Old Mutual (OML) is emerging from a root and branch restructuring that began in 2010 and the new model is already beginning to deliver results. Along the way, the life assurer and wealth management group sold its Nordic operations for £2.1bn, as well as its US life business for $350m (£232m), to leave a more streamlined and de-risked operation. Finances have improved, too, with £2.25bn of free cash generated in the last three years - helping to reduce gearing from 2009's 20.1 per cent to 8.5 per cent.
Adjusted operating pre-tax profit rose 18 per cent to £1.61bn on an IFRS basis and, after adjusting the previous year's figures for disposals, net client cash flow rose from £0.9bn to £6.1bn. Moreover, a positive non-banking investment return of £9.52bn helped to lift funds under management by 3 per cent to £262.2bn - although comparatives were clouded by disposals during 2012 and 2011.
Fee income grew 2 per cent to £2.09bn, driven by increased funds under management in the emerging markets and Old Mutual wealth operations, while the South African Nedbank business benefited from its broad exposure to a fast-growing South African middle-class - lifting net interest income by 14 per cent to £1.15bn. Non-interest income, which includes trading income and transaction fees, rose by a similar amount to £1.3bn.
Bernstein Research expects 2013 adjusted EPS of 20.54p (from 17.5p in 2012).
| OLD MUTUAL (OML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 206p | MARKET VALUE: | £10.1bn | |
| TOUCH: | 206-207p | 12-MONTH HIGH: | 206p | LOW: 137p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 160p* | EMBEDDED VALUE: | 188p | |
| Year to 31 Dec | Gross premiums (£bn) | Pre-tax profit (£bn) | Earnings per share (p)† | Dividend per share (p)† |
|---|---|---|---|---|
| 2008 | 5.16 | 0.60 | 8.64 | 2.46 |
| 2009 | 3.02 | 0.35 | -6.32 | 1.51 |
| 2010 | 3.46 | 1.10 | 8.54 | 4.02 |
| 2011 | 3.58 | 0.99 | 8.94 | 5.02** |
| 2012 | 3.73 | 1.40 | 12.6 | 7.00 |
| % change | +4 | +40 | +41 | +39 |
Ex-div: 24 Apr Payment: 31 May *Includes intangible assets of £3.06bn, or 62p a share **Excludes special dividend of 18p †Adjusted to reflect 2012's seven-for-eight share consolidation | ||||
