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Alliance News
Old Mutual Ltd on Thursday said it is expecting a decline in 2019 annual profit after the distribution of Quilter PLC along with the unbundling of its stake in Nedbank Group Ltd.
However, excluding these transactions, the financial services does see a strong increase in profit.
The managed separation was completed in October 2018, ending with the unbundling of 32 percent of its Nedbank stake, with Old Mutual still holding 19,9 percent of the lender. Its wealth management business was spun-off as Quilter, and listed in both London and Johannesburg.
Profit after tax attributable to equity holders of Old Mutual is expected to fall by between 76 percent and 74 percent to between ZAR8,78 billion and ZAR9,51 billion in 2018 from ZAR36,57 billion in 2018.
Old Mutual explained: “Profit in the 2018 financial year include the accounting impacts of the transactions executed to complete the managed separation. These transactions included the distribution of Quilter and the unbundling of Nedbank.
“Profit after tax for the comparative period therefore included the consolidated profits in respect of the Quilter and Nedbank businesses, these were classified as profit from discontinued operations.”
“Profits for the comparative period also included the profit recognised on the distribution of Quilter and the unbundling of Nedbank. Profit after tax for the current period no longer includes the impact of these items related to the execution of managed separation, which is the main driver of the expected decrease,” Old Mutual continued.
Basic earnings per share is likely to fall by an estimated 73 percent to 75 percent to between 204,9 rand cents and 197,0 cents from 788,1 cents the prior year.
Headline earnings are set to drop 28 percent to 24 percent to between ZAR10,25 billion and ZAR10,82 billion from ZAR14,24 billion and headline earnings per share is to drop by between 25 percent and 22 percent to 230,2 to 239,4 cents.
Profit after tax on a comparable basis, adjusted to remove the managed separation transactions, is forecast to rise by between 30 percent and 37 percent.
Adjusted headline earnings, again excluding the separation, are to rise by 2 percent to 7 percent, reaching between ZAR9,58 billion and ZAR10,05 billion. Adjusted headline earnings per share is to increase by between 4 percent and 9 percent to between 202,9 cents and 212,6 cents.
Results from operations is to be between ZAR8,68 billion and ZAR9,14 billion, compared to 2018’s ZAR9,14 billion.
Online Reporter