Johannesburg - Financial services group Old Mutual said the year ahead would be characterised by hard work required to get the businesses ready for separation in the next year.
Chief executive Bruce Hemphill said the company had made good strides to manage the process since the announcement was made in 2015.
Hemphill said Old Mutual had sold down part of its stake in OM Asset Management to 51percent, cut its debt by £385million (R6.1billion) to lower annual finance costs by £21m in that year, reduced headcount at its head office and made significant strides in preparing the businesses for independence.
“We are confident that the managed separation will unlock and deliver long-term shareholder value,” Hemphill said while delivering the company’s results for the year to end-December.
The company also unveiled former finance minister Trevor Manuel as the new chairman of Old Mutual Emerging Markets (Omem).
It said Manuel would oversee the establishment of the appropriate board and governance structures for an independently-listed Omem and in line with the King IV Report on Corporate Governance which will come into effect on April 1.
Manuel is no stranger at Old Mutual. He has been a non-executive director in the group since January 2016.
Rahima Cassim, fund manager at Ashburton Investments, said: “Any person who brings experience and strategic insight to a company is positive. One of his first initiatives as chairman will probably be the appointment of a seasoned chief executive who can deliver on the operational targets of the stand-alone South African entity when it lists.”
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The group reported a 1percent rise in pre-tax adjusted operating profit of £1.67 billion, broadly flat year-on-year in constant and reported currency.
Ravi Tanna, an analyst at Goldman Sachs International, said the results showed good progress on the management of the separation. “Operating profit of £1.67 million was 3 percent ahead of company-compiled consensus expectations of £1.61 million,” he said.
Nedbank grew its profit contribution 6 percent to £799 million, contributing 44 percent of the group’s £1.67 billion operating profit. Omem increased its contribution nearly 1 percent to £619 million, accounting for 34 percent of the total.
UK division Old Mutual Wealth suffered a 15 percent decline in operating profit to £260 million, contributing 14 percent of the total, while Institutional Asset Management followed suit with 5 percent.
Richard Hasson, fund manager at Electus Fund Managers, said results were generally ahead of market expectations at both the earnings and dividend lines, with only the value of new business disappointing.
Old Mutual shares rose 0.47 percent to close at R36.86 on the JSE.