OUTSURANCE GROUP LIMITED (OGL) recently released a voluntary trading update for OUTSURANCE HOLDINGS LIMITED (OHL) and a trading statement for the group for the year ending 30 June 2023. The announcement comes after a series of strategic decisions that have significantly impacted the group’s earnings base, leading to positive impacts on earnings from continuing operations.
Diversified Growth in OUTsurance Holdings Limited
The group’s earnings base for the year ended 30 June 2023 was primarily influenced by the performance of its subsidiary OUTsurance Holdings Limited (OHL). As the owner of OUTsurance South Africa and Youi Australia insurance operations, OHL has been a driving force behind the group’s financial performance. Notably, OGL’s expansion into the Republic of Ireland is on the horizon, presenting an exciting opportunity for diversified long-term growth. The company has initiated an authorization process, and if successful, a market entry in Ireland is anticipated during the second half of the 2024 financial year.
The voluntary trading update reveals that OHL’s performance for the year was positively impacted by a significant increase in earnings from Youi Group. This outcome is attributed to robust premium growth, a decrease in natural perils claims due to favorable weather exposure, and higher investment income driven by the rising interest rate environment.
Strategic Review of OUTvest
The group recently conducted a strategic review of its subsidiary, OUTvest, which currently remains a sub-scale business. In light of the review, OGL is considering a restructuring plan for OUTvest, including the possibility of a disposal. The company has assured shareholders that client investments will remain unaffected, and all client obligations will continue to be honored without any operational disruptions. As a regulated Financial Services Provider and a wholly-owned subsidiary of OHL, OUTvest plays a significant role in the group’s overall strategy.
Financial Guidance for Shareholders
The trading statement provides valuable insights into OGL’s expected earnings for the year ending 30 June 2023. The guidance is presented in a table format below:
| Reported Year Ended 30 June 2022 (cents) | Guidance for Year Ended 30 June 2023 | Expected % Increase/Decrease | Expected Range (cents) |
|---|---|---|---|
| Continuing Operations | |||
| Normalised Earnings per Share | 115.8 | 55% to 65% | 179.5 to 191.1 |
| Headline Earnings per Share | 95.0 | 95% to 105% | 185.3 to 194.8 |
| Earnings per Share | 94.1 | 95% to 105% | 183.5 to 192.9 |
| Continuing and Discontinued Operations | |||
| Normalised Earnings per Share | 192.8 | (10%) to 0% | 173.5 to 192.8 |
| Headline Earnings per Share | 169.7 | 5% to 15% | 178.2 to 195.2 |
| Earnings per Share | 1,463.2 | (90%) to (80%) | 146.3 to 292.6 |
OGL considers normalised earnings (excluding non-operational items and accounting anomalies) as the key indicator of the group’s operational performance.
Positive Outlook and Financial Reporting
The voluntary trading update and trading statement paint a promising picture for OUTSURANCE GROUP LIMITED. The positive earnings projections, particularly from continuing operations, indicate the success of strategic decisions made by the group. These decisions include the disposal of Hastings Group (Consolidated) Limited (Hastings), the settlement of preference share debt, and the unbundling of interests in Discovery Limited (Discovery) and Momentum Metropolitan Holdings Limited (Momentum Metropolitan).
As OUTSURANCE GROUP LIMITED continues to grow its presence in South Africa and Australia and gears up for potential expansion into Ireland, shareholders can look forward to a strong financial performance in the coming years.
The financial results for the year ending 30 June 2023 are expected to be released on the Stock Exchange News Service (SENS) on Friday, 15 September 2023. The responsibility for the financial information on which this update is based lies with OGL’s directors and has not been reviewed by the group’s external auditor.
In conclusion, OUTSURANCE GROUP LIMITED’s focus on diversified growth and strategic decision-making have paved the way for a prosperous future, with the potential for enhanced value for shareholders and stakeholders alike.
