Old Mutual Limited recently released its Group annual results for the year ended 31 December 2023. Let’s delve into the key highlights and financial performance indicators that demonstrate the company’s robustness amidst a challenging economic landscape.
Operational and Financial Performance Overview
In 2023, Old Mutual exhibited a strong operational and financial performance, showcasing exceptional sales growth and strategic resilience. The company’s strategic choices and customer-focused approach have resulted in significant sales momentum and value creation.
Sales Growth and Market Share
Old Mutual achieved double-digit sales growth of 17% across its life segments, indicating a substantial increase in market share and profitability within key markets. This growth is attributed to the company’s sound strategic decisions and customer-centric solutions.
Value of New Business and Gross Premiums
The value of new business grew remarkably by 37%, reflecting Old Mutual’s ability to generate profitable new business and manage costs effectively. Gross written premiums also increased by 14%, driven by strong new business growth and strategic acquisitions.
Financial Metrics and Ratios
Old Mutual’s financial metrics demonstrate a healthy performance. The return on net asset value increased to 11.1%, indicating efficient capital utilization and investment returns. The solvency ratio remained solid at 178%, within the target range of 170% to 200%, ensuring adequate capital adequacy.
Dividend Declaration and Shareholder Value
The company’s dividend policy targets an ordinary dividend cover range of 1.5x to 2.0x adjusted headline earnings. The final dividend declared at 49 cents per share reflects Old Mutual’s commitment to delivering value to shareholders and maintaining a sustainable dividend payout ratio.
Comparison of Key Performance Indicators (FY 2023 vs FY 2022):
| Key Metrics | FY 2023 | FY 2022 | Change |
|---|---|---|---|
| Results from operations (Rm) | 8 343 | 7 310 | +14% |
| Adjusted headline earnings (Rm) | 5 861 | 4 850 | +21% |
| Return on net asset value (%) | 11.1% | 9.4% | +170 bps |
| Dividend cover (times) | 1.5 | 1.7 | -12% |
| Gross flows (Rm) | 203 802 | 178 027 | +14% |
| Funds under management (Rbn) | 1 331.0 | 1 231.1 | +8% |
Outlook for 2024 and Strategic Initiatives
Old Mutual anticipates a positive outlook for 2024, with expectations of global economic resilience, easing inflation, and potential interest rate cuts. The company remains committed to delivering profitable growth, enhancing customer solutions, and driving operational efficiencies.
Conclusion
Old Mutual’s 2023 annual results reflect a resilient performance amidst economic challenges. The company’s strategic focus on customer needs, sales growth, financial metrics, and shareholder value creation positions it as a leader in the financial services industry.
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