Alexander Forbes trims dividend
Alexander Forbes, whose services range from asset management and health-care insurance, to consulting for multinational corporations, has trimmed its interim dividend by more than a quarter, warning it expects the economic fallout from Covid-19 to keep weighing on its business for at least another year.
The group said it was confident it had the expertise to help clients navigate the pandemic, though a fall-off in retirement contributions put pressure on cash flows in the six months ended September.
Alexander Forbes cut its interim dividend 27.8% to 13c, a R182m payout, with headline earnings per share falling 41% to 14.5c to end-September.
Assets under administration increased 3% year on year to R353m, with the group reporting new business assets of R8.7bn flowing in, which helped offset the effects of client losses.
Overall, the group reported a net cash flow of R200m to end-September, from outflows of R4.4bn previously.
The biggest effect came from general economic pressure, which resulted in a R3bn drop in contributions from active members of retirement funds, mainly from contribution holidays, while retrenchments picked up towards the end of the period.
The Covid-19 pandemic led to significant pressure on clients, Alexander Forbes said, some of whom were hit by temporary salary reductions.
The group said its healthcare client base had been less susceptible to business closures and retrenchments in the period, with membership reducing by 1.5% to 214,143 members from the end of March.
“Despite the tough trading conditions that the business has faced over the past six months, the core business remains stable,” CEO Dawie de Villiers said.
Alexander Forbes proactively responded to clients’ needs particularly during the Covid-19 pandemic by intensifying our engagement and ensuring that we continued to provide outstanding service and solutions, through our advice-led approach,” he said.
“We remain confident in our advice-led strategy and believe that continued delivery against our objectives will reflect positively in the performance of the business over the medium term.”