Management's decision to split Old Mutual 's (OML) four constituent divisions into independent businesses understandably stole the headlines here. Following a strategic review, the group has concluded that the cost of the current group structure was not justified by the synergies between its businesses. Adverse currency movements and increased financial regulation in Europe and South Africa were also said to have played a part in the decision.
The group increased its adjusted operating profit across all divisions last year. Old Mutual Wealth delivered £307m, an uplift of more than a third, after growing funds strongly. Despite a difficult macroeconomic backdrop, the emerging markets business generated 9 per cent adjusted operating profit growth, in rand terms. Better life underwriting profit and increased ownership of its personal loan business Old Mutual Finance played a part.
South Africa-based Nedbank enjoyed a 4 per cent increase in its net interest income to £23.9bn. However, its net interest margin declined to 3.3 per cent (3.52 per cent in 2014), as consumers dealt with the risk of job losses and increased indebtedness. However, the group's US asset management business suffered $5.1bn (£3.6bn) in net outflows, with sovereign wealth fund withdrawals partly to blame, and a negative investment performance of $3.7bn.
Analysts at Bank of America Merrill Lynch expect adjusted EPS of 17.5p for 2016, down from 19.3p in 2015.
OLD MUTUAL (OML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 186.9p | MARKET VALUE: | £9.21bn | |
| TOUCH: | 186.8-187p | 12-MONTH HIGH: | 241p | LOW: 148p |
| DIVIDEND YIELD: | 4.8% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 136p# | EMBEDDED VALUE: | 179p | |
| Year to 31 Dec | Gross premiums (£bn) | Pre-tax profit (£bn) | Earnings per share (p)* | Dividend per share (p)* |
|---|---|---|---|---|
| 2011 | 3.58 | 1.00 | 8.9 | 5.02** |
| 2012 | 3.73 | 1.40 | 12.6 | 7 |
| 2013 | 3.70 | 1.53 | 14.9 | 8.1 |
| 2014 | 3.21 | 1.36 | 13.5 | 8.7 |
| 2015 | 3.59 | 1.32 | 13.2 | 8.9 |
| % change | +12 | -3 | -2 | +2 |
Ex-div: 31 Mar Payment: 29 Apr *Adjusted for 2012's seven-for-eight share consolidation **Excludes special dividend of 18p #Includes intangible assets of £3.28bn, or 66p a share | ||||
