Old Mutual Ltd (LON:OMU) have seen their shares dive on Monday morning, as the firm gave shareholder’s a mixed update.
Ian Williamson, Interim CEO commented: “Our business was resilient against significant headwinds in 2019. We faced challenging macroeconomic conditions in South Africa, our largest market, and many of our operating countries in the Rest of Africa. This put pressure on the disposable income levels of our customers and on the ability of our businesses to grow value for our customers and investors. We remain confident that our diversified business allows us to protect value for stakeholders in tough economic times.
The Board remains confident that the decision made was in the best interests of our stakeholders and that their duties were discharged in line with the high standard of governance and ethics expected of an established and respected organization like ours.”
The firm noted that its’ total annual profits had dipped, however profit increased after excluding the distribution of Quilter PLC (LON:QLT) and other factors.
Looking at the figures for Old Mutual’s 2019 trading, the firm noted that pretax profit from continuing operating surged 63% to ZAR13.80 billion from ZAR8.45 billion in 2018.
Old Mutual said that this was due to an increase in non-banking investment return to ZAR86.70 billion from ZAR20.51 billion, increasing total revenue and other income up 60% to ZAR176.12 billion from ZAR109.88 billion.
Looking at its’ profit after tax however, the firm saw this metric slump from ZAR42.71 billion the year before to ZAR9.66 billion. Profit after tax attributable to equity holders of the parent fell 74% to ZAR9.39 billion from ZAR36.57 billion – which met expectations in the fall between 74% and 76%.
Old Mutual decided to declare a final dividend of 5 rand cents per share dividend, up 4.2% from 72 cents the year before.
The firm also tried to best reassure shareholders on the current coronavirus pandemic, which has been affecting global businesses for a few months.
William added: “On 11 March 2020, COVID-19 (Coronavirus) was declared as a pandemic due to the rising rate and scale of infection observed. The rapid spread of virus since the start of 2020, and particularly in recent weeks, has caused significant disruption in global equity markets.
We are monitoring this situation on a daily basis. We have established a special committee to ensure that our employees in all of our locations can continue to work safely, whether that is from our premises or from their homes. We have placed restrictions on all cross border business and personal travel to ensure we limit the risk of infection to our employees and customers. We also regularly model the impact of ‘perfect storm’ scenarios on our solvency capital and liquidity levels. These stress tests have shown we remain sufficiently capitalized with appropriate liquidity levels through these scenarios”.
Shares in Old Mutual Ltd trade at 59p (-14.80%). 16/3/20 10:05BST.
