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Cape Town - Old Mutual announced a 22% jump in pre-tax profits in 2017 on Thursday, saying it “improved the performance of the underlying businesses and set them up for continued future growth”.
In a results announcement, Old Mutual said its pre-tax adjusted operating profit grew to £2.0bn for the year to end-December 2017, up from £1.7bn in 2016.
“Old Mutual's operating performance was ahead of our expectations,” said its group chief executive Bruce Hemphill in a statement.
Hemphill said this was despite “challenging macroeconomic conditions” in South Africa, the group’s largest market.
“Weakness in consumer and business confidence (created) a tough environment for banking, long-term investment and savings [in South Africa],” he said.
Hemphill added he expected the swearing in of Cyril Ramaphosa as the country’s new president to “lead to a recovery in sentiment and confidence over time despite stretched public finances and governance challenges”.
Old Mutual [JSE:OML] shares were trading at R42.26 on the JSE at 12:15, up 3.37% on the day.
'Managed separation'
The group CE said Old Mutual’s previously announced plans to split up the group were on track for completion by the end of 2018.
“We have carried out the preparation needed to give effect to the managed separation,” he said.
The investment firm is set to separate Old Mutual's four current constituents - Old Mutual Emerging Markets, the Nedbank Group, Old Mutual Wealth, and Old Mutual Asset Management – into stand-alone entities.
Old Mutual Wealth will be renamed Quilter Plc, and will focus principally on wealth management in the UK.
Old Mutual Emerging Markets, meanwhile, will be headquartered in South Africa and incorporated into Old Mutual Limited (OML), the group's local holding company.
According to Hemphill, Quilter and OML will be listed on both the London and Johannesburg Stock Exchanges.
