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Old Mutual - Softness in the H1 F2019 result

Life Insurance - 3 September 2019

Ingham Analytics says that the reported results for the six months ended 30 June 2019 are weak and are off an already tepid historic base. Ingham Analytics points out that results from operations for the full year in F2018 were weak with adjusted earnings essentially flat if the functional currency change for Zimbabwe is stripped out. They point out that little has changed, and the medium-term outlook is not encouraging. Moreover, Ingham Analytics takes a negative view of the share buyback programme and don’t see it as a vote of confidence. There is some encouragement in that Ingham Analytics say that the capital position is strong with solvency measures toward the higher end. There is no change to estimates for earnings following these interim results. Shareholders do get a dividend of 45 cents per share, with the last day to trade cum dividend 17 September. Ingham Analytics say the fact that Old Mutual is at a PE discount to Sanlam does not make it a compelling buy.

Trader: R15.00

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