Alexander Forbes begins a five-year journey
- continued Darfoor referred extensively in the presentation to the "size of the prize". It may sound like a game-show cliché but it refers to the possibility of stripping riches out of the balance sheet. He says there is capital to unlock and the gearing level is too conservative at 11%.
Since relisting in 2014, it has generated R4bn in cash and paid out R2bn in dividends. This past year it paid out R829m in dividends and spent R276m on share buybacks.
In a traffic-light assessment of the results, Darfoor gives the group just one red light, for return on equity of 9.8% (the target is at least 12%). There are two green lights: one for containing core cost growth to 3% and another for the generous dividend cover of 1.2 times.
But he says there is a lot more work to do, on operating income and profit growth of just 5% and a cost-to-income ratio still steep at 70.9%.
Forbes continues to mint cash but high growth remains elusive.