Old Mutual shines on Nedbank strength

2012-08-08 09:32

London - Insurer Old Mutual [JSE:OML] reported a 12% rise in first-half profit, helped by a strong performance at its South African banking business, and said it was pressing ahead with plans to expand across sub-Saharan Africa.

Old Mutual, which runs insurance, banking and asset management businesses in about 30 countries, made an adjusted pretax operating profit of £791m in the first six months of the year, it said on Wednesday.

The improvement partly reflected a 27% jump in profit at Nedbank Group [JSE:NED], its majority-owned South African banking business.

Old Mutual, which in March announced plans to bolster its presence in fast-growing African markets, said it was considering a move into Nigerian non-life insurance.

The company, which has said it aimed to sell its Nedbank stake as part of a plan to refocus on life insurance and asset management, also said it had paid off £603m of debt this year.

That brought it within £450m of its target of reducing borrowing by £1.5bn by the end of 2012.

Old Mutual shares closed at 170 pence on Tuesday, valuing it at about £8bn.

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  • CDerrenberg - 2012-08-08 11:28

    "Old Mutual not that great !" Old Mutual currently seems like an organization with good growth potential and the interim results seems fairly good. Mention is made of an expansion into Africa etc, which is not the most viable option and could be seen as high risk territory in general. Unfortunately the problem lays in the share price which is currently totally over inflated at the current 21.40 type of level. The current "good news" is pushing the price upwards, but currently, the totally over inflated and over bought share is hovering at very dangerous levels for medium term and even longer term investors and a strong correction in share price should / could be expected any day or moment. Good news to the investors shorting Old Mutual ! This is in fact really a R16 share, at very best, currently seriously on steroids ! The Old Mutual history, including service and performance, is not all that good and in fact disappointing to say the least. Without going into detail at this point, countless parties lost significantly as a result of doing business with Old Mutual in the past. Nothing much has changed yet and not much really will in the near future.

  • CDerrenberg - 2012-08-08 14:43

    "Mutual not that great": We notice some "likes" and some "dislikes" but no real comments. This is to be expected. We believe that most are aware of the fact that Old Mutual is one of the organizations reporting fair results and "potential new growth prospects", BUT to the expense of whom and what ?? That is the question. At this point the only individuals who were gaining anything at all were share traders who went long on Old Mutual shares in the market, BUT this based ONLY on Old Mutual's strong marketing campaigns of how great the company is and how well it is performing. This "nice trend" is now also coming to an end as Old Mutual is losing momentum as we speak and really struggles to maintain levels at or above 21.40 during trading session today. Probably much to do with the fact that Old Mutual is supported by Nedcor all the way, and now that Nedcor is in the red (Also totally blown up in value, over bought and at a point, or peak, of losing share value at any point soon) for the day so far, Old Mutual is simply following and start losing footing. As mentioned before, Old Mutual is really a R14.50 to R16.00 share, in value, at very best. All of the best for you betting on Old Mutual and for those of you going short . . enjoy !

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