File Image: IOL
File Image: IOL

Alex Forbes share bonus boost

By Sandile Mchunu Time of article published Jun 9, 2020

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DURBAN - Alexander Forbes’s share price leapt by more than 6 percent on the JSE yesterday after the financial services group declared a special dividend of 50 cents a share for the year to end March.

However, the group said the special dividend was subject to approval by the financial surveillance department of the South African Reserve Bank.

The group’s share price increased to R4.30 after the announcement, but later in the day the share price closed at R4.20.

Alexander Forbes was cash-flunk after selling its short-term insurance business to Momentum Metropolitan Holdings last year and gained a profit of R861 million on the disposal.

The group also debunked the recent trend among the listed companies of holding a dividend payment as a result of the Covid-19 outbreak.

In addition to the special dividend, the group also declared a final dividend of 12c, resulting in a total dividend of 30c during the year. During the year, Alexander Forbes also completed exiting its non-core businesses and adopted a simplified business structure.

Chief executive Dawie de Villiers said the decision to de-risk their business model, simplify their structure and adopt an advice-led, client-centric strategy was gaining traction.

“Our focus on our core offering will further enhance shareholder value, while combining our market-leading integrated consulting framework with a capital-light strategy has allowed us to reshape a new Alexander Forbes,” De Villiers said. In the results, Alexander Forbes reported a 1percent increase in operating income from continuing operations to R3.15billion, while profit from continuing operations, before non-trading and capital items, was flat at R757m, due to a muted growth in operating income.

Alexander Forbes also wrote off R1.15bn in goodwill and a further R47m in related intangible assets, included as non-trading and capital items, that reflect the uncertainty of projected income arising from the Covid-19 pandemic. Its headline earnings per share declined by 20percent to 35.4c, and cash generated from continuing operations was R936m.

Alexander Forbes also offers integrated retirement, investment, life and insurance solutions to its clients.

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