Old Mutual declares a special dividend

Insurer Old Mutual said on Friday that it delivered a solid set of overall financial results for the six months ended June 2018, despite tough market conditions.

Results from Operations (RFO) of R4.848 billion increased by 7% over the period reflecting good operational performance.

Adjusted headline earnings (AHE) of R5.393 billion, however, showed a marginal increase of 1% above the prior period.

Adjusted headline earnings per share was 112.3 cents, flat relative to the prior period, Old Mutual said.

Funds under management (FUM) up 2% to R1.097 billion.

Global dynamics, in addition to weak local economic data, negatively affected the South African economic landscape, with GDP contracting by 2.2% in the first quarter.

“Persistently high unemployment rates, a Valued Added Tax (VAT) rate increase, and fuel hikes have contributed to lower real disposable incomes for local consumers. This adversely affected our customer acquisition and persistency, especially in the middle income market,” it said.

“We declared an interim dividend of 45 cents per share and a special dividend of 100 cents per share, resulting in a total of R7.1 billion being paid to our shareholders,” the group said.

On 26 June 2018, Old Mutual Limited listed on the Johannesburg Stock Exchange (JSE), with secondary listings also taking place on the same day in the United Kingdom, Namibia, Malawi and Zimbabwe.

“We remain on track to complete the final step of managed separation through the distribution of 32% of Nedbank to our shareholders. We plan to do this in the fourth quarter of 2018,” it said.

This will mark the completion of a managed separation announced in March 2016.

Chief executive, Peter Moyo, said: ‘With our debut results as Old Mutual Limited, I am pleased to report that we are on track to deliver on the commitments we have made to investors. We delivered solid financial results in a tough environment and have made good progress against most of our 8 battlegrounds driven through deliberate management action.

“There is renewed momentum and excitement in the group following our listing and this is captured in our new vibrant branding launched recently. Whilst we continue to see economic headwinds in the near term, our group is resilient and we are on track with our financial targets.”

Read: Old Mutual returns to South Africa as breakup ends London listing

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Old Mutual declares a special dividend