Litigation over Moyo does little to dent Old Mutual’s earnings
Financial services group Old Mutual managed to pull through a positive set of results despite the challenging economic environment and the ongoing executive leadership challenges. Joining CNBC Africa for more is interim CEO, Iain Williamson.
Mon, 16 Mar 2020 16:16:30 GMT
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AI Generated Summary
- Adjusted headline earnings per share increased by 7% year on year, while results from operations were down 2% due to macroeconomic pressures in South Africa.
- Market volatility caused by the technical recession and COVID-19 has impacted consumer spending and investment decisions, affecting Old Mutual's business performance.
- The personal finance and insurance sectors saw declines in profits due to weather-related events, but overall company performance remained stable despite ongoing litigation and leadership issues.
Old Mutual, a leading financial services group, has managed to post positive results despite the challenging economic environment and ongoing leadership issues. In a recent interview with CNBC Africa, interim CEO Iain Williamson discussed the company's performance and future outlook. Key metrics for assessing the group's performance include adjusted headline earnings per share, which increased by 7% year on year, and results from operations, which were down 2% due to macroeconomic pressure in South Africa. Shareholders will also be interested in the 70% decrease in the final dividend, bringing the total for the year to 120%. Like many South African companies, Old Mutual faces significant risks from the technical recession in the country and the impact of COVID-19 on the economy. The market volatility has been high, with the JSE's declining by over 7.5% at one point, impacting consumer spending and investment decisions. This has put pressure on Old Mutual's business, particularly in the personal finance and insurance sectors. The personal finance business saw a decline in profits due to increased claims and underwriting losses caused by weather-related events. However, Williamson noted that the company's overall performance was not significantly affected by the ongoing litigation and reputational risks stemming from the Peter Moyo case. While Old Mutual did not set aside any funds for litigation costs as reported, the company remains focused on its core business and long-term growth. In terms of leadership, the board is in the process of selecting a permanent CEO, and Williamson confirmed that he has not put himself forward as a candidate for the role. Investors and fund managers monitoring Old Mutual will be eager to see how the company navigates the current challenges and charts a path for future success.