Old Mutual (OML) spent the first half of the year trying to ready its two unquoted businesses, Old Mutual Wealth (OWL) and Old Mutual Emerging Markets (OMEM), for independence. At Africa-based OMEM, a new chief executive and chief financial officer were appointed, charged with reviewing the business’s cost base, as well as merging the South African wealth and investment businesses. Meanwhile, £200m in capital was injected into OMW to prepare it for separation; it also gained a CFO.
The listing of Old Mutual Wealth and the new South African holding company – comprising OMEM and a minority stake in Nedbank – is planned shortly after the release of the group’s next full-year results in 2018. The UK wealth business is looking good: it gained net new business of £4.9bn in the period, driven by strong inflows into multi-asset strategies. Overall funds under management were up 10 per cent to £127bn.
Against tough macroeconomic conditions in South Africa, the emerging markets business reported a 1 per cent increase in adjusted operating profit to R6bn (£344m). Lower fee income from affluent retail clients and lower unsecured lending demand meant retail profit declined 7 per cent to R1.77bn. This was partly offset by good underwriting results and close management of expenses. Nedbank managed to reduce loan impairments by more than a quarter, helping drive a 3 per cent improvement in adjusted operating profit to R7.89bn.
Analysts at UBS expect tangible net asset value per share of 171p at the end of December 2017, up from 163p a year earlier.
| OLD MUTUAL (OML) | ||||
| ORD PRICE: | 196.4p | MARKET VALUE: | £9.69bn | |
| TOUCH: | 196.3-196.5p | 12-MONTH HIGH: | 230p | LOW: 182p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 163p* | SOLVENCY II RATIO: | 130% | |
| Half-year to 30 Jun | Gross premiums (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 (restated) | 1.70 | 534 | 4.9 | 2.67 |
| 2017 | 2.19 | 940 | 10.7 | 3.53 |
| % change | +28 | +76 | +118 | +32 |
| Ex-div: | 21 Sep | |||
| Payment: | 31 Oct | |||
| *Includes intangible assets of £2.4bn, or 49p a share | ||||
