| Tue 4 Sep 2001, 0:00 | | Old Mutual Plc - Results For The Six Months Ended |
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HIGHLIGHTS
* Operating profit* of GBP455 million (2000: GBP457 million), a 10% increase
in Rand terms to R5,195 million (2000: R4,721 million)
* Operating earnings per share* of 7.8p (2000: 9.0p) decreased 13%, a 3%
decrease in Rand terms to 89.3c (2000: 92.4c)
* Underlying life assurance operating profit before long term investment
return of GBP145 million (2000: GBP135 million) increased 7%, a 19% increase
in Rand terms to R1,656 million (2000: R1,395 million)
* Banking operating profit of GBP168 million (2000: GBP156 million)
increased 8%, a 19% increase in Rand terms to R1,918 million (2000: R1,610
million)
* Positive net fund inflows from major US asset managers, with retained
Group funds under management increasing 2% over the period
* Embedded value of GBP5.7 billion (31 December 2000: GBP5.6 billion)
increased 3%, the same increase in Rand terms to R64.7 billion (31 December
2000: R62.8 billion)
* Interim dividend of 1.7p (2000: 1.6p), an increase of 6%
* Operating profit and operating earnings per share are stated before
goodwill amortisation and exceptional items and have been calculated using a
long term rate of return.
Mike Levett, Chairman and Chief Executive, comments:
"These results are positive against a background of declining international
equity markets and a further fall in the value of the Rand. Our focus
continues to be on delivering value from our recently acquired international
businesses, and our core South African operations, to build a strong base
for future growth."
4 September 2001
Media and Analyst Enquiries:-
Old Mutual plc
Julian Roberts, Finance Director
James Poole, Investor Relations
Tel: +44 20 7569 0100
College Hill (UK)
Gareth David
Tony Friend
Tel: +44 20 7457 2020
College Hill (South Africa)
Nicholas Williams
Linda Baker Tel: + 27 11 447 3030
CHIEF EXECUTIVE'S STATEMENT
In the first six months, our South African businesses have all performed
well with substantial increases in Rand profitability and the Group
continued to build upon its international presence in key financial markets.
In April we announced that we had reached an agreement to acquire Fidelity &
Guaranty Life in the United States, and in May we launched our Americom US
life venture. These acquisitions, together with last year's acquisition of
United Asset Management, create an exciting capability to distribute savings
and investment products in the US.
Our results for the first half have been impacted by the depreciation of
the Rand against Sterling and declines in world equity markets. The average
Rand/Sterling exchange rate in the period was 11% lower than the equivalent
period last year, thereby reducing operating profit for the six months ended
30 June 2001 by approximately GBP43 million. World-wide equity market
conditions in the first half-year were challenging, as evidenced by an 11%
fall in the MSCI World Index, although the JSE increased 11%.
In the first half the Group's smoothed operating profit of GBP455 million
is on par with the GBP457 million of the prior year, and well ahead of the
GBP283 million of 1999. Operating earnings per share of 7.8p was 13% below
the 9.0p last year. Embedded value of GBP5.7 billion at 30 June 2001
increased 3% from GBP5.6 billion at December 2000, representing GBP1.60 per
share, an increase of 3% from GBP1.56.
Significant progress has been made in the reorganisation of our asset
management businesses. The positive benefit resulting from our strategic
review of United Asset Management last year, is evidenced by the strong
turnaround this year in net fund inflows at Pilgrim Baxter and the Old
Mutual Asset Managers (US) companies. The integration of the Gerrard back
office is also proceeding according to plan.
The result from our underlying life operations of GBP145 million, before
long term investment return, is 7% higher than the GBP135 million last year
(a 19% increase in Rand terms). This is a good performance, which reflects
positive investment returns in South Africa. Long term investment return of
GBP82 million is 28% lower than the GBP114 million last year reflecting the
redeployment of capital to purchase UAM. The value of new business on an
embedded value basis increased 4% to GBP27 million from GBP26 million last
year, a 14% increase in Rand terms. Sales in the first quarter were
disappointing, but have improved during the year. We spent some GBP9
million on building our new businesses in the US (Americom) and the UK (due
to start later in the year).
The Group's financial services businesses produced an operating profit of
GBP90 million, an increase of 150% when compared to the GBP36 million in the
prior year, principally as a result of a GBP64 million contribution from our
US asset management businesses, which we acquired in September 2000. Funds
under management at the end of the period were GBP166 billion, a decrease of
2% from GBP169 billion at 31 December 2000, although this equates to a 2%
increase in funds after adjusting for GBP7 billion of fund outflows where
affiliates have been sold. Group funds under management have been assisted
by the strengthening US dollar. Average US dollar fund levels have
decreased by an average of 10%. Completed affiliate sales in the US since
acquisition have returned after-tax sale proceeds of $255 million to the
Group.
Our banking operations produced an operating profit of GBP168 million, an
increase of 8% over the equivalent prior year period. Nedcor, our 53% owned
subsidiary, earned a first half operating profit of GBP172 million before
exceptional items, an increase of 7% from GBP161 million in the prior year
and reported positive results from its strategic alliances. During the
period Nedcor improved its market share, as measured by total assets, to
19%.
Our general insurance operations produced an operating profit of GBP24
million, an increase of 4% over the GBP23 million of the prior year. Mutual
& Federal, our 51% owned subsidiary, produced an underwriting result of GBP1
million compared to a loss of GBP3 million last year. Special dividends of
GBP71 million, paid to shareholders in the last quarter of 2000, have
reduced Mutual & Federal's asset base from which long term investment
returns are generated.
Profit after tax and minority interest of GBP137 million (2000: GBP39
million) includes a positive impact of GBP94 million from short term
fluctuations in investment returns, offset by a write-down of Nedcor's
interest in Dimension Data (before minority interests) of GBP304 million and
goodwill amortisation of GBP69 million.
In April, the Group successfully launched a $650 million convertible bond
offer and was pleased with the level of demand for the issue, with proceeds
being used towards the refinancing of the UAM acquisition. In early July,
the Group secured a GBP900 million five year revolving credit facility,
which greatly enhances the Group's financial flexibility.
The Board has declared an interim dividend of 1.7p per share, an increase
of 6% on last year's interim dividend of 1.6p per share. This dividend will
be paid to shareholders on the register at the close of business on 19
October 2001 for all the exchanges where Old Mutual plc's shares are listed.
The shares will trade ex-dividend from the opening of business on 17 October
2001. The local currency equivalents of the proposed dividend for
shareholders on the South African, Malawi and Zimbabwe branch registers and
the Namibian section of the principal register will be determined using
exchange rates on 15 October 2001. The conversion rates will be announced
by the Company on 16 October 2001.
In July, I announced my intention to split my current role as Chairman
and Chief Executive. The Board has appointed Jim Sutcliffe as Chief
Executive of the Group with effect from 1 November 2001. Jim's extensive
experience and leadership skills will be key strengths as the Group
continues to drive shareholder value forward. I would like to take this
opportunity to wish him every success in his new role.
As announced last Friday, the Board has accepted the resignation of Eric
Anstee. I would like to thank Eric for the enormous contribution that he
has made to the Group. Scott Powers joined the Group on 1 September to run
our US asset management businesses, and Ed Warner has been promoted to Chief
Executive of Old Mutual Financial Services (UK). Both Scott and Ed will
report to Jim, who has now assumed Eric's responsibilities.
These results are positive against a background of declining
international equity markets and a further fall in the value of the Rand.
Our focus continues to be on delivering value from our recently acquired
international businesses, and our core South African operations, to build a
strong base for future growth.
MIKE LEVETT
Chairman and Chief Executive
4 September 2001
BUSINESS REVIEW
LIFE ASSURANCE
The underlying growth in operating profits before long term investment
return was strong at 19% in Rand terms (7% in Sterling terms). This growth
rate excludes investment of GBP9 million in developing our new businesses in
the US (Americom) and UK (due to launch later this year). Margins on
managed assets and the return on allocated capital remained strong at 2.3%
and 24% respectively. As part of our drive to improve capital efficiency,
we have used some $500 million previously allocated to the life business to
finance the purchase of UAM. This reduces the long term investment return
allocated to the life segment, and hence the associated operating profits.
New business profits of GBP27 million have increased 4% from GBP26
million last year. In Rand terms the new business profit has increased by
14%, principally due to the impact on Individual Business of changes to the
method of financing acquisition expenses at the end of 2000. Individual
Business volumes in South Africa were marginally up on last year, but Group
Business volumes were unusually low this year, reflecting the irregular
nature and size of their new business and price competition in Group Life
business. After a poor first quarter, new business levels have been
improving steadily, particularly in the Individual broker market.
The acquisition of Fidelity & Guaranty Life, which is expected to be
completed within the next two months, will strengthen our presence in the
growing US savings market, and represent another positive step forward, as
the Group builds its international presence. The deal will provide further
US fixed annuity distribution through managing general agents and complement
our Americom business, which started in May, which writes similar business
through direct telephone contact with independent financial advisers.
In May, our Indian life assurance joint venture, OM Kotak Mahindra,
opened for business in Mumbai and Calcutta, and it now has over 300 sales
agents operating from five branches.
South Africa
Life operating profits before long term investment return from South Africa
of R1,565 million have increased 12% from R1,395 million. The increase is
largely attributable to an increase in life assets, as a result of positive
equity and bond markets in South Africa.
The embedded value of in-force life business of R8,735 million has
increased by 9% from R7,988 million at the beginning of the year. This
increase is largely a result of growth in life assets and changes in
economic assumptions, partially offset by the anticipated effect of capital
gains tax on future profits.
Individual Business
Operating profits before long term investment return of R1,085 million have
increased 19% from R909 million. This principally reflects the increase in
life funds under management, but also increased mortality profits and
improved retention.
Total individual recurring new business premiums have remained flat. Our
recruitment of new personal financial advisers is progressing well and agent
productivity has improved. New business sales trends were better in the
second quarter after a disappointing first quarter. The retail distribution
relationship with Nedcor Personal Financial Planning is progressing well,
with sales increasing 90%. New single premiums have increased 7% in Rand
terms, reflecting the continued success of our Investment Frontiers product
range which dominates the individual single premium market, and attracted
inflows of R2,948 million during the period, compared to R2,761 million
during the equivalent period in the prior year.
Premiums written by our Group Schemes business have decreased by 8% in
Rand terms, mainly due to higher cancellation experience following the
increased use of debit orders. We expect this experience to reverse during
the third quarter following the re-opening of the South African Government's
Persal stop order collection system to new business.
The value added by new business of R210 million is more than double that
of R97 million added in the prior year comparative period. This increase
has arisen mostly through higher new business margins resulting from the
reduction in the cost of financing acquisition expenses achieved in the
second half of 2000.
Greenlight, an innovative and competitive range of individual pure
insurance products, was launched in May to complement our existing range of
investment products (Investment Frontiers, Investment Horizons and Essential
Savings) and sales have made a strong start. Investment Frontiers launched
a new range of offshore products for distribution to South Africans in
August, based on the use of an individual's offshore allowance of R750,000.
The Group intends to continue to build growth through product innovation,
high quality customer and intermediary service levels and distribution
through strategic alliance channels.
Group Business
Operating profits before long term investment return from our Group
Business, Employee Benefits, of R480 million are in line with last year's
strong first half performance of R486 million.
Single premiums of R1,587 million have decreased by 9% from R1,750
million last year. The single premium market consists of large potential
clients, so the timing of secured premium flows significantly affects
reported new business. Recurring new business premiums of R41 million were
significantly lower than the R214 million last year. The decline in
recurring new business premiums reflects a slowdown in the conversion of
defined contribution schemes to member-level investment choice with the
associated purchase of new investment products, and very aggressive
competitor pricing in the Group Assurance markets. We have chosen to
maintain the quality of our risk book. Total Group Business margins have
remained at 38% of annual premium equivalent.
A new range of structured products has recently been launched to cater
for those clients who want guarantees but do not wish to invest in smoothed
bonus products. A customised Platinum Pension product is being offered to
pension funds with very large pensioner liabilities. Our Orion Umbrella
Fund has been revamped and re-launched, and has started to produce an
improvement in sales.
Sales of new administration schemes are now actively being pursued to
secure associated investment and risk business, and investment clients from
whom we have not been receiving regular premiums have been identified and
are being targeted to convert to new products and reactivate premium flow.
Aggressive marketing of smoothed bonus products on the back of our
competitive June 2001 bonus declaration has recently commenced. The volume
of new business secured since 30 June, and the pipeline for the remainder of
the year, is encouraging.
Rest of the World
During the period we have made considerable progress in developing our
international life assurance businesses. As well as reaching agreement to
purchase Fidelity & Guaranty Life, the Group has invested in new operations
in the US, the UK and India during the period to provide a platform for
future growth. Operating profit strain from international development is
expected to increase as new business is written, although results are
expected to be positive on an embedded value basis.
Following the acquisition of Unified Life (renamed 'Americom') in the US,
the first two branches of Americom have been opened in Seattle and Los
Angeles. Americom distributes term and annuity products to brokers and will
over time offer universal life products. Americom currently offers life
products in 16 states with more than 1,000 agents. A roll-out programme is
in place for the remainder of the US.
Our 26% owned Indian joint venture operation, OM Kotak Mahindra, was
granted a licence to sell life assurance business following the relaxation
of controls in the Indian life market. During May, OM Kotak Mahindra opened
two branches in Calcutta and Mumbai and sold its first endowment and single
premium products. The encouraging start to sales in these locations has
been followed by the opening of an additional three branches, and we now
have an agent force exceeding 300.
In Pakistan, we have agreed to acquire (subject to regulatory approval)
CGNU's 51% stake in Commercial Union Life Assurance Company (Pakistan)
Limited, a company listed on the Karachi Stock Exchange.
FINANCIAL SERVICES
Operating profits for financial services of GBP90 million have increased
150% from GBP36 million. These results include a contribution of GBP64
million from the UAM Group (now collectively referred to as 'Old Mutual (US)
Holdings') and a full six month contribution from the Gerrard Group
businesses acquired in March 2000.
Market levels at 30 June had recovered from the troughs reached towards
the end of the first quarter and funds under management were at similar
levels to year end. In the US, we attracted positive net fund inflows from
our major asset managers. Gerrard, where changes in funds under management
largely reflected market movements, had a difficult half-year affected by
low market activity. Integration plans are proceeding in line with
expectations.
Asset Management
Old Mutual (US) Holdings
Operating profits from our US-based asset management operations of GBP64
million compares to the GBP44 million earned in the last three months of
2000. Fee income dropped some 10% in local currencies, with asset levels in
Pilgrim Baxter most affected by markets. Most of the asset decline in the
first half was the result of affiliate divestitures, with funds managed by
businesses retained at the end of the period of GBP116 billion up 2% when
compared to GBP113 billion at the beginning of the year.
Old Mutual (US) Holdings as a whole attracted more than $5 billion in new
mandates during the first half of 2001 and continues to perform well
compared with benchmarks and peers. At the end of June 2001, 28 out of the
Group's 60 Morningstar-rated funds held four or five stars, compared to 20
out of 60 funds at the end of 2000.
The diversity of the Group enabled it to benefit from the market shift
from growth products towards value products, as net outflows from growth
products began to reverse towards the end of the period. Net fund flows for
Old Mutual (US) Holdings were flat for the period, however Pilgrim Baxter
and the Old Mutual Asset Managers (US) Group of firms recorded positive net
inflows of GBP1.6 billion in total.
By the end of June we had completed the planned sales of Investment
Research Company, Cooke & Bieler and Sterling Capital Management. The sales
of Pell Rudman and Cambiar Investors were completed in early August. Since
acquisition we have divested eight affiliates, obtaining after-tax sale
proceeds of $255 million to date, which exceeds our expectations at
acquisition. We continue to work closely and co-operatively with the
remaining affiliates to establish optimal future business models.
In July the Group announced the appointment of Scott Powers as Chief
Executive of Old Mutual (US) Holdings as from 1 September. We welcome Scott
to Old Mutual and wish him every success in his new role.
Old Mutual Asset Managers (OMAM)
Operating profits from our South and southern African, Bermudan and United
Kingdom-based asset management operations of GBP14 million has decreased 50%
from GBP28 million last year. This was principally due to lower average
fund values within this Group, poor unit trust inflows in South Africa and
development expenditure incurred on our UK institutional business. We have
also experienced lower net fund inflows in South Africa.
Funds under management at the end of the period of GBP25 billion have
increased 5% from GBP24 billion at the beginning of the year, reflecting
increased South African market values over the period. Investment
performance remained very good across specialist mandates, with relative
peer performances improving in the period.
Old Mutual Asset Managers (UK) successfully launched the Old Mutual UK
Select Smaller Companies Fund during the period. This launch proved to be
one of the most successful retail fund launches so far this year, and
achieved the rare distinction of being awarded the 'AA' rating at launch by
independent fund analysts, Standard & Poors Fund Research. The Old Mutual
European Fund was relaunched during the period under a new manager, and
achieved a rating of 'A' from Standard & Poors Fund Research.
Old Mutual Unit Trust sales in South Africa were below prior period
levels, but are in line with South African industry results. We continue to
develop our product suite to serve the appetite of affluent South African
customers for offshore products, and in June launched a range of
international unit trusts, based on using the South African investor's
R750,000 allowance. As with the Investment Frontiers offshore range of
products, we integrated the capabilities of our Old Mutual International
business and our strong local brand and distribution teams in the affluent
South African market in order to ensure the success of the launch.
Private Client
Gerrard operating profits of GBP10 million (before integration costs of GBP6
million), have decreased 17% from GBP12 million, principally due to lower
commission levels, which fell 33% as a result of reduced equity market
activity. Market share was maintained however, and fee-based revenues were
resilient during the period.
Funds under management of GBP19 billion have decreased by 8% since the
beginning of the year, primarily as a result of adverse market performance.
The APCIMS balanced benchmark has fallen by 6%, and the FTSE 100 index has
fallen by 9%, over the same period.
The integration of the former Capel Cure Sharp and Greig Middleton
businesses is proceeding to plan, with the key implementation of the back
office systems currently being successfully undertaken. To date, eight
offices have successfully moved to new systems with the remainder
transferring in the third quarter. The roll-out of the Gerrard brand for
the combined businesses took place in March. Annualised cost savings in the
region of GBP15 million by 2003 continue to be anticipated, following a
total planned spend on integration of GBP25 million during 2000 and 2001.
Integration expenditure of GBP6 million was incurred in the first half of
2001,with the remaining GBP5 million anticipated later in the year.
Internationally, opportunities to expand our services and products
continue to be explored and developed, particularly within the Old Mutual
(US) Holdings Group and in South Africa.
Other Financial Services
Operating profits for the Group's specialist financial services businesses
of GBP8 million increased 33% from the GBP6 million in the prior year,
principally as a result of acquisition timing impacts.
Despite generally difficult market conditions, GNI Limited has produced
good results of GBP7 million for the period, more than double the three
month contribution in 2000. Results at GNI Fund Management have also
improved due mainly to performance fees earned on hedge products. In April,
we announced that we would be funding the development of Market Touch, a new
Electronic Crossing Network, designed specifically for retail client orders.
This venture underlines the importance of GNI's technology to the Group's
financial services businesses.
Old Mutual Securities has produced satisfactory results given the
decrease in market activity this year. Total revenues of GBP9 million are
on par with the equivalent prior year period, which benefited from much
higher activity levels. Commission based revenues have been under pressure
this year, while customer facilitation and corporate revenues remain robust,
and have increased by 15% over the equivalent prior year period. Our market
share of the small cap market continues to improve.
Old Mutual Specialised Finance has produced strong results with
performance this year benefiting from the introduction of new products in
addition to growth in existing offerings.
BANKING
Banking operating profits of GBP168 million increased 8% from GBP156
million. Banking results principally comprise those of Nedcor, our 53%
owned South African-based subsidiary, whose contribution to Group's
operating profit before minority interests, exceptional items and taxation
of GBP172 million has increased 7% from GBP161 million in the first half of
2000. Despite volatile market and economic conditions during the current
period, strong asset growth and continued tight cost control has enabled
Nedcor to report headline earnings of R1,485 million, an increase of 21%
from R1,230 million for the equivalent prior year period.
Nedcor also reported an increase in total assets of 31% to R173 billion
over the last 12 months, driven by strong organic growth in the core banking
business and also by acquisitions, notably FBC Fidelity Bank (now Peoples
Bank), Imperial Bank and, in conjunction with Old Mutual, Fleming Offshore
Banking. Excluding the effects of acquisitions and non-core items, total
asset growth was 15% in Rand terms. Market share has increased to 19%.
During the six month period net interest income grew by 14% to R2,604
million and non-interest revenue grew by 15% to R2,309 million. Nedcor's
cost to income ratio for the period of 51.9% compares favourably to that of
the prior year equivalent period of 52.1%. During the period expenditure
increased by 14% to R2,550 million, significantly influenced by the
acquisitions and start-up costs of the retail joint ventures which are
expected to deliver future growth opportunities. Excluding these items,
expenditure rose by 9%.
The diminution in value of Nedcor's investment in Dimension Data Holdings
plc of R3.5 billion before minority shareholders' interests has been treated
as an exceptional loss, consistent with the methodology applied to the
exceptional gain of R3.6 billion which arose in 2000.
Good progress was made in the period in the integration of the strategic
banking alliances with Capital One, Pick 'n Pay, Imperial Group and JD
Group. The joint ventures with Old Mutual continue to flourish, with the
retail joint venture poised for launch in the third quarter. Other
alliances are expected to break even this year and contribute to profits
next year. These strategic alliances give Nedcor access to millions of
potential new customers without incurring significant capital expenditure.
The effective application of technology by Nedcor continues to be
instrumental in driving down Nedcor's cost to income ratio. There are also
encouraging early indications that it may be possible to sell this expertise
to offshore customers.
GENERAL INSURANCE
Mutual & Federal, our 51% owned South African-based general insurance
subsidiary, has contributed GBP24 million to the Group's operating profits
before tax, including long term investment returns. This is a 4% increase
over the equivalent prior year period of GBP23 million.
The Group's underwriting result on a UK GAAP basis for the period was a
positive R11 million compared to a deficit of R31 million for the equivalent
prior year period, largely as a result of the corrective measures undertaken
on the motor account and lower claims incidence. The integration of the
recently acquired CGNU business has progressed well and is expected to be
complete by the end of the year. Trading conditions reflect the continuing
improvement in the underwriting cycle and there has been some evidence of
rates continuing to harden in many sectors of the industry.
Net premium income of R2,151 million increased by 55% from R1,387 million
in the first half of last year, largely as a result of acquired business.
Expense management continues to be a focus of Mutual & Federal, and expense
levels have been well contained during the current period. Solvency
margins, being the ratio of net assets to net premiums, remained high and
were in excess of 85% in Rand terms at the end of the period.
During the period the acquisition of the agricultural insurer,
Sentrasure, was finalised and Mutual & Federal now owns 100% of the company.
It is expected that this acquisition will enable the combined Group to
derive significant synergies and economies of scale to provide future
competitive advantage.
INDEPENDENT REVIEW BY KPMG AUDIT PLC TO OLD MUTUAL PLC
Introduction
We have been instructed by the company to review the financial information
set out on pages 12 to 33 and we have read the other information contained
in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein,
is the responsibility of, and has been approved by, the directors. The
directors are responsible for preparing the interim report in accordance
with the Listing Rules of the Financial Services Authority which require
that the accounting policies and presentation applied to the interim figures
should be consistent with those applied in preparing the preceding annual
accounts except where any changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom.
A review consists principally of making enquiries of group management and
applying analytical procedures to the financial information and underlying
financial data and, based thereon, assessing whether the accounting policies
and presentation have been consistently applied unless otherwise disclosed.
A review excludes audit procedures such as tests of controls and
verification of assets, liabilities and transactions. It is substantially
less in scope than an audit performed in accordance with United Kingdom
Auditing Standards and therefore provides a lower level of assurance than an
audit. Accordingly, we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material modifications
that should be made to the financial information as presented for the six
months ended 30 June 2001.
KPMG Audit Plc
Chartered Accountants
London
4 September 2001
Consolidated Profit and Loss Account
for the six months ended 30 June 2001
GBPm Rm
6 months 6 months Year 6 months 6 months Year
to to to to to to
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2001 2000 2000 2001 2000 2000
Operating profit
5a Life assurance 218 249 478 2,490 2,573 5,029
5b Financial services 90 36 124 1,027 372 1,305
5c Banking 168 156 327 1,918 1,610 3,440
5d General insurance 24 23 44 274 238 463
5e Other shareholders'
income / (expenses) (45) (7) (62) (514) (72) (652)
Operating profit
based on a long term
investment return
before goodwill
amortisation and
exceptional items 455 457 911 5,195 4,721 9,585
10 Goodwill
amortisation (69) (10) (54) (788) (103) (568)
6 Short term
fluctuations in
investment return 94 (282) (180) 1,073 (2,911) (1,894)
7 Exceptional items (304) - 356 (3,467) - 3,746
Profit on ordinary
activities
before tax 176 165 1,033 2,013 1,707 10,869
8 Tax on profit on
ordinary activities (107) (84) (186) (1,222) (868) (1,958)
Profit on ordinary
activities after tax 69 81 847 791 839 8,911
Minority interests 68 (42) (341) 777 (434) (3,588)
Profit on ordinary
activities after tax
and minority interests 137 39 506 1,568 405 5,323
4 Dividend proposed (59) (55) (163) (674) (569) (1,714)
Retained profit /
(loss) for period 78 (16) 343 894 (164) 3,609
Earnings per share p c
3 Basic earnings
per share 4.0 1.2 15.0 45.3 12.0 157.8
3 Diluted earnings
per share 3.9 1.2 14.9 44.5 11.9 156.6
3 Operating earnings
per share (based on a
long term investment
return before goodwill
amortisation and
exceptional items) 7.8 9.0 17.0 89.3 92.4 179.4
4 Dividend per share 1.7 1.6 4.7 19.4* 16.9 49.5
Weighted average
number of shares
- millions 3,457 3,365 3,373 3,457 3,365 3,373
* Indicative only - the actual amount of the dividend per share in Rand will
be determined by reference to the exchange rate prevailing on 15 October
2001 and announced by the Company on 16 October 2001.
Consolidated Statement of Total Recognised Gains and Losses
for the six months ended 30 June 2001
GBPm Rm
6 months 6 months Year 6 months 6 months Year
to to to to to to
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2001 2000 2000 2001 2000 2000
Profit for the period 137 39 506 1,568 405 5,323
Foreign exchange
movements (8) (136) (415) 77 (203) 477
Total recognised
gains/(losses) for
the period 129 (97) 91 1,645 202
5,800
Reconciliation of Movements in Consolidated Equity Shareholders' Funds
for the six months ended 30 June 2001
GBPm Rm
6 months 6 months Year 6 months 6 months
Year
to to to to to to
30 June 30 June 31 Dec 30 June 30 June 31
Dec
2001 2000 2000 2001 2000
2000
Total recognised
gains/(losses)
for the period 129 (97) 91 1,645 202
5,800
4 Dividend proposed (59) (55) (163) (674) (569)
(1,714)
70 (152) (72) 971 (367)
4,086
Issue of new capital
in respect of
re-equitisation of
Pilgrim Baxter &
Associates and
