Old Mutual has been busy trying to draw a line under recent losses, and as well as a major restructuring of the US business, the life assurer and banking group has closed its Hong Kong office, pulled out of Portugal, sold its Australian business and withdrawn an offer for Fortis Bank's interest in AATEDA, a Chinese joint venture.
Trading conditions remain extremely tough. New business sales were down overall, mainly as a result of a decline in the single-premium market, which offset higher growth in Nordic sales. One-off charges and adjustments in investment return absorbed £353m, and accounted for much of the fall in pre-tax profits. Profits were also hit by a weak performance in South Africa, where the economy entered a recession. Funds under management there fell by 8 per cent, largely as a result of net client cash outflows, and were exacerbated by a higher number of corporate clients withdrawing pension business.
| OLD MUTUAL (OML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 94p | MARKET VALUE: | £ 4.96bn | |
| TOUCH: | 94-95p | 12-MONTH HIGH: | 107p | LOW: 30p |
| DIVIDEND YIELD: | nil | PE RATIO: | NA | |
| NET ASSET VALUE: | 184p* | EMBEDDED VALUE: | 125p** | |
| Half-year to 30 Jun | Gross premiums (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 2.86 | 853 | 11.2 | 2.45 |
| 2009 | 1.82 | 160 | -1.8 | nil |
| % change | -36 | -81 | - | -100 |
*Includes intangible assets of £5.4bn or 102p a share **Calculated on a market consistent embedded value basis | ||||
