The weakness of the South African rand once again blunted progress for life assurer Old Mutual (OML). But adjust for that and operating profits were up 16 per cent at £1.6bn.
Much of the year was spent transforming and simplifying the business into three core areas: a broad financial services offering in South Africa, a retail investment business in the UK, and a multi-boutique asset manager in the US. Whether or not as a result of this approach, the results were strong. Nedbank - the group's South African lender - increased profits by 14 per cent despite the weak economic environment, while Old Mutual's other operations in South Africa delivered a 25 per cent increase in profits.
In the UK, the changes ushered in by the Retail Distribution Review have been significant. With major banks pulling back from financial advice, and independent advisers moving from offering whole-of-market to restricted advice, it is becoming more important for investment providers to have their own distribution networks. In response, Old Mutual last July bought a 3,000-strong network of financial advisers, Intrinsic, as well as Quilter Cheviot, a discretionary investment manager.
Prior to these numbers JPMorgan Cazenove was forecasting adjusted EPS for the current year of 20.1p and year-end embedded value of 227p.
| OLD MUTUAL (OML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 225p | MARKET VALUE: | £11.0bn | |
| TOUCH: | 225.2-225.3p | 12-MONTH HIGH: | 226p | LOW: 164p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 151p# | EMBEDDED VALUE: | 222p | |
| Year to 31 Dec | Gross life premiums (£bn) | Pre-tax profit (£bn) | Earnings per share (p)* | Dividend per share (p)* |
|---|---|---|---|---|
| 2010 | 3.46 | 1.10 | 8.5 | 4.02 |
| 2011 | 3.58 | 1.00 | 8.9 | 5.02** |
| 2012 | 3.73 | 1.40 | 12.6 | 7.0 |
| 2013 | 3.70 | 1.53 | 14.9 | 8.1 |
| 2014 | 3.21 | 1.36 | 13.5 | 8.7 |
| % change | -13 | -11 | -9 | +7 |
Ex-div: 23 Apr Payment: 29 May *Adjusted for 2012's seven-for-eight share consolidation **Excludes special dividend of 18p #Includes intangible assets of £2.76bn, or 56p a share | ||||
