Last year, Old Mutual (OML) made strides towards the "managed separation" of its four underlying businesses: its US asset manager, its UK-centred wealth management business, its emerging markets segment, and South Africa-based Nedbank. The group sold 15m shares in the New York-listed asset manager to the public, reducing its stake in the business to 51 per cent. Old Mutual Wealth's Italian operations were also sold off. These transactions helped reduce company debt by £385m, which should reduce finance costs by £21m in 2017.
Despite tumultuous economic conditions in South Africa, Nedbank grew its operating profits by 6 per cent to £799m, as interest-earning assets increased. Its net interest margin grew 11 basis points to 3.41 per cent, thanks to higher interest rates. Keeping a tight control on costs and improved life and savings product sales also meant the emerging markets business managed to increase its contribution: the focus there will now be on expanding in sub-Saharan Africa.
Capping fees for its Heritage business meant a reduction in adjusted operating profit for the UK wealth management business. However, improved inflows and £13.9bn of investment gains meant funds under management ended the period up almost a fifth at £124bn. The US fund management business also benefited from positive markets during the second half.
Deutsche Bank analysts expect adjusted EPS of 22.4p in 2017, from adjusted post-tax operating profits of £1.1bn (19.4p and £928m in 2016).
OLD MUTUAL (OML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 225.2p | MARKET VALUE: | £11.1bn | |
| TOUCH: | 225.2-225.3p | 12-MONTH HIGH: | 230p | LOW: 164p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 163p* | SOLVENCY II RATIO: | 124% | |
| Year to 31 Dec | Gross premiums (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2015 (restated) | 3.59 | 1.20 | 11.7 | 8.9 |
| 2016 | 3.87 | 1.22 | 10.4 | 6.06 |
| % change | +8 | +1 | -11 | -32 |
Ex-div: 30 Mar Payment: 28 Apr *Includes intangible assets of £2.5bn, or 50p a share | ||||
