Reuters and Bloomberg
SANLAM is working on acquisitions worth more than R2 billion in the rest of Africa and other emerging markets, its chief executive said yesterday.
These incremental acquisitions, which are in various stages of completion, would be funded from a R3.3 billion war chest set aside for expansion this year, chief executive Johan van Zyl told the Reuters Africa Investment Summit.
“South Africa is fairly mature and very competitive and the real opportunity lies outside of our borders to the north,” Van Zyl said. “Insurance penetration is quite low in Africa and the margins are fairly high because we don’t get the same kind of competition we get in South Africa.”
Sanlam has been bulking up its presence in Africa, where rapid economic growth has increased the number of people with money to spend on insurance to protect their wealth. The company operates in 10 African countries, including oil-rich Ghana and Africa’s biggest-economy Nigeria. Those operations contribute about 11 percent to its annual sales.
Van Zyl, who is due to step down this year after 12 years at the helm, said the company was aiming for closer to 20 percent contribution from those operations over the next five years.
Results
In another development, Sanlam yesterday said 2014 profit rose after new business volumes grew 18 percent, assets under management rose and underwriting activities expanded.
Net income climbed to R8.73 billion from R8.1bn a year earlier, the Cape Town-based company said yesterday.
Earnings per share excluding one-time items were little changed at R4.16, matching the median estimate of eight analysts surveyed.
The dividend rose 13 percent to R2.25 per share.
Sanlam operates in Africa, Europe, the UK, US, India and Malaysia. It has been expanding in African and Asian countries to find new regions that may help boost profit as growth in its home market slows.
Sanlam in October bought a 40 percent stake in Enterprise Insurance Company from Ghana for R237 million.
“We will continue to focus on implementing our strategy… for Sanlam to achieve accelerated growth,” Van Zyl said.
Shares shed 1.65 percent to close at R72.80 yesterday.