Alexander Forbes' strategic initiatives are showing signs of bearing fruit
JOHANNESBURG – Alexander Forbes on Monday declared an interim gross cash dividend of 18 cents per share for the six months ended in September as the group’s strategic initiatives showed signs of bearing fruit.
The financial services company said headline earnings per share for the total group went up 42 percent to 24.5c, while cash generated from continuing operations remained strong at R489 million.
Chief executive Dawie de Villiers said initiatives by the group last year had pushed the company into profits.
“We continue to work with determination to implement our strategy of simplifying our business, improving our product offering to our clients and ensuring that we deliver the best advice and measurable benefits to them,” De Villiers said. “And it will also reflect favourably in the quality of our earnings and the performance of our business in the longer term.”
Alexander Forbes’ operating income from continuing operations increased 1 percent to R1.5bn.
Profit from continuing operations (before non-trading and capital items) rose 3 percent to R403m, reflecting good expense management.
However, assets under administration and assets under management fell 7 percent to R344bn year-on-year, largely owing to client losses during the second half of the previous financial year.
Alexander Forbes said the disciplined execution of its strategic initiatives together with its new operating model would position it better for the economic period anticipated over the next three to five years.
It said the successful implementation of key enablers over the past six months was already a major step change with an increasingly visible impact on its day-to-day operations.
Alexander Forbes’ strategic initiatives look at simplifying and rationalising its product offering.
Some of the strategic initiatives that are currently on track include providing an integrated service model to clients, leveraging on its expertise in retirements benefits, investments, healthcare and individual financial planning, thereby retaining and stabilising its client base.
Alexander Forbes said its capital light strategy was well under way, with the disposal of the South African short-term insurance business expected to conclude early in 2020.
It said good progress was being made in the roll-out and delivery of default retirement solutions, showing measurable benefit s to clients.
Alexander Forbes shares rose 3.76 percent on the JSE on Monday to close at R5.24.