DURBAN – Rand Merchant Investment Holdings’ (RMI) normalised earnings declined 4 percent in the year to end June to R4.08 billion as its investments in OUTsurance and Discovery took a hit on a spike in short-term insurance claims and spend on new strategic initiatives.
RMI, a strategic active manager of a R52bn financial services portfolio, has interests in listed companies, which include Discovery (25 percent), Momentum Metropolitan (27.3 percent), OUTsurance (89.1 percent) and Hastings (29.9 percent), a disruptive UK short-term digital insurer.
RMI said normalised earnings from OUTsurance, including its shareholding in Hastings, decreased by 13 percent to R2.6bn, mainly due to higher claims and cost ratios across the group, coupled with a lower earnings contribution from its investment in Hastings, while Discovery’s normalised headline earnings decreased by 7 percent to R5bn, as a consequence of a significant planned increased investment in new strategic initiatives and an unexpected spike in large Discovery Life claims in the first half of the year.
However, Momentum Metropolitan managed to offset the disappointing performance by reporting a 53 percent increase in diluted normalised headline earnings to R3.07bn.
The group's headline earnings declined by 7 percent to R3.80bn while headline earnings per share were down by 8 percent to 249 cents a share.