Strip out exceptionals, and factor in the long-term investment return, and life assurer Old Mutual grew underlying half-year operating profit by 12 per cent to £791m in the six months to end June. That progress significantly reflects exposure to emerging African markets although, with the shares trading not that far below embedded value, catalysts for further upside are hard to spot.
South African banking unit, Nedbank, was the star performer, posting a 27 percent rise in operating profit to £406m and credit quality continues to improve - the credit loss ratio fell from 1.21 per cent to 1.11 per cent. However, progress was weaker in other areas. For instance, operating profit only edged up to £384m at the long-term saving business. New business sales, on an annual premium equivalent basis, fell 8 per cent although they rose 18 per cent in South Africa. And adjust for the disposal of Dwight and OMCap and funds under management rose 6 per cent to £261bn.
Meanwhile, South African insurance unit, Mutual & Federal, saw profits drop 19 per cent to £43m and the US asset management arm generated a slender 2 per cent profit hike to £42m.
OLD MUTUAL (OML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 168.1p | MARKET VALUE: | £ 8,215m | |
| TOUCH: | 168-168.3p | 12-MONTH HIGH: | 171p | LOW: 98p |
| DIVIDEND YIELD**: | 3.1% | PE RATIO: | 43 | |
| NET ASSET VALUE: | 163p* | EMBEDDED VALUE: | 187.7p | |
| Half-year to 30 Jun | Gross premiums (£bn) | Pretax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.88 | 909 | 11.7 | 1.50 |
| 2012 | 1.77 | 733 | 6.70 | 1.75 |
| % change | -6 | -19 | -43 | +17 |
Ex-div:24 Oct Payment:30 Nov *Includes intangible assets of £3.3bn or 67p a share **Excludes 18p special dividend paid in June 2012 | ||||
