SUNCORP PROFIT SKYROCKETS

SUNCORP (ASX:SUN) has boosted its full year profit to $730 million, with investors to share in the rewards with enhanced dividends.

The finance group posted a net profit of $491 million in the previous corresponding period, attributing the growth to strong natural hazard and investment markets.

The board has declared a special dividend of 30 cents per share, in addition to the final dividend of 40 cents.

Chairman Dr Ziggy Switkowski (pictured) says the group’s strong capital position and positive outlook validated the extra payment.

“The improved dividends reflect the group’s de-risking strategy over the past four years,” Switkowski says.

“After paying these dividends, the group will still hold more than $831 million of additional capital above the company’s conservative operating targets.”

Switkowski says Suncorp will continue to focus on its balance sheet strength with numerous initiatives, such as increased life insurance arrangements.

SUN’s general insurance profit was $1010 million, backed by premium growth, favourable market conditions and expense management.

The banking division reported a profit of $228 million as it consolidated operations, while profit for life insurance was $92 million.

Chief executive Patrick Snowball says the group’s strategic focus on simplifying operations is reflected in the results.

“We’ve achieved significant milestones in simplifying our business and delivering ongoing cost savings,” Snowball says.

“We’ve made appropriate investments in technology, data and business intelligence and we’ve taken the necessary measures to account for fundamental changes in the life insurance industry.

“The benefits of the ‘One Company, Many Brands’ business model continue to emerge as we transform the business while maintaining a flat cost base, improved margins and profitable growth.”

The company aims to achieve between four and six per cent growth in FY15 and continue to return surplus capital.

SUN’s total dividends for 2014 total $1.05, representing a yield of 7.4 per cent based on the closing share price of $14.12 on August 12.

The next round of dividends is fully franked and will be paid on October 1.