Standard Life brand sold as new boss makes mark on Scottish finance giant
STANDARD Life Aberdeen is selling the brand with which the group and forerunners have been associated for almost 200 years as the group increases its focus on asset management.
The Edinburgh-based giant has agreed to sell the Standard Life brand to the Phoenix group during this year as part of a complex deal. Phoenix said this will result in Standard Life Aberdeen (SLA) paying it £115 million cash.
Standard Life Aberdeen is working on plans for a new brand which it expects to unveil later this year.
The deal announced yesterday comes three years after Phoenix Group acquired the pensions business, which operates under the Standard Life brand, for £3.2 billion following the merger between the former Standard Life plc and Aberdeen Asset Management.
The group formed through the merger decided to focus on asset management although Standard Life has been associated with pensions since the business was founded in 1825.
The group retained exposure to the pensions business through a stake in Phoenix and held on to the Standard Life brand.
The decision to sell the brand has been announced months after former Citigroup executive Stephen Bird took charge at Standard Life Aberdeen.
Mr Bird said: “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.
He added:” I am excited about the work we are doing on our own brand, which we look forward to sharing later this year”.
Mr Bird said the deal simplified the relationship between Standard Life Aberdeen and Phoenix Group in a way that would allow them to work together constructively as partners for at least the next ten years.
Phoenix has agreed to extend the term of the agreement under which Standard Life Aberdeen manages around £147 billion funds for the business by 2.5 years, to 2031.
Standard Life Aberdeen will retain a 14 per cent stake in Phoenix. It will acquire businesses
THE boss of Springfield Properties has declared the housebuilding sector no longer needs Government support as the Scottish firm reported strong profits and revenue growth in its interim results.
Innes Smith, chief executive of the Elgin-based group, told The Herald that the record profits being made by housebuilders show the industry does not need help at state-level to boost sales. He argues support should be given to sectors which are more in need.
Mr Smith’s comments came as Springfield reported a 42.9 per cent rise in adjusted pre-tax profits to £9 million for the six months ended November 30. Turnover grew by 18.3% to £94.4m as the firm took advantage of “pent-up” demand that built up during the first lockdown. A total of 443 homes were completed, up from 438.
Mr Smith said he does not expect Springfield to be unduly affected by the Help to Buy scheme and Land and Buildings Transaction Tax relief coming to an end in Scotland. Sales through Help to Buy accounted for around five per cent of Springfield’s total.
Mr Smith said: “That is not going to have a significant impact on us. The First Home Fund is in place. Maybe it is time for government assistance, [when] housebuilders are getting record profits and record turnover, to ease up a bit. I am quite confident we can see through this.”
He added: “I think the Government could be helping out other areas just now. There is more needy than us at this point in time.”
Springfield recommenced building operations in June following a threemonth hiatus, and activity has been uninterrupted since.
The firm made around 60 people redundant in the wake of the pandemic taking hold, which represented around 10% of its workforce. That came as it consolidated two offices into one, albeit the remaining office continues to be closed. However, Mr Smith said Springfield has begun hiring again.
“There are job adverts out there,” he said. “We want to continue our growth. We are looking for opportunities just now because we have a positive feeling about the market.”
Springfield has made two acquisitions since listing on the stock market in 2017, with the purchase of Dawn Homes in 2018, and Walker Homes the following year. Mr Smith said acquisitions continue to form part of its strategy.
“It has been throughout,” he said. “If we see something that is the right price, adds value and is earnings accretive we would absolutely go forward to our investors and say: what do you think of this?”
Springfield has seen the momentum built up in the first half of its financial year continue, noting that industry figures for the last 13 weeks are comparable with the same period the year before.
He said: “When you consider last year didn’t have Covid and they didn’t have three weeks of horrendous snow and they didn’t have the lockdown, to be on a par with that just shows the strength of the market.
“I think it is all down to [the fact] we don’t have enough houses coming on to the market.”
Noting that demand is continuing to outstrip supply, he highlighted the ability of Springfield to help fill the gap. He added: “The houses that Springfield offer are larger than the industry average, and the villages have their own communities and facilities.
“They are proving [to be] very popular in the current environment for sales.”
Springfield announced yesterday that work would begin next month on the construction of 75 family rental homes at Bertha Park on the outskirts of Perth, in partnership with Sigma, the residential development and urban regeneration specialist.
It marks the first project of its kind in Scotland, and Mr Smith is hopeful the private rental sector (PRS) model can be “duplicated” for single family homes elsewhere in the country.
He sees no reason why the success of the PRS model in England cannot be replicated in Scotland.
The new homes will form part of the Bertha Park village development Springfield has been constructing.
The company proposed an interim dividend of 1.3p per share.
Shares closed up 5p, or 3.3%, at 155p.
We are looking for opportunities because we have a positive feeling about the market