Alexander Forbes declares special dividend
Financial services group Alexander Forbes has opted to distribute about R600m in a special dividend to shareholders, with the group flush with cash after the sale of its short-term insurance business to Momentum Metropolitan Holdings.
The group realised an R861m profit of Alexander Forbes short-term insurance (AFI) to Momentum Metropolitan Holdings, saying on Monday it feels confident it has the resources to withstand the fallout from the Covid-19 pandemic.
The group kept its final dividend for its year to end-March unchanged at 12c, but reported about R1.145bn in write-downs after testing the effects of Covid-19 on the future of its business.
The group declared a special dividend of 50c for its year to end-March, while it had paid a 30c special dividend in the prior comparative period.
Profit from continuing operations, which excludes the effect of sold or disposed-of businesses, was flat at R757m, with the group saying it had focused on expense management, while the operating environment was tough, with SA’s economy in recession in the second half of 2019.
This is putting the financial services industry under pressure, the group said, as it led to rising retrenchments, and weaker savings rate.
The group said this resulted in asset outflows demonstrated by the decline in the preservation rate for savings to 53% from 55% in the prior year, it said. This percentage reflects the value of retirement funds that are transferred to preservation or retirement packages after an employee resigns or retires from a company.