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Old Mutual half year results

Steve Clayton | 6 August 2015 | A A A
Old Mutual half year results

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Old Mutual Plc ORD 11 3/7P

Sell: 210.95 | Buy: 210.95 | Change 0.05 (0.02%)
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Management at the Anglo-South African financial services firm summarised its financial performance during the half year as "strong." Adjusted operating profit rose by 20% on a constant currency basis to £904 million, with funds under management up by 7% to £335.7 billion versus the full year 2014. Old Mutual in South Africa grew profits by 14%, Nedbank grew its headline earnings by 16%, whilst its Rest of Africa businesses saw profits jump by 31%. For its UK business, Old Mutual Wealth, profits rose by 26%. Management highlighted that "the integration of its Quilter Cheviot acquisition was progressing well." The company is continuing to explore synergies via distribution and asset management. The share price rose by over 2% in early UK stock market trading.

Highlights:
  • Adjusted operating profit of £904 million, up 20% on a constant currency basis, 19% in reported currency terms.
  • Funds under Management at £335.7 billion up 7% in constant currency, 5% in reported currency (vs FY2014).
  • Interim dividend of 2.65p up 8%.

Chief Executive Comment:
"This has been an exceptional six months for Old Mutual. Last year, we reallocated significant capital to buy quality businesses in our core markets. This year is about ensuring that these investments are fully integrated and making the returns we expect. We have an absolute focus on achieving this, while being a responsible business."

Outlook:
Management noted "In our main market of South Africa we expect conditions to remain challenging as power shortages constrain growth and an upward interest rate cycle will increase financial pressure on consumers. However, our businesses in South Africa are in good shape and have been performing well despite the ongoing headwinds as we have focused on our customers through offering a broad and innovative product suite with competitive pricing. In the UK, we are seeing further proof that we have the right business model and believe we will be a net beneficiary from the ongoing reform in the pensions market. We are confident that by remaining focused on meeting our customers' needs and improving the operating efficiencies of the business, we will continue to make good progress."

Read more share research from Hargreaves Lansdown

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information.