Old Mutual Full-Year Profit Slides as South Africa Economy Slows

JOHANNESBURG (Capital Markets in Africa) – Old Mutual Plc, the U.K.-based insurance company, said full-year profit dropped 7.2 percent after the pound weakened after Britain’s decision to leave the European Union and its South African operations contended with the slowest economic growth since the 2009 recession.

Net income declined to 570 million pounds ($693 million) in the 12 months through December from 614 million pounds a year earlier, the London-based company said in a statement on Thursday. Adjusted net asset value increased to 228.6 pence a share from 178.9 pence a year earlier, while adjusted earnings per share were little changed at 19.4 pence compared with 19.3 pence a year earlier.

Old Mutual said a year ago it will separate its four units — which include wealth, emerging markets, South Africa’s Nedbank Group Ltd. and U.S.-basedOM Asset Management Plc — by the end of 2018. The break-up plan came after a strategic review started by Chief Executive Officer Bruce Hemphill in November 2015 concluded that the company traded at a discount to the value of its four units and that more worth would be created by splitting the assets.

Old Mutual has been investing in its units to ensure they’re ready to operate as standalone businesses. In February, Old Mutual Wealth reached a conditional agreement to acquire the financial adviser network, Caerus Capital Group Ltd., for an undisclosed amount. Old Mutual Asset Management, known as OMAM, sold more shares into the market to decrease its parent’s holdings, while Old Mutual redeemed some debt to get ready for what it calls the managed separation. It also sold Old Mutual Wealth Italy, completing its final divestment in that unit’s European businesses.

“All of our businesses have seen a reasonable start to the year,” the insurer said in the statement. The stock fell 0.1 percent to 36.16 rand by 9:44 a.m. in Johannesburg.