Old Mutual profit rises on UK, S. Africa boost

Operating profit rose 20 per cent to £904 million, boosted by growth in its South African operations, including Nedbank, and the rest of the continent.

LONDON-Insurance company Old Mutual PLC (OML.LN) Thursday reported a rise in interim net profit amid a strong performance in the United Kingdom and South Africa.

Group chief executive, Julian Roberts, who is stepping down, said: “This has been an exceptional six months for Old Mutual”.

“Last year, we reallocated significant capital to buy quality businesses in our core markets”.

“Our businesses in South Africa continue to perform very well in the context of challenging economic conditions in large emerging markets”.

In the UK, meanwhile, the insurer said it was seeing further proof that it has the right business model, adding that it reckons it will benefit from the ongoing reform in the pensions market.

The company raised the interim dividend 8 percent to 2.65 pence.

Old Mutual has been building its retail investment business in the UK and acquired discretionary fund manager Quilter Cheviot and adviser network Intrinsic as part of that goal.

“In the sector we’ve probably got the highest profit growth at this period in time”, Roberts said, with the firm’s return on equity at 15 percent, at the top of its target range. Nevertheless, I believe that the Government must balance pension liberalisation with the need for individuals to save for their retirement.

In response, shares in Old Mutual rose to the top of the FTSE 100 (.FTSE) leaderboard, up 2.6 percent at 224 pence a share, when the index was down 0.3 percent.