Resolution Slumps 6% After Capital-Return U-Turn
LONDON -- Resolution (ISE: RSL.L) slumped 14 pence, or 6%, to 214 pence this morning after announcing the cancelation of a 250 million-pound capital return. The payout, equivalent to 18 pence per share, had been originally scheduled for the first half of 2012.
The FTSE 100 life assurer said the decision was based on the estimated capital position of the group at the end of June and followed "careful consideration" of the expected future capital requirements of its Friends Life subsidiary against "a backdrop of heightened investment, economic and regulatory uncertainty."
Mike Biggs, Resolution's chairman, said: "I understand that shareholders will be very disappointed." He also mentioned Friends Life had an Insurance Groups Capital Adequacy surplus of 1.9 billion pounds and the wider group's dividend policy remained unchanged.
Assuming Resolution can maintain its current 19.9-pence-per-share ordinary dividend, the 214 pence shares would yield more than 9%.
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The article Resolution Slumps 6% After Capital-Return U-Turn originally appeared on Fool.com.Maynard does not own any share mentioned in this article. The Motley Fool has adisclosure policy.
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