Alexan­der Forbes in Zim

Ac­qui­si­tion of AAC is in line with its growth strat­egy

The Star Early Edition - - COMPANIES - Sandile Mchunu

LEAD­ING Pan-African fi­nan­cial ser­vices group Alexan­der Forbes is look­ing at di­ver­si­fy­ing its port­fo­lio to cre­ate more value for its share­hold­ers. In line with this fo­cus yes­ter­day it made a strate­gic ac­qui­si­tion of African Ac­tu­ar­ial Consultants (AAC) in Zim­babwe for an undis­closed amount.

Pre­vi­ously the group com­pleted two sig­nif­i­cant trans­ac­tions in 2016; firstly it sold its 60 per­cent in­ter­est in the UK-based con­sult­ing busi­ness, Lane Clark & Pea­cock, for R1.3 bil­lion. The sec­ond trans­ac­tion saw African Rain­bow Cap­i­tal ac­quir­ing a 10 per­cent share­hold­ing in Alexan­der Forbes, a wholly-owned sub­sidiary of the group, as a strate­gic em­pow­er­ment part­ner.

The group said to­gether these trans­ac­tions pro­vide cap­i­tal for in­vest­ments and ac­qui­si­tions.

Group chief ex­ec­u­tive An­drew A Dar­foor said AAC gave Alexan­der Forbes a foothold in the Zim­bab­wean mar­ket, which had sig­nif­i­cant up­side growth po­ten­tial.

“Work­ing to­gether with AAC, we have a long-term vi­sion to cre­ate an en­er­getic, in­no­va­tive and highly re­garded pan-African con­sult­ing and ac­tu­ar­ial leader that of­fers endto-end ca­pa­bil­i­ties to fi­nan­cial schemes and their spon­sors both in the pri­vate and pub­lic sec­tor,” said Dar­foor. AAC is one of the largest in­de­pen­dent ac­tu­ar­ial con­sul­tan­cies in Zim­babwe and Alexan­der Forbes said the ac­qui­si­tion is sub­ject to reg­u­la­tory ap­proval.

“The ac­qui­si­tion of AAC is in line with Alexan­der Forbes’ growth strat­egy to ex­pand into se­lected mar­kets in sub-Sa­ha­ran Africa un­der the Emerg­ing Mar­kets Di­vi­sion, which al­ready has mar­ket lead­ing busi­nesses in Botswana, Namibia, Uganda and Nige­ria,” added Dar­foor.

AAC started op­er­at­ing in 1993 and it of­fers end-to-end ac­tu­ar­ial and ad­vi­sory ser­vices to lead­ing in­sur­ers, rein­sur­ers and large pen­sion schemes in Zim­babwe as well as com­pen­sa­tion and med­i­cal schemes.

ACC man­ag­ing di­rec­tor Ti­nashe Mashoko said the com­pany was de­lighted to be­come part of Alexan­der Forbes, whose mar­ket lead­ing po­si­tion would strengthen AAC’s busi­ness and al­low it to grow its client base not only in Zim­babwe but in the re­gion as well.

Alexan­der Forbes has adopted a new strat­egy themed: Am­bi­tion 2022. Through this strat­egy the group is fo­cus­ing on help­ing cus­tomers achieve a life­time of fi­nan­cial well-be­ing and se­cu­rity.

Un­der Am­bi­tion 2022 the group has fo­cused on ac­cel­er­at­ing its strat­egy to be a trusted part­ner for fi­nan­cial so­lu­tions for ev­ery stage, suc­cess­fully shift­ing to­wards op­er­at­ing as a leaner, more fo­cused group.

In the re­sults for the year to end March, Alexan­der Forbes said in­come from con­tin­u­ing op­er­a­tions was marginally up by 1.2 per­cent to R3.44bn, up from R3.3bn re­ported a year ago, while net profit for the year in­creased by 80.1 per­cent to R1.57bn, up from R874 mil­lion.

Head­line earn­ings per share low­ered to 53.4 cents a share, down from 58.1c in 2016.

The group said the op­er­at­ing en­vi­ron­ment re­mained chal­leng­ing for the fi­nan­cial ser­vices sec­tor, with Brexit, the US elec­tion and Pres­i­dent Don­ald Trump’s eco­nomic poli­cies hav­ing a neg­a­tive im­pact on the South African econ­omy.

The group de­clared a fi­nal gross cash div­i­dend of 23c a share from in­come re­serves.

Nol­wan­dle Mthombeni, an in­vest­ment an­a­lyst at Mer­gence In­vest­ment Man­agers, said the big sur­prise on the re­sults were the growth in the core op­er­a­tions as well as the spe­cial div­i­dend.

“When man­age­ment gave guid­ance on lower head­line earn­ings than the mar­ket ex­pected there were some con­cerns around per­for­mance of the un­der­ly­ing op­er­a­tions. How­ever, there was be­nign growth across the main seg­ments so that was re­ceived pos­i­tively.”

Alexan­der Forbes Group shares gained 3.08per­cent on the JSE yes­ter­day to close at R6.70.

The group is fo­cus­ing on help­ing cus­tomers achieve a life­time of fi­nan­cial well-be­ing and se­cu­rity.


Alexan­der Forbes yes­ter­day an­nounced that it had ac­quired AAC in Zim­babwe for an undis­closed amount.

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