Cut operating profit forecast by £70m after finding problems in Ireland
RSA’s share price has dropped 17% in the first 15 minutes of trading this morning.
Its share price was 121p when the London stock exchange closed at 4.30pm on Friday. By 8.15 this morning it plummeted to 101p.
RSA cut its operating profit forecast by £70m (about 15%) at 6.30pm on Friday – two hours after the market closed – after it discovered claims and financial issues in its Ireland division during a routine audit.
Its Irish chief executive officer, chief financial officer and claims director have all been suspended pending an investigation.
RSA said the issues were serious but would not have material, long-term impact on the Group. “Our capital position remains robust and we remain committed to our dividend policy which is aligned with market expectations for the full-year final 2013 dividend,” group chief executive Simon Lee said yesterday.
The share price ticked up to 109p by 10.30 this morning, a 9.7% decline on Friday’s closing price.
RSA’s slump was the second-biggest of the FTSE 100, behind BSkyB shares which fell 10.2% after it was defeated in an auction for the broadcast rights of the Champions League by BT.