Old Mutual delivers ‘sound’ results amid Moyo legal wrangle

Old Mutual Limited on Monday (2 September) published its interim results for the six months ended June 2019, with adjusted headline earnings rising 10% to R5.2 billion.

This, it said, is as a result of higher investment returns in South Africa and good profits contributed by personal finance and the rest of Africa business segments.

Old Mutual interim chief executive Iain Williamson described the results as ‘sound’ in challenging market conditions.

“Our result from operations increased by 2% to R4.5 billion from R4.426 billion in 2018. We delivered a return on net asset value of 16.4%, marginally down from the prior year. Our group capital position remains robust with a solvency ratio of 166%, which remains well within our target range.

“In addition to this, we have made good progress on balance sheet optimisation through debt raising, the completion of a R2.5 billion share buyback programme and further simplification of the Residual plc balance sheet,” said Williamson.

Old Mutual is currently in an ongoing legal battle with former chief executive, Peter Moyo. Late last month, the group said it had sent another notice of termination to Moyo, as it awaits the outcome of the appeals process to a court order that reinstated him as CEO.

The listed financial services group penned an open letter to shareholders, addressing concerns raised by them in respect to Moyo, who was initially suspended by the Old Mutual board on 23 May after it concluded that there had been a material breakdown in trust and confidence.

This followed prior engagements with Moyo over concerns about how a conflict of interest had been managed in relation to his investments in the NMT group of companies.

“Although Mr. Moyo is currently challenging the termination of his employment contract in court proceedings, he is not required to perform any duties during his notice period,” Old Mutual said.

Williamson said that Old Mutual is firmly on track to deliver its cost efficiency target of R1 billion in savings by the end of 2019.

The group announced an interim dividend of 45 cents per share, the same as last year and in line with its dividend policy.

On the group’s delivery against its strategy, Williamson explained: “We are making good progress in the achievement of our eight battlegrounds, and in the improvement of operational efficiency and customer experience through the use of technology.

Key highlights in this regard include:

  • The deployment of 122 Bots to assist with process automation, saving 2.8 million minutes in processing time;
  • The continued roll out of digital tools to enhance customer experience; and
  • The delivery of the pilot of Old Mutual Protect, the Group’s comprehensive risk solution, followed by a measured and controlled rollout in the second half of 2019.

“We remain confident in the group’s ability to build on these results, further strengthening our resolve to deliver exceptional value to both shareholders and customers alike,” Williamson said.

Read: Old Mutual issues new termination notice to Peter Moyo

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Old Mutual delivers ‘sound’ results amid Moyo legal wrangle