Old Mutual reports solid growth in challenging market
By Josh White
Date: Wednesday 27 Mar 2024
(Sharecast News) - Old Mutual reported notable growth in its results for 2023 on Wednesday, including a 14% increase in results from operations, reaching ZAR 8.34bn (£349.18m), and a 21% rise in adjusted headline earnings to ZAR 5.86bn.
The South African investment, savings, insurance and banking group said its headline earnings saw a 26% increase to ZAR 7.38bn, with IFRS profit after tax attributable to equity holders jumping 35% to ZAR 7.07bn.
Its return on net asset value improved by 170 basis points to 11.1%, reflecting robust growth and efficient capital management.
Excluding new growth initiatives, that return further increased to 12.1%.
Despite a decrease in discretionary capital and a slight dip in dividend cover, Old Mutual declared a final dividend of 49 cents per share, leading to a total annual dividend of 81 cents per share, making for a 7% increase from the prior year.
Old Mutual said its strategic efforts were focused on increasing market share through significant sales growth and innovative financial solutions.
The company recorded a 17% increase in life segment sales and a 37% increase in the value of new business, underpinned by its customer-centric approach and digital engagement capabilities.
Operating in a challenging global economic environment, Old Mutual said it was navigating interest rate hikes and inflation pressures.
The South African economy's growth slowed to 0.6%, but the board said Old Mutual's strategic initiatives, particularly in partnership with Two Mountains Group and its upcoming bank launch, positioned it well for future growth.
It said it remained committed to operational excellence and strategic growth, aiming to enhance shareholder returns and strengthen its market presence.
With a strong solvency ratio and ongoing investments in digital transformation, Old Mutual said it was poised for sustained success in the evolving financial landscape.
"We will continue to deliver on strategic initiatives to achieve our victory condition of becoming our customers' first choice to sustain, grow and protect their prosperity," said chief executive officer Ian Williamson.
"Our integrated financial services business of the future, which has our customers' financial wellness at its core, and the planned launch of our bank are important building blocks to get even closer to our customers and be part of their everyday lives."
Williamson also noted that in January, the company announced the sale of its full stake in UAP Insurance Tanzania, its short term insurance business, to a group of current minority shareholders, pending regulatory approval.
"This decision follows a strategic review that identified challenges in achieving the desired returns on capital for the Tanzanian business.
"We remain committed to East Africa and will continue to strengthen our investment in corporate and retail propositions to position the business as a leading integrated financial service provider.
"We will expand our corporate offering, distribution channels, and customer base in East and West Africa."
At 1011 GMT, shares in Old Mutual were up 4.92% in London at 49.05p.
Reporting by Josh White for Sharecast.com.
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