Alexander Forbes year-end results
Reporting for the year ended 31 March 2006, Alexander Forbes has delivered revenue growth of 11% with income from operations exceeding R5 billion for the first time.
The trading results of operations totaled a profit of R791 million. This represents a 2% increase, affected by reduced profits reported by the groups International Risk Services business. Core earnings per share increased in line with the trading results, up 3% on the previous year and amounting to 116 cents for the year.
Peter Moyo, who will take up the reins as Group Chief Executive on 1 July commented: Strong operating results, representing an increase of 13%, were achieved across the South African and African businesses. Group Chief Executive, Rael Gordon added The International Financial Services businesses recorded very strong growth with profits up 39% on the previous year
The groups multi-manager investment subsidiary, Investment Solutions, achieved significant growth in profits of 29%. Global assets under management have reached R124 billion representing a 33% increase. Specifically the South African Investment Solutions business benefited from strong equity market growth, as well as net new business inflows totaling R3 billion for the year.
The UK Investment Solutions business has achieved competitive performance, and continues to gain momentum as it approaches GBP 1 billion of assets under management, an increase of 100% on the previous year.
The Africa Risk Services trading result of R187 million was slightly down on the previous year having been impacted by a decrease in operational interest earnings and a reduced contribution from personal lines insurance. Guardrisk and the Afrinet network performed well and the Corporate Broking business secured significant new business gains.
Driven by a strong performance from the Actuarial Consulting business, the Africa Financial Services division increased profits by 12% to R219 million. The Health Care Consultants and Health Management Solutions businesses, HomePlan division and Financial Planning Consultants contributed to this good result.
The International Financial Services division achieved revenue growth of 24% with an exceptional growth in profits up 39% on the previous year. Lane Clark & Peacock, operating in the UK and Swiss markets, secured significant increased business due to ongoing pensions market turmoil and legislative change. The UK Pensions IFA business also recorded double digit revenue and profit growth.
Gordon commented As recently reported, Alexander Forbes is considering the possibility of involving a new private investor alongside the Group, as a shareholder in International Risk Services. This will better position the business to capitalize on current opportunities in its market.
Looking ahead, Peter Moyo said: Alexander Forbes has built a solid platform for future growth. The review process we have recently undertaken should give confidence to our clients and staff that they are dealing with an organisation which prides itself on the highest ethical standards.
