Old Mutual share price: Company to separate underlying businesses

on Mar 11, 2016
Updated: Oct 21, 2019

Old Mutual (LON:OML) has this morning confirmed that it will separate its underlying businesses. The statement comes alongside the group’s full-year results, with Old Mutual delivering a four-percent rise pre-tax adjusted operating profit.

**Highlights from Old Mutual’s statement:**
· Pre-tax adjusted operating profit (AOP) of £1.7 billion up 11% in constant currency, up 4% in reported currency
· Solvency II surplus of £1.6 billion with ratio of 135%, excluding surplus of £0.8 billion from Old Mutual Emerging Markets and Nedbank
· IFRS profit after tax distributable to equity holders of the parent of £614 million, up 5% in reported currency

· Four strong businesses with combined pre-tax operating profits of £1.8 billion
· Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank and OM Asset Management to be separated
· Managed separation expected to be materially completed by end of 2018
Bruce Hemphill, Group Chief Executive, commented:
“The strategy we have announced today sets out a bold new course to unlock value currently trapped within the Group structure.
“We have four strong businesses that can reach their full potential by freeing them from the costs and constraints of the Group. As you can see from our results, these businesses are performing strongly, have excellent competitive positions in sizeable markets and the underlying growth potential to flourish independently.
“Our new strategy will allow each business to have simpler access to capital markets to fund its growth more easily and be valued more appropriately, with more straight forward regulatory arrangements. We are announcing today a strategy that will allow us to release the potential within the Group for the benefit of all its stakeholders for many years to come.
“There is likely to be a range of external influences on future Group reported earnings including slower economic growth, exchange rates and equity market volatility and how we execute the managed separation. We nevertheless believe that our four strong businesses are well placed to continue to perform strongly in their domestic markets.”
Patrick O’Sullivan, Chairman, commented:
“Old Mutual is an iconic South African institution with a heritage of which it remains justifiably proud. From its roots as the premier financial services group in South Africa, it has evolved through the listing in London to reach a point today where we have four strong businesses.
“After much careful thought, we have taken the important decision that the best interests of shareholders will be served by enabling these businesses to chart independent courses over the medium term. We owe a considerable debt to the loyal staff whose efforts have shaped the evolution of the Group. I am sure that they, customers and shareholders alike will recognise the logic behind our decision and can look forward to the opportunity to create long term-shareholder value in the next phase of the evolution of Old Mutual.”
As of 07:06 GMT, Friday, 11 March, Old Mutual plc share price is 185.30p.