Old Mutual final dividend underscores 2023 earnings
JOHANNESBURG – Old Mutual’s share price jumped yesterday morning after the group declared a final dividend on the back of strong 2023 financial results that saw most of its underlying business units deliver a rise in earnings.
Nevertheless, Old Mutual Insure underperformed during the financial year due to adverse weather events in Gauteng and the Western Cape, while the group’s investment unit also saw profit slip on the back of financial market vagaries.
The group’s share was up 4.6 per cent at R11.93 per share in early morning trade after it announced a final dividend of 49 cents a share for the year to end-December.
Distribution
This, along with its 32 cents a share interim dividend, took its total shareholder distribution for 2023 to 81 cents a share. After tax profit attributable to shareholders rose 35 per cent to R7.07 billion for the year to end-December while headline earnings were up 35 per cent at R7.38 billion.
“We’re delighted – it’s a really robust operational and financial performance,” Old Mutual CEO Iain Williamson told News24. “We see the topline growth that we’ve achieved, with margin expansion, as a critical proof point that the strategic choices we’ve made are right. The strategy is really built around building out our integrated financial services capability and utilising our competitive strength in distribution and digital engagement to drive that.”
The Cape Town-headquartered insurance and investment group’s 2023 results were characterised by a strong performance by most of its business segments, though its insurance and investment units underperformed. Williamson said the group demonstrated a strong ability to generate new sales in a tough environment, with the value of new business rising 37 per cent in the year alongside a corresponding increase of 10 basis points in the value of new business margin.
Jump
The group’s strategically important Mass and Foundation Cluster delivered a 183 per cent jump in profits to R1.39 billion, largely driven by the underwritten life sales available through Old Mutual Protect, which serve SA’s entry-level market. Personal Finance and Wealth Management lifted profit by over 19 per cent to R2.69 billion while Old Mutual Corporate increased profit by 49 per cent to R1.22 billion.