Companies / 3 September 2018, 06:30am / Sandile Mchunu
DURBAN - Old Mutual Limited (OML) will return R46.8 billion to its shareholders after the unbundling of Nedbank from Old Mutual.
The unbundling of Nedbank is expected to be completed at the end of the fourth quarter and is part of the managed separation by Old Mutual Plc that was announced in March 2016.
After the unbundling, Old Mutual’s stake in Nedbank will be reduced to 19.9 percent.
Old Mutual Limited chief executive Peter Moyo said on Friday that this was part of a programme to return value to Old Mutual shareholders and demonstrate the company's commitment to managing capital efficiently.
“Taking into account the planned unbundling of Nedbank, the total distribution, including the dividends, of R46.8bn that we will return to our shareholders equals about a third of our current market capitalisation,” Moyo said.
OML and Quilter, two of the four companies that were part of Old Mutual Plc, were successfully listed as separate entities in June.
Moyo added that the group remained on track to complete the final step of managed separation through the distribution of 32 percent of Nedbank to its shareholders.
“For every 100 Old Mutual Limited shares at the point of distribution, shareholders will receive approximately three Nedbank shares.
"After the completion of the Nedbank unbundling we will own 19.9 percent of Nedbank in our shareholder funds. We view this as a long-term investment and this ownership underpins significant commercial benefits we derive from the continuation of this relationship,” Moyo said.
OML released its maiden results on Friday after listing, reporting that top-line growth was strong with excellent net client cash flow (NCCF) of R9.4bn mainly reflecting good flows and significantly improved retention.
The group said funds under management (FUM) of R1.1 trillion grew 2 percent from the end of December 2017, reflecting the impact of the strong NCCF, largely offset by lower asset values.
Results from operations (RFO) of R4.85bn increased by 7 percent and the group said this reflected good operational performance.
Adjusted headline earnings (Ahe) of R5.39bn were up by 1 percent while basic earnings per share (Eps) were up by 48 percent to 229.4c, up from 154.7c compared to last year.
The group declared an interim dividend of 45c a share and a special dividend of 100c a share.
Moyo said the group delivered solid financial results and had made good progress.
“While we continue to see economic headwinds in the near term, our group is resilient and we are on track with our financial targets,” he said. Old Mutual Limited's shares closed 1.8 percent lower at R30.40 on the JSE on Friday.