27th Feb 2015 10:50
LONDON (Alliance News) - Old Mutual PLC Friday said its focus in 2015 will be on integrating a series of acquisitions as the Anglo-South African financial services company reported flat adjusted pretax operating profit as a result of a fall in the average rate of the rand against its sterling reporting currency last year.
In a statement, the investment, savings, insurance and banking group said its adjusted pretax operating profit was flat at GBP1.6 billion in 2014, but would have shown a 16% increase if exchange rates had remained constant. On an adjusted basis, each of Old Mutual's core operations reported pretax operating profit. Increases in emerging markets, wealth and institutional asset management more than offset a drop in Nedbank, the group's 52% owned banking subsidiary in South Africa.
Net client cash flow amounted to GBP4.9 billion, while funds under management rose by 9% to GBP319.4 billion on a reported currency basis.
Old Mutual's bid to build an African "financial services champion" led to the acquisition of a majority stake in East Africa's UAP, while Nedbank took a 20% stake in Ecobank Transnational Inc. In the UK, the group has bought discretionary fund manager Quilter Cheviot as it looks to expand its retail investment business in the UK.
"We have invested significantly and reallocated capital in our key markets to grow profits over the long term while holding appropriate levels of capital and leverage. Our focus for 2015 is on integrating the acquisitions, delivering the operational improvements and creating value from these investments," Chief Executive Julian Roberts said in a statement.
However, Roberts cautioned that economic conditions in South Africa, which remains the group's main market, are likely to remain challenging in the short term, pointing to an expectation that growth will be constrained by power shortages.
"A prolonged period of low oil prices will keep inflation down which is positive for the consumer. Our businesses in South Africa are in good shape and we are confident about their resilience in 2015, despite these headwinds," Roberts said.
In the UK, Roberts is eyeing growth as pension and savings reforms that come into force in April drive the group's expectation that demand for financial advice will grow.
Roberts also said that Old Mutual will focus on growth in the US, where the group sold off part of OM Asset Management in an initial public offering that left it with a 78.8% stake. Following the flotation, the business will look for "further penetration" of non-US markets and to partner with asset management boutiques.
Old Mutual increased its dividend for the year by 7% to 8.7 pence per share.
Old Mutual shares were up 0.7% at 224.80 pence in London on Friday.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Old Mutual PLC