Taking it on the chin

01 June 2005 Angelo Coppola

The international operations of the risk services business at Alexander Forbes was one of the main reasons for a poor performance, in terms of headline earnings per share, although the company says that it is ready to move forward.

The executives say that the restructuring has been completed and the once-off costs appear in the current numbers, and they are well-positioned for growth.

The results weren’t helped by softening insurance rates, and the exchange rate, although the African operations seem to be on track.

Group Finance DirectorMike Ilsley says that operationally the business is doing well. The exchange rate has had an impact on the numbers, in the region of 3%, while the international contribution still accounts for 50% of the business, althoughthis changes to 30% in terms of operating profits.

There is a 1% operating profit, which turns into anegative percentage, at 14%, due to legacy issues, such as retrenchment costs, rental costs and other costs of the UK risk services business they were involved in.

Headline earning before tax drops to 2%, while the net profit for the year is static at R438m, while headline earnings’ drops 1%. Headline EPS drops 16%.

The African footprint has been expanded, including a new initiative in Nigeria. “We are following our clients,” said London-based Rael Gordon, with EOS partnering in the process.

Internationally Investment Solutions grew their assets under management to R87.7bn, while it has repaid R1.5bn of debt, via equity released to Ventfin, who become major shareholders as a result.

On the Africa financial services business, Gordon says there were good revenue gains, across all the areas they are involved in.

On the IT front there are pilot projects to bring UK processing to South Africa underway and according to Gordon these projects are progressing well.

Quick Polls


The second draft amendments to Regulation 28 will allow retirement funds to allocate up to 45% of their assets to SA infrastructure, with a further 10% for rest of Africa; but the equity & offshore caps remain unchanged. What are your thoughts on the proposal?


Infrastructure? You mean cash returns with higher risk!?!
Infrastructure cap is way too high
Offshore limit still needs to be raised
Who cares… Reg 28 does not apply to discretionary savings
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