Just over a week into his new job, Friends Provident chief executive Trevor Matthews has unveiled the scale of the task ahead to build the company's new strategy, with profit down to £13 million for the first half from £111 million this time last year.

But there was no news on the sale of non-core wealth management businesses, as had been hoped.

Friends said it "continued to explore options" for Lombard, which it is trying to sell. A plan to offload a 52% stake in F&C Asset Management was making "satisfactory progress".

The results included a one-off charge of £70 million reserved for annuities in the face of market volatility. Chairman Sir Adrian Montague acknowledged he faced difficult times but said Friends was doing better than many had expected.

He said timely initiatives taken to reduce exposure to financial markets, have enabled the company to weather the subsequent sharp economic downturn more favourably than otherwise would have been the case.

"Our business has no need to raise capital to fund growth, and our revised dividend policy remains sustainable," he said.

Friends said international operations were making very good progress, with 57% growth in new business. In the UK, it expects an excess on capital requirements of £1.0 billion and declared an interim dividend of 1.30p. The shares fell 4.7p to 87p today.