Carolyn Cohn London
FINANCIAL services company Old Mutual is to focus this year on getting value from its existing businesses after reporting a 16 percent rise in 2014 operating profit that sent its shares to a record high.
The Anglo-South African group, which has a majority stake in Nedbank, went on a hiring spree last year, but is in no rush to do more.
In Britain, it bought UK financial adviser Intrinsic and money manager Quilter Cheviot, enabling it to target wealthy clients ahead of the UK pension reforms that will take effect from April.
Nedbank also took up a 20 percent stake in African bank Ecobank, while Old Mutual announced plans to buy a majority stake in Kenyan insurance firm UAP Holdings.
Chief executive Julian Roberts said the focus this year was on the group’s existing businesses.
Old Mutual also sold European businesses last year and brought its US fund management arm OM Asset Management to market, though it still owns the majority of it.
“The outcome is the development of another asset gatherer/manager, with a significant distribution arm and platform in the UK,” Eamonn Flanagan at Shore Capital said.
Old Mutual’s shares, which have outperformed broader European insurance stocks this year, rose 1.3 percent to a record high of £2.26 (R40.62) on Friday. Roberts said growth would probably come from Britain, which accounted for 20 percent of its performance.
Old Mutual has only spent part of a R5 billion investment programme for expansion in sub-Saharan Africa. Its Kenyan purchase follows similar purchases in Ghana and Nigeria.
In India, Roberts said the firm was waiting for “absolute clarity” on rule changes before looking to raise its stake in its joint insurance venture there with partner Kotak Mahindra.
Adjusted operating pre-tax profit for 2014 rose 16 percent to £1.6 billion (R28.75bn) on a constant currency basis. Old
Mutual said it would pay a final dividend of 6.25 pence per share, with a total dividend of 8.7p, in line with forecasts.
On the JSE, shares rose 2.42 percent to close at R40.56 on Friday. – Reuters