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RESULTS: Old Mutual
Johannesburg, March 11 (I-Net Bridge) - International wealth savings group Old Mutual plc (OML) on Thursday reported a decline in adjusted operating earnings per share from 14.9 pence to 12.1 pence for the year ended December.
The adjusted operating profit before tax was sterling 1.170 billion versus stlg 1.136 billion rand.
The group declared a final dividend of 1.5 pence for the 12 months compared to no dividend last year.
Julian Roberts, Group Chief Executive, commented: “Our operating results for 2009 are ahead of the previous year despite the highly volatile markets over the period. We benefited from improved market conditions in the second half, which resulted in greater demand for equity-based products from our clients, but the improvement also reflects our aggressive expense management as part of our drive to improve business performance. In the fourth quarter we saw especially good sales growth, with the strongest LTS quarterly sales performance for two years.
“During 2009 our priority was to stabilise the business by addressing the issues in US Life and Bermuda and restoring the Group’s capital and liquidity positions, while implementing more effective governance and controls. With substantial improvements in place, we started the process of simplifying our portfolio of businesses and improving our operational performance, while further examining the Group to determine its optimal future shape. We are today setting out a clear strategy to build a cohesive long-term savings, protection and investment group by leveraging the strength of our capabilities in South Africa and around the world.
“We will rigorously drive performance improvement across all of our businesses and have introduced challenging three-year cost saving and return on equity targets. We have also identified specific synergy opportunities from our businesses working together. We anticipate further rationalisation of our activities and will exit markets where we do not have scale or our operations are not capable of achieving a return on equity of 15% over the next three years. We are exploring the disposal of US Life and anticipate a partial IPO of US Asset Management. However, we will only execute transactions when markets allow us to maximise value for shareholders.
“We are determined that over the medium to long-term these measured and fully-funded actions will provide considerable value for shareholders.
Together with further growth in assets under management as market conditions continue to improve, these actions are expected to have a significantly positive impact on underlying operating profitability and return on equity.
Accordingly, the Board has every confidence in the Group’s prospects, as reflected by the resumption of a dividend.”
The group reported an adjusted MCEV per share of 171p versus 117.6p in 2008, and an IFRS book value per share of 147p versus 134p previously.
Funds under management increased from stlg 265 billion to stlg 285 billion.
The group also reported a positive second half sales momentum with fourth quarter life APE sales up 29%, the strongest quarter for the long-term savings (LTS) business for at least 2 years.
“One of the strategic priorities announced in March last year was to strengthen and maintain our capital and liquidity position. I am pleased to report that we now have good balance sheet stability, as demonstrated by a doubling of our FGD surplus to stlg 1.5 billion as at 31 December 2009, from stlg 0.7 billion at the end of 2008, and total liquidity of stlg 1.2 billion. With the Group now in good financial health, we are able to turn our attention to the future,” Roberts said.
The group also reported a resilient performance in tough market conditions and improved capital strength at its banking susbsidiary Nedbank.
Among other highlights for the year, US Asset Management funds under management at 31 December 2009 were up 9% to US$261 billion.
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