Huntingdon had to go to the US to gain an 11th-hour rescue package from Stephens Group.. CGNU, which recently trumped Prudential to become the UK’s largest insurer, yesterday proved that companies can’t always blame a poor performance completely on volatile markets. CGNU, which recently trumped Prudential to become the UK’s largest insurer, yesterday proved that companies can’t always blame a poor performance completely on volatile markets.
The insurer said it had been hit by a sharp fall in the number of people buying investment products in the first quarter, from that period last year. But it still recorded a 29 per cent rise in UK business, to £326m, on an annual premium-equivalent basis, the standard insurance industry measure of new and continuing business.The healthy results will pressure Prudential, which unveils its new business figures to the market today, to prove that it is still a serious competitor to CGNU. However, the Pru is also expected to show strong growth in the UK, partly because its performance at home was weak last year. CGNU’s shares rose 29p yesterday to 994p, as investors warmed to the performance in such difficult market conditions. It looks like CGNU is beginning to deliver on the promises it when formed in May from the merger of CGU and Norwich Union.

It has positioned itself well in the UK to take advantage of the growth of stakeholder pensions and is beginning to feel the effect of bancassurance joint ventures in other countries like Spain and Italy.The prospects for further growth are also good, as CGNU has signalled that it would enter into more joint ventures in other parts of Europe this year. This will be fuelled by the £1.5bn it will net from the sale of its US general insurance arm. CGNU is forecast to make profits of £18.37m for the year, and the shares trade on a forward price-earnings ratio of 16. They are some way off their 12-month peak of 1,138p in August and look good value.DFS FurnitureYesterday’s half-year results from DFS Furniture, the sofa retailer, looked well upholstered at first glance.

But on closer inspection there were a few worn patches around the edges. Pre-tax profits in the six months to 27 January were up 11 per cent on the previous year to £24.4m, and like-for-like sales were up by an impressive 8.5 per cent But the outlook statement was cautious at best. The trading environment for big-ticket retailers is “less than buoyant”, the company said.Also, underlying sales for the year as a whole will be affected by stronger comparisons and the loss of special promotional activities provided by the extra bank holiday in the millennium year. What all this means in sales terms is that underlying sales in the five weeks to Easter are flat, having been down for the early part of the second half.It was this caution, plus a bit of profit taking, that pushed DFS shares 14p lower at 406p.Going forward, the future of the stock depends as ever on the strength of the housing market and consumer confidence. So far the housing sector looks firm and the economy in relatively good shape. DFS is well managed, has growing market share and lots of scope to expand in the south of England, where its portfolio remains limited.The big unknown is the Primback VAT case, which is set to be ruled upon by the European court next month.