings to UK financial advisers and their customers, and our UK savings and wealth businesses," said Standard Life Aberdeen Chief Executive Stephen Bird
"That's why I am excited about the work we are doing on our own brand, which we look forward to sharing later this year."
Standard Life was founded in 1825. In 2017, it merged with Aberdeen Asset Management to become Standard Life Aberdeen. In 2018, Standard Life Assurance Ltd became part of the Phoenix Group.
Standard Life Aberdeen shares were up 1.3% early Tuesday. Phoenix Group was up 0.8%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.8% at 6,667.69
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Hang Seng: up 1.3% at 30,703.23
Nikkei 225: Tokyo market closed for holiday.
DJIA: closed up 27.37 points, or 0.1% at 31,521.69
S&P 500: closed down 30.21 points, or 0.8%, at 3,876.50
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EUR: up at USD1.2175 (USD1.2145)
GBP: up at USD1.4083 (USD1.4060)
USD: firm at JPY105.13 (JPY105.07)
Gold: soft at USD1,809.53 per ounce (USD1,810.01)
Oil (Brent): up at USD66.14 a barrel (USD64.45)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
Japan Emperor's Birthday. Financial markets closed.
1100 GMT UK CBI distributive trades survey
1100 CET EU harmonised consumer price index
1000 EST US consumer confidence index
1000 EST US Fed Chair Powell presents Monetary Policy Report to Senate Banking Committee
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The UK unemployment rate edged up in the three months to December, as expected, but showed signs of stabilising as the UK government set out its plans to permanently lift the lockdown in England. Figures from the Office for National Statistics on Tuesday showed the UK unemployment rate nudged up to 5.1% for the final three months of 2020 from 5.0% in the three months to November, and being 1.3 percentage points higher than a year ago. This rise was in line with market expectations, as cited by FXStreet. The ONS noted that the claimant count - the number of people claiming unemployment benefits - decreased slightly in January, down 0.8% on the month before to 2.6 million. Still, this was double March 2020's level. Also in January, 83,000 more people were in payrolled employment when compared with December - the second consecutive monthly increase - but 726,000 fewer people were in employment when compared with February 2020.
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Airlines and travel firms are experiencing a surge in demand following UK Prime Minister Boris Johnson's road map for how coronavirus restrictions will be eased. Johnson said on Monday that a government taskforce will produce a report by April 12 recommending how international trips can resume for people in England. Foreign holidays could be permitted from May 17. In the hours after the announcement, easyJet said bookings by UK customers for the summer season were more than four times higher compared with the same period during the previous week. The Luton-based firm's holiday division saw an even larger rise, with demand up seven-fold. The most popular destinations for this summer are beach resorts including Malaga, Alicante and Palma in Spain, Faro in Portugal and the Greek island of Crete. August is the most booked month, followed by July and September.
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Johnson said spring and summer in England will usher in changes to make lives "incomparably better" as he set out a plan to fully ease the lockdown by June 21. The prime minister defended his "cautious but also irreversible" approach to relaxing restrictions with a four-step plan on Monday, arguing he will not be "buccaneering" with people's lives. But despite billing his plans as a "one-way road to freedom", he admitted he cannot guarantee that the vaccination programme will prevent restrictions from ever returning. His tentative schedule for easing restrictions will be followed on Tuesday afternoon by First Minister Nicola Sturgeon detailing her own plan for easing Scotland's lockdown. Johnson said he accepted that scientific modelling suggested that lifting measures will increase Covid-19 cases and ultimately deaths, but said restrictions cannot continue indefinitely.
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BROKER RATING CHANGES
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JPMORGAN INITIATES SMURFIT KAPPA WITH 'OVERWEIGHT' - TARGET 4,147 PENCE
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DEUTSCHE BANK RAISES FUTURE PLC PRICE TARGET TO 2,190 (2,066) PENCE - 'BUY'
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BERENBERG RAISES FUTURE PLC PRICE TARGET TO 2,600 (2,280) PENCE - 'BUY'
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JEFFERIES RAISES DRAPER ESPRIT PRICE TARGET TO 967 (683) PENCE - 'BUY'
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COMPANIES - FTSE 100
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HSBC Holdings reported a sharp drop in profit in 2020, as the lender saw its global operations struggle to keep up with its Asian business but has offered some "cautious optimism" going forward. For 2020, the China-focused lender saw its pretax profit drop to USD8.78 billion from USD13.35 billion in 2019. The 34% fall was blamed on higher expected credit losses and other credit impairment charges and lower revenue. "The shutdown of much of the global economy in the first half of the year caused a large rise in expected credit losses, and cuts in central bank interest rates reduced revenue in rate-sensitive business lines," the lender explained. Despite the sharp drop, HSBC's pretax profit came in ahead of market consensus, which forecast the figure at USD8.33 billion. The bank upped its expected credit losses to USD8.82 billion in 2020 from USD2.76 billion in 2019. Allowance for ECL on loans and advances to customers rose to USD14.5 billion at the end of 2020, up from USD8.7 billion at the end of 2019. HSBC's reported revenue fell 10% year on year to USD50.43 billion from USD56.10 billion. Looking ahead, HSBC said it recognises a number of "fundamental changes", including the prospect of prolonged low interest rates, the significant increase in digital engagement from customers and the enhanced focus on the environment. As a result, the lender said it has "aligned its strategy accordingly".
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InterContinental Hotels Group posted a swing to loss for 2020, a year in which the hospitality industry was hammered by coronavirus restrictions across the globe. Total revenue for 2020 slumped 48% to USD2.39 billion from USD4.63 billion, with the company swinging to a pretax loss of USD280 million from a USD542 profit in 2019. RevPAR - revenue per available room, a key metric in the hotels industry - fell 53%, though IHG noted the variation by region reflected local market Covid-19 restrictions and recovery pace. Greater China's recovery was most advanced, with fourth quarter RevPAR down 18%, while the Americas was down 50% and Europe, the Middle East & Africa down 71%. "The shape of recovery remains varied globally, but we've continued to outperform the industry in key markets thanks to the strength of our teams, business model and segments in which we compete. This includes our industry-leading position in upper midscale, where demand remains stronger," said Chief Executive Keith Barr. IHG proposed no final dividend for 2020 and did not pay out anything at the interim stage, though the FTSE 100 constituent said it will consider future dividends once visibility over the pace and scale of market recovery has improved. In 2019, IHG paid out 39.9 cents per share.
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COMPANIES - MAIN MARKET AND AIM
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Auction Technology Group priced its initial public offering at 600 pence per share, giving the company a GBP600 million market capitalisation. The IPO raised GBP272.7 million from 41.2 million new shares and 4.2 million existing shares, equating to 45.5% of the total on admission. ATG started conditional dealings on the London Main Market on Tuesday with unconditional dealings set for Friday. The company expects to be eligible for inclusion in FTSE indices. Auction Technology has operated since 1971, starting with the publication of Antiques Trade Gazette. It now operates an auction platform for curated online auctions in three industry verticals: industrial & commercial equipment, art & antiques, and consumer surplus & retail returns.
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Tuesday's Shareholder Meetings
Image Scan Holdings PLC - AGM
Petrel Resources PLC - EGM re replacing Crest with Euroclear Bank
Arkle Resources PLC - EGM re replacing Crest with Euroclear Bank
PRS REIT PLC - GM re change in vestment policy
Ediston Property Investment Co PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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