Friends said the consolidation of its overseas businesses and a new UK distribution deal helped it buck the sector trend for flat or falling sales.

New business sales rose to �429.2m ($778m) from �377m the previous year - in line with expectations.

Chief executive Keith Satchell said the company was confident of expanding its UK market share in 2004.

Overall life and pensions sales in the fourth quarter inched up to �116.7m, from �114m in the previous three months, the company said.

Meanwhile, sales of group pensions - a niche market for Friends - rose nearly 12% over the year to �176m.