Old Mutual may be occupied with a major restructuring but, despite volatile markets, the life assurer still managed a solid performance last year. While assets under management dipped 5 per cent in 2011 to £267.2bn, pre-tax profit - adjusted for investment variances - rose 14 per cent on an IFRS basis to £1.52bn. Still, after a decent run, the shares - trading close to embedded value - could tread water.
Management has significantly streamlined Old Mutual and, during the year, the Swiss unit was closed to new business, while the Finnish operation was sold. The Nordic business was sold for £2.1bn, too, of which £1bn will be returned to shareholders in June through a special 18p a share dividend. Following this, there will be a seven-for-eight share consolidation. Operationally, fee income rose 5 per cent to £2.08bn, driven mainly by a good performance in wealth management and emerging markets, where funds under management rose 7 per cent. Meanwhile, South African Nedbank pushed net interest income up 19 per cent to £1.12bn, while non-interest revenue rose 11 per cent to £1.27bn. Costs have been cut by £111m, too - boosting the return on equity to 20 per cent.
| OLD MUTUAL (OML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 163p | MARKET VALUE: | £9.1bn | |
| TOUCH: | 162-162p | 12-MONTH HIGH: | 167p | LOW: 97p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 153p* | EMBEDDED VALUE: | 175p** | |
| Year to 31 Dec | Gross premiums (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 5.57 | 1.75 | 19.2 | 6.85 |
| 2008 | 5.16 | 0.60 | 8.60 | 2.45 |
| 2009 | 3.02 | 0.35 | -6.30 | 1.50 |
| 2010 | 3.46 | 1.10 | 8.50 | 4.00 |
| 2011 | 3.58 | 0.99 | 8.90 | 5.00† |
| % change | +3 | -10 | +5 | +25 |
Ex-div: 18 Apr Payment: 7 Jun *Includes intangible assets of £3.4bn, or 60p a share **Calculated on a market consistent embedded value basis †Excludes 18p special dividend | ||||
