| Wed 5 Dec 2007, 16:00 | | SLM/SLA - Sanlam Limited - Operational update - December 2007 |
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SLM
SLM
SLM/SLA - Sanlam Limited - Operational update - December 2007
Sanlam Limited
(Incorporated in the Republic of South Africa)
(Registration number 1959/001562/06)
JSE share code: SLM
NSX share code: SLA
ISIN number: ZAE000070660
("Sanlam" or the "Group")
OPERATIONAL UPDATE - DECEMBER 2007
The Group achieved sound overall results for the ten months to 31 October 2007,
despite the volatility in global equity and debt markets. Growth in total new
business volumes of approximately 25% reflects a continuance of the Group`s
strong new business performance. As communicated before, the 2007 results need
to be evaluated against an increasing comparative 2006 base. The rate of growth
in Normalised Core Earnings per share and Normalised Headline Earnings per share
for the ten months has accordingly moderated since the announcement of the
Group`s 2007 interim results to 24% (June 2007: 28%) and 13% (June 2007: 18%)
respectively. Shareholders need to be aware of the impact on Group earnings
caused by volatility in the financial markets. Relative market movements towards
the end of the 2007 financial year may have a major impact on the level of Group
earnings to be reported for the full year.
The Sanlam Board remains committed to capital optimisation in the Sanlam group
and continues to investigate and evaluate the most efficient alternatives of
utilising discretionary capital, either to invest in value adding strategic
ventures or to reduce capital that is in excess of the Group`s ongoing business
requirement. Shareholders will be kept informed of progress in this regard. In
the interim, we continue to buy back Sanlam shares in the market in periods of
relative price weakness. Since the announcement of the Sanlam interim results in
September 2007 approximately 64 million Sanlam shares have been acquired for a
consideration of R1,46 billion, bringing the total for 2007 to approximately 126
million shares at a total consideration of R2,89 billion.
Salient features of the Group`s performance for the 10 months to October 2007
are:
New business volumes:
- Overall new business volumes have increased 25% on the comparative period in
2006.
- Life insurance volumes increased by 13%.
* Strong growth from Sanlam Personal Finance (SPF) - South African new
recurring premiums are up 17% and single premiums are up 9%;
* Sanlam Developing Markets (SDM) is performing in line with expectations -
new SA recurring premiums are up 13% with continued strong growth in non-SA
business flows;
* Recovery in Sanlam Employee Benefits (SEB) - new business flows are at
similar overall levels as in the 2006 comparative period;
* Overall, the life new business margin (based on the present value of new
business premiums) has been maintained at the June 2007 level of
approximately 2.3%.
- Gross investment business increased by 30%.
* SPF`s new investment business increased by more than 30%, supported by good
growth in Namibian unit trust flows;
* Gross investment flows in Sanlam Investments (SIM) are up approximately
30%, supported by good wholesale, multi-manager and collective investments
business flows. SIM`s assets under management amounted to R458 billion on 31
October 2007.
- Net fund inflows were in excess of R9 billion, largely due to strong
investment business flows. Negative life business flows continued, in
particular due to net outflows at SEB and an increase in SPF maturity
benefits compared to the first ten months of 2006.
Earnings:
- Net result from financial services increased by 13%.
* SPF, SIM, SEB and Santam achieved solid performances;
* SDM`s performance has been impacted by new business strain and an expense
overrun in Channel Life. The expense overrun is receiving management
attention;
* Global debt and equity market volatility had some adverse impact on SCM`s
performance, but its return hurdle rate is still being achieved.
- Core earnings are up 19% (24% increase in normalised core earnings per share).
- Normalised headline earnings per share are up 13%.
* A relatively more conservative asset mix for the capital portfolio resulted
in a strong increase in investment income (interest and dividends) at the
expense of potential capital appreciation;
* Share buy-backs during the first ten months of 2007 caused a 3% reduction
in the adjusted weighted average number of shares in issue.
Bellville
5 December 2007
Sponsor:
Deutsche Securities (SA) (Proprietary) Limited
Date: 05/12/2007 16:00:06 Produced by the JSE SENS Department.
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