Old Mutual's (OML) half-year adjusted operating profit jumped 14 per cent year on year to £801m - helped by a robust emerging markets performance and better investment conditions, amid more buoyant equity markets.
Despite a slower South African economy, Old Mutual’s emerging markets business increased adjusted operating profit by 13 per cent to £290m. Emerging market life sales (on an annual premium equivalent basis) soared 29 per cent, too, and the unit also benefited from acquisitions - including Oceanic Life in Nigeria, Provident Life Assurance in Ghana and AIVA in Latin America.
South Africa-focused lender Nedbank also performed strongly. Its half-year operating profit rose 8 per cent to £387m and the bank’s Basel-III-based tier one capital ratio reached a robust 11.8 per cent. But loan impairment charges did rise 23 per cent to R3.3bn (£219m).
Meanwhile, group funds under management rose 9 per cent in the half to £289.3bn, supported by net fund inflows of £9.1bn. That helped operating profits at both Old Mutual Wealth and the US asset management arm to grow - by 14 per cent to £108m, and by 10 per cent to £54m, respectively. Although higher claims at the insurance unit did mean a lossmaking combined ratio (of claims to premiums) of 102.7 per cent.
Prior to these figures, Charles Stanley was expecting full-year pre-tax profit of £1.63bn, giving EPS of 19.7p (from £1.61bn and 17.5p in 2012).
OLD MUTUAL (OML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 202.7p | MARKET VALUE: | £9.9bn | |
| TOUCH: | 202.6-202.8p | 12-MONTH HIGH/LOW: | 224p | LOW: 164p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 158p* | EMBEDDED VALUE: | 210p | |
| Half-year to 30 Jun | Gross life premiums (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 1.78 | 728 | 6.70 | 1.75 |
| 2013 | 2.00 | 805 | 9.10 | 2.10 |
| % change | +12 | +11 | +36 | +20 |
Ex-div: 25 Sep Payment: 31 Oct *Includes intangible assets of £3.1bn, or 62p a share | ||||
