AlexForbes interim profit from operations up 13%

AlexForbes, a key player in South Africa's two-pot retirement system, has announced a robust financial performance for the six months ending September 2024. The company reported a 12% increase in operating income, with profit from operations growing by an impressive 13%. Headline earnings per share also saw a positive trend, rising by 3% to 28.4 cents. The firm revealed that around 350,000 members have submitted claims totaling approximately R6.5 billion. To provide insights into this performance, CNBC Africa interviewed Dawie de Villiers, the CEO of AlexForbes. During the interview, de Villiers discussed the specific factors that contributed to the company's growth, including market conditions, acquisitions, and client engagements related to the 2Pot system. He highlighted the role of the markets, which delivered a strong return of about 11% and the impact of previous acquisitions, contributing 2% to the results. Additionally, the core businesses of administration and consulting experienced steady growth, with minimal client losses. De Villiers also mentioned the potential for further consolidation in the industry, particularly with the increasing regulatory pressures. The implementation of the 2Pot system was accompanied by a rise in operating expenses, driven by technology changes, transaction fees, and the hiring of additional staff. The CEO emphasized the importance of member education and empowerment in making informed decisions about their retirement savings. He noted a significant increase in member engagements, driven by the enhanced interest in retirement planning and savings. This heightened engagement has also led to higher client retention rates, as individuals have better access to advice and information through the company's app and services. Regarding the expected withdrawals under the 2Pot system, de Villiers revised the initial estimates, now anticipating between R7.5 billion and R10 billion in the first year. He projected industry-wide withdrawals between R50 billion and R70 billion, emphasizing the positive impact on the economy and GDP growth. AlexForbes remains optimistic about its future performance and client engagements, as the company continues to navigate the evolving landscape of retirement savings and investments.