| Wed 12 Mar 2008, 8:01 | | MET/MTD - Metropolitan - Metropolitan`s assets und |
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MET
MET
MET/MTD - Metropolitan - Metropolitan`s assets under management exceed R100
billion in Peter Doyle`s final set of results
Metropolitan Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 2000/031756/06
JSE Code: MET
NSX Code: MTD
ISIN Code: ZAE000050456
("Metropolitan")
Metropolitan`s assets under management exceed R100 billion in Peter Doyle`s
final set of results
Metropolitan`s results for the financial year ended 31 December 2007, the
group`s last set of results under the leadership of current ceo Peter Doyle,
were, without exception, ahead of consensus forecasts by investment analysts
covering the life insurance industry. Two key milestones were reached: R100
billion in assets under management and R1 billion in core earnings.
By way of a further accolade to the man who has been at the helm for the past
decade, the group posted a 32% increase in the value of new business across the
group, up from R254 million in 2006 to R336 million, a noteworthy achievement in
the current economic climate.
Metropolitan also stood out in its ability to increase the inflow of funds from
clients, with net funds received from clients/customers in 2007 growing by more
than 350% to a record-beating R12.5 billion (R2.7 billion in 2006).
The group has maintained a robust positive cashflow position throughout its 110
year history, in marked contrast to strained industry cashflows in recent years.
Both its administration businesses - asset administration and healthcare
respectively - were responsible for quantum leaps in respect of new inflows,
confirming the success of the diversification strategy that Doyle entrenched
ever more firmly throughout his tenure.
Thanks to both the higher value of new business and greater operational
efficiencies, all five business clusters lifted their contributions to group
profits, once again underlining the advantage of multiple revenue streams.
The newer and therefore smaller entities achieved the strongest growth in
income, international, health and corporate in particular. International`s
operating profit rose by 80% from R61 million to R110 million while health`s
diluted core headline earnings jumped 25% from R51 million to R64 million.
Corporate recorded a 21% rise in operating profit from R145 million to R176
million.
Total group recurring premium income, the lifeblood of the long-term insurance
industry, was 10% higher at R7 billion (2006: R6.3 billion). Retail, still at
the heart of the group`s business operations, achieved a recurring premium
income increase of 9% while corporate registered growth of 12%.
In the retail arena, single premium income advanced 30% (from R1 872 million to
R2 438 million), corroboration of escalating penetration by the Metropolitan
brand into areas where previously the group`s footprint was relatively small.
At R1 003 million (18% higher than 2006`s R847 million), diluted core headline
earnings marked the attainment of a major milestone in the group`s history by
breaking through the R1 billion barrier well ahead of management expectations.
The equivalent per share figure climbed by an even more substantial 26% from 113
cents to 142 cents over the twelve months.
The growth in the per share figures was enhanced throughout by the reduction in
the number of shares in issue due to share buy-back activities as part of the
group`s ongoing capital management programme. Despite investment market
volatility, Metropolitan remains appropriately apitalized.
"We regularly review our capital levels and will continue to buy back shares
through the market as opportunities arise while simultaneously exploring other
ways of effectively deploying capital," says Doyle.
For shareholders, the 23% increase in the total dividend for the year to 95
cents (2006: 77 cents) is extremely pleasing, confirming that the board remains
convinced of the group`s medium-term earnings prospects.
In terms of embedded value, one of the life industry`s most important valuation
standards, Metropolitan`s return of 18% is gratifying, given that it far
outstrips the group`s cost of capital and was driven mainly by operational
improvements and the increased value of new business.
A 20% increase in assets under management to exceed the R100 billion for the
first time (R102.2 billion vs R85.9 billion at 31 December 2006) provides
further confirmation of the fact that Metropolitan is making its presence ever
more strongly felt amongst the bigger players in the industry.
On 1 April, Wilhelm van Zyl will succeed Peter Doyle as group ceo. Metropolitan
has undergone significant changes during the past ten years to attain its
current strategic position, where it remains focused on creating prosperity for
the people of Africa by providing them with a comprehensive range of accessible,
affordable and appropriate financial products and services.
See over for table sunmarising stakeholder value-add
Summary of Metropolitan`s stakeholder value-add to December 2007
December December % growth
2006 2007
Diluted core headline earnings R847m R1 003m 18.4
Diluted core headline earnings per 113c 142c 26
share
Earnings R1 947m R1 503m (23)
Diluted earnings per share 279c 232c (17)
Return on embedded value (%) 26.1 17.8
Embedded value per share 1 710 c 1 857c
Total dividend per ordinary share 77.00c 95.00c 23
Total premiums received R11.0bn R11.7bn 6
Total assets under management R85.6bn R102.2bn 20
Notes
- Core headline earnings are a particularly appropriate measure of the
performance of financial services groups such as Metropolitan in that they
eliminate items of both a once-off and an inherently volatile nature, such
as changes to the valuation basis and capital appreciation/depreciation.
- Diluted core headline earnings have been adjusted for the convertible
redeemable preference shares, the staff share scheme shares and the
treasury shares in issue - all dilutory in nature. The preference shares
were issued to a consortium controlled by Metropolitan`s strategic
empowerment partner, Kagiso Trust Investments (KTI).
End
ISSUED BY SUE SNOW
FINANCIAL MEDIA SPECIALIST
METROPOLITAN HOLDINGS LIMITED
TEL 021 9406119 OR 083 300 9745
DATE 12 MARCH 2008
QUERIES PETER DOYLE
GROUP CHIEF EXECUTIVE
METROPOLITAN HOLDINGS LIMITED
TEL 021 9405681 OR 082 880 2690
PRESTON SPECKMANN
GROUP FINANCE DIRECTOR
METROPOLITAN HOLDINGS LIMITED
TEL 021 9406634 OR 083 285 6454
TYRREL MURRAY
GENERAL MANAGER: GROUP FINANCE
METROPOLITAN HOLDINGS LIMITED
TEL 021 9405083 OR 082 889 2167
Sponsor
Merrill Lynch South Africa (Pty) Ltd
Date: 12/03/2008 08:01:00 Produced by the JSE SENS Department.
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