Old Mutual delivers 8% growth in Headline Earnings – strategy on track

11 March 2019 - Old Mutual Limited (OML) today announced its first full year financial results, following its successful primary listing on the Johannesburg Stock Exchange (JSE) on 26 June 2018.

The Group’s Headline Earnings for the 12 months ending 31 December 2018 are up 8% to R14,241 million from R13,144 million in the prior year.

Old Mutual’s CEO, Peter Moyo stated that the group delivered well on its medium-term targets and commitments made to investors.

“We delivered Return on Net Asset Value of 18.6% which exceeds our Cost of Equity+4% target, which sat at 17.4% for 2018. We continue to be a highly cash generative business with R6.6 billion of free cash generated in 2018 which has more than covered our dividends to our shareholders. Our Group capital position remains robust with a solvency ratio of 170%, near the upper end of our target range. Sadly, we did not meet our Results from Operations (RFO) growth target of GDP+2%. However, we are still confident that we will meet all our targets in the medium term, noting that the RFO target will be difficult given the negative growth in 2018” said Moyo.

The Group also announced a final dividend of 72 cents per share, bringing its total ordinary dividend per share to 117 cents a share, in line with its dividend policy. Old Mutual also announced its intention to conduct a share buy-back programme of approximately R2 billion in 2019. Taking into account the planned share buy-back, the special dividends paid in October 2018 and the Nedbank Unbundling, the total distribution to shareholders since listing will equates to nearly R52 billion.

“We have managed our capital well and continue to be responsible to our shareholders in the way we deploy capital,” explained Moyo.

On being on track with its strategic objectives, Moyo remarked, “I am pleased with the progress we have made against our eight Battlegrounds. We delivered particularly good sales and Net Client Cash Flows (NCCF) in a tough economic and competitive environment. We have also improved our customer experience through digital enhancements and the delivery of key phases of our IT refresh journey.”

“Whilst we continue to see economic headwinds in the near term, our Group is resilient, well capitalised and managing its costs tightly,” concluded Moyo.