Alexander Forbes to simplify its structure
ALEXANDER Forbes chief executive Andrew Darfoor said yesterday that the group wanted to simplify its business into three main divisions in order to articulate its business better to its customers.
These divisions are: institutional clients, retail clients and emerging markets. Darfoor said the group’s strategy was to focus on building a globally distinctive pan-African financial service with all three divisions contributing to the group’s stated goals. In addition to this, the group had identified five core pillars.
“Firstly, we want to focus on the customer with a clear brand strategy and customer value proposition. The customer is important in our operations and we want to serve the customer better,” said Darfoor.
The group also wants to put more emphasis on and to grow its retail and emerging market business lines.
“Alexander Forbes is a great brand that hasn’t delivered on its potential yet. We want to build our business in the SADC (Southern African Development Community) region and spread out to north Africa. We believe the group has enough tools and expertise to compete and be successful in those markets,” he said.
Other areas the group was targeting was the modernisation of its host systems, including increasing digital capabilities; executing expense savings programmes and maintaining solid capital position and strong cash generation while returning capital to shareholders.
The group had appointed a chief digitisation officer to boost the digital capabilities of the business. In its interim results the group reported a 4 percent increase in profits to R416 million for the six months to end September.
Darfoor said the company could perform much better than this. “I believe an 8 percent increase in profits is possible and that is what we should be targeting in the future,” said Darfoor.
Darfoor believed the company’s stock price was underperforming in the JSE.
“Our share price should be trading better than the levels it is currently trading,” he said.
In the past 12 months the share price has reached a high of R7.40 a share and a low of R4.61 a share. It is currently trading in the range of R6.90 to R7 a share.
Darfoor believed Alexander Forbes would reach its goals because it had a strong balance sheet with low debt levels.
Alexander Forbes is the leader in South Africa’s umbrella funds market with R66.8 billion in assets under management for the six months to end September, 11 percent up from last year.
The group is busy negotiating the potential disposal of certain non-core operations outside Africa.
Regarding a possible rating downgrades, Darfoor said he would be happy to be associated with the brand that could show resilience in the face of tough economic conditions.