The Mercury

Alexander Forbes takes steps to reverse under performanc­e

Emerging markets business in difficulti­es in Nigeria, Uganda and Zambia

- Siseko Njobeni

LISTED financial services group Alexander Forbes said yesterday that it had accelerate­d the turnaround plan for its emerging markets business, with a focus on structural cost and operationa­l efficiency.

The group said while its overall performanc­e in the financial year to March 31 was laudable, its emerging markets business was lacklustre, with difficulti­es in Nigeria, Uganda and Zambia.

It said yesterday that it would take steps to reverse the under-performanc­e. “Management has accelerate­d its turnaround plan for the business with structural cost and operationa­l efficiency initiative­s being implemente­d. The growth of emerging markets remains a key pillar of the group’s ambition to build a pan-African financial services leader,” Alexander Forbes said.

The company currently operates in five countries across sub-Saharan Africa – Namibia, Botswana, Nigeria, Uganda and Zambia. Alexander Forbes has discontinu­ed the Alexander Forbes Kenyan operations.

It said the emerging markets unit recorded modest growth of 4 percent in operating income, with the positive performanc­e from Namibia offset by poor performanc­es in other remaining markets. “The 9 percent improvemen­t in operating income reported in Namibia was largely driven by growth in retirement­s as well as improved performanc­e in the insurance and investment­s businesses,” it said.

The Botswana business, on the other hand, reported a 5 percent decrease in operating income. In the prior year, the government of Botswana’s insources the Public Officers Pension Fund, which constitute­d a large portion of the business’ operating income.

The group declared a final dividend of 24 cents per share, up 4 percent, compared to the same period last year. It said that it had paid a total of R2 billion in dividends since its listing in 2014. Alexander Forbes’ operating income grew 5 percent to R3.6bn.

Headline earnings per share were down 16.8 percent to 44.4c a share. The company attributed the drop in earnings mainly to the disposal of UK-based consulting business Lane Clark & Peacock in December 2016. Alexander Forbes sold its 60 percent interest in Lane Clark & Peacock as part of a broader disposal of noncore assets.

“Despite headwinds from macroecono­mic and political uncertaint­y across our markets, we are starting to deliver better and more consistent results for our customers and investors. That said, we have further to travel than the distance we have come… and we recognise that the fix-it phase of our journey is certainly not complete by any means and we believe this will take broadly another two years,” said Darfoor.

Alexander Forbes fell 5.76 percent on the JSE yesterday to close at R5.73.

 ??  ?? Alexander Forbes’ head office in Sandton. The financial services group plans to focus on structural costs and operationa­l efficiency in its Emerging Markets business. PHOTO: SIMPHIWE MBOKAZI/AFRICAN NEWS AGENCY (ANA)
Alexander Forbes’ head office in Sandton. The financial services group plans to focus on structural costs and operationa­l efficiency in its Emerging Markets business. PHOTO: SIMPHIWE MBOKAZI/AFRICAN NEWS AGENCY (ANA)

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