| Wed 14 Sep 2011, 7:07 | | MMI - MMI Holdings Limited - MMI charts new vision |
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MMI
MMI
MMI - MMI Holdings Limited - MMI charts new vision
MMI HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2000/031756/06
ISIN Code: ZAE000149902
JSE Share Code: MMI
NSX Share Code: MIM
("MMI" or "the company")
Media release
MMI Holdings year end results
14 September 2011
MMI charts new vision
MMI Holdings Limited (MMI) today communicated its group strategy to be a
leader in meeting financial services needs on the back of a good set of
maiden full-year results to June 2011, with core headline earnings
increasing by 12% to R2.6 billion.
Born from the merger of Metropolitan and Momentum, MMI listed on the
Johannesburg Stock Exchange (JSE) on 1 December 2010. It now has six
operating divisions, offering a wide range of financial products and
services to all market segments in South Africa, as well as chosen
African and other selected international markets.
Speaking at the presentation of MMI`s full-year results, chief executive
officer, Nicolaas Kruger, said that the group had charted a way forward
to maximise the benefits of bringing Metropolitan and Momentum together.
"As a group, we have identified four strategic pillars, being the areas
in which we have to excel if we are to achieve our strategic objectives.
These pillars - in-depth market knowledge, innovative solutions,
effective distribution and an entrepreneurial culture - are the solid
foundation on which MMI will build," says Kruger.
"These pillars will be the key to success in attaining our six
strategic objectives, which we have defined as: developing strong
client relationships; building market-leading divisions; maximising
integration benefits; optimising capital management; competing in
profitable markets; and growing our people," continued Kruger.
The year-end results that accompanied the release of the MMI strategy
were good despite a continued volatile economic environment. The group`s
value of new business grew by 35% to R632 million, while its new
business annual premium equivalent was 15% higher at R5.8 billion and
core headline earnings increased by 12% to R2.6 billion.
"Thanks to prudent capital management, MMI remains in a sound financial
position. The capital adequacy ratio (CAR) cover of both of our life
companies stands at 2.3 times, ahead of the implementation of the
Financial Services Board`s risk-based solvency assessment and management
(SAM) regime in 2014," says Kruger.
The robust results were underpinned by balanced contributions from all
six MMI operating divisions.
"Both our retail businesses posted strong results, with Metropolitan
Retail achieving significantly improved new business margins and
Momentum Retail remaining responsible for the largest share of the
group`s value of new business and operating profit. Our decision to keep
the Metropolitan Retail and Momentum Retail distribution channels
separate so that they would be able to focus on delivering and
developing products that meet the unique needs of their respective
target markets has paid off," says Kruger.
The investments division has just concluded a rebranding exercise to
unite its various business units under the Momentum brand. "With R275
billion assets under management, I believe Momentum Investments has
taken a significant step forward in bedding down what I believe will
become a strong player in traditional asset management, alternative
assets, collective investments, properties and as a manager of
managers," says Kruger.
Momentum Employee Benefits saw very strong growth in their umbrella fund
and risk offerings of 38%, and total new business volumes grew by 15% on
an annual premium equivalent basis. "The division also realised some
cost savings in their systems and an improvement in their operating
efficiencies as a result of the merger," says Kruger.
MMI has an extensive African footprint, with Metropolitan International
present in 12 countries outside South Africa to offer both health and
life insurance. The international health business saw a 7% increase in
lives covered but recorded negative results, primarily due to higher
than expected claims experience. New life insurance business grew 28% on
an annual premium equivalent basis, with large new business
contributions from Botswana and Nigeria," says Kruger.
"The recent release of the National Health Insurance (NHI) green paper
is a positive step forward in providing affordable healthcare for a
greater proportion of the South African population. Metropolitan Health
has a wealth of expertise and experience in servicing and managing risk
for most of the country`s largest medical schemes at low cost and a
proven track record of delivery, with a total client base of more than 3
million lives," says Kruger.
"The integration processes within the group as a whole as well as within
the various divisions are progressing well. Reorganisation,
restructuring and the finalisation of business and information
technology strategies are on track. Merger synergies have also been
identified that will enable us to achieve cost savings of R500 million
over the next three years. We remain acutely aware of the people
challenges posed by change and continue to engage with our staff in a
concerted effort to confront these challenges head on and deal with them
expeditiously. MMI has, however, been infused with new energy and
excitement, and our people are united behind us in our striving to take
the group to where we want it to be. We are currently undergoing
processes to define our core values to help achieve MMI`s vision of
becoming a leader in meeting financial services needs," concluded
Kruger.
Ends
Released by: Redline On behalf of: MMI Holdings
Contact: Tandisizwe Mahlutshana Contact: Lerato Mametse
Tel: 021 680 7776 / 071 115 6092 Telephone: 012 671 8818 / 084 406 8272
Email: Email:
Tandisizwe@draftfcbct.co.za lerato.mametse@mmiholdings.co.za
Note: MMI`s statutory results show Momentum`s results for the 12 months
ended 30 June 2011 and Metropolitan`s results for the 7 months ended 30
June 2011. However, to illustrate the MMI`s progress to the market and
provide a meaningful comparison, the set of results were prepared on the
basis that Metropolitan and Momentum had been combined on 1 July 2009.
This makes it possible to compare the performance of the combined MMI
Group for the full year ended 30 June 2011 with the Group`s performance
for the full prior year ended 30 June 2010.
Key aspects of results
Rm Change
Value of new business 632 +35%
New business *APE 5 848 +15%
Segmental core headline earnings 2 588 +12%
Final dividend per share (cps) 63 +5%
Total dividend for year (cps) 126 +26%
Embedded value per share (cps) 1 912 +6%
Momentum Retail
2010 2011 Change
Rm Rm
Total funds received 25 243 28 310 12%
New business **PVP 25 840 28 758 11%
Recurring 1 152 1 237 7%
Single 19 846 22 673 14%
Value of new business 248 288 16%
PVP margin 1.0% 1.0%
Operating profit after tax 600 699 17%
Metropolitan Retail
2010 2011 Change
Rm Rm
Total premium income 5 806 6 393 10%
New business PVP 4 095 5 698 39%
Recurring 773 921 19%
Single 1 205 1 901 58%
Value of new business 116 257 >100%
PVP margin 2.8% 4.5%
Operating profit after tax 367 394 7%
Momentum Employee Benefits
2010 2011 Change
Rm Rm
Total funds received 8 585 8 187 (5)%
New business PVP 7 072 8 300 17%
Recurring 546 753 38%
Single 3 496 2 778 (21)%
Value of new business 91 62 (32)%
PVP margin 1.3% 0.7%
Operating profit after tax 204 187 (8)%
Metropolitan International
2010 2011 Change
Rm Rm
Life insurance
Total premium 1 402 1 637 17%
income
New business PVP 696 967 39%
Value of new 14 25 79%
business
PVP margin 2.0% 2.6%
Health
Membership 117k 125k 7%
Claims ratio 67% 77% 15%
Total
Operating profit 77 32 (58)%
after tax
Momentum Investments
2010 2011 Change
Rbn Rbn
Funds received 52.4 47.0 (10)%
Funds paid out 79.1 62.8 (21)%
Net flows from 3rd party clients (26.7) (15.8) 41%
Assets under management 267 275 3%
Rm Rm
Operating profit after tax 165 131 (21)%
Metropolitan Health
2010 2011 Change
Rbn Rbn
Gross inflows 28.8 32.3 12%
Gross outflows 24.2 28.9 19%
Total principal members
Momentum open scheme 91 075 93 885 3%
***GEMS 475 234 559 981 18%
Other schemes 531 946 544 066 2%
Rm Rm
Operating profit after tax 97 114 18%
*APE - Annual Premium Equivalent
**PVP - Present Value of Premiums
***GEMS - Government Employees Medical Scheme
Date: 14/09/2011 07:07:57 Produced by the JSE SENS Department.
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