Old Mutual on Monday (11 March) announced its first full year financial results, following its primary listing on the Johannesburg Stock Exchange (JSE) in June 2018.
The group’s headline earnings for the 12 months ending 31 December 2018 are up 8% to R14 241 million from R13 144 million in the prior year.
Adjusted earnings declined to R11.51 billion compared with R12.95 billion a year earlier.
However, headline earnings per share (HEPS) declined 239.1 cents, compared with 271.1 cents a year earlier, when adjusted to account for a break-up from Nedbank.
Results from operations (RFO) amounted to R9.963 billion, from R10.367 billion in 2017.
“Persistently high unemployment rates, a value added tax-rate increase and fuel hikes contributed to lower real disposable incomes for our retail customers in South Africa,” it said.
“This adversely affected our customer acquisition and persistency, especially in the middle-income market.”
Old Mutual’s CEO, Peter Moyo said that the group delivered well on its medium- term targets and commitments made to investors.
“We delivered Return on Net Asset Value of 18.6% which exceeds our Cost of Equity+4% target, which sat at 17.4% for 2018. We continue to be a highly cash generative business with R6.6 billion of free cash generated in 2018 which has more than covered our dividends to our shareholders.
“Our group capital position remains robust with a solvency ratio of 170%, near the upper end of our target range. Sadly, we did not meet our Results from Operations (RFO) growth target of GDP+2%. However, we are still confident that we will meet all our targets in the medium term, noting that the RFO target will be difficult given the negative growth in 2018,” said Moyo.
The group also announced a final dividend of 72 cents per share, bringing its total ordinary dividend per share to 117 cents a share, in line with its dividend policy.
Old Mutual also announced its intention to conduct a share buy-back programme of approximately R2 billion in 2019.
“We have managed our capital well and continue to be responsible to our shareholders in the way we deploy capital,” said Moyo.
“I am pleased with the progress we have made against our eight Battlegrounds. We delivered particularly good sales and Net Client Cash Flows (NCCF) in a tough economic and competitive environment. We have also improved our customer experience through digital enhancements and the delivery of key phases of our IT refresh journey.”
“Whilst we continue to see economic headwinds in the near term, our group is resilient, well capitalised and managing its costs tightly,” he said.