Unaudited interim results and dividend declaration
10/09/2025 07:00
RNS Number : 7555Y
Old Mutual Limited
10 September 2025
Old Mutual Limited
Incorporated in the Republic of South Africa
Registration number: 2017/235138/06
ISIN: ZAE000255360
LEI: 213800MON84ZWWPQCN47
JSE Share Code: OMU
JSE Alpha Code: OMLI
LSE Share Code: OMU
NSX Share Code: OMM
MSE Share Code: OMU
ZSE Share Code: OMU
("Old Mutual" or "Company" or "Group")
Ref: 27/25
10 September 2025
Unaudited interim results and interim dividend declaration for the six months ended 30 June 2025
Overview of results
The Group delivered adjusted headline earnings of R4.2 billion, uplifting return on net asset value to 15.5% amid sales and persistency pressures.
Our adjusted headline earnings growth of 29% was driven by strong underwriting performance in Old Mutual Insure and strong equity market performance, particularly in South Africa and Malawi.
The Board declared an interim dividend of 37 cents per share, reflecting an increase of 9%. Strong cash generation enabling a R3 billion share buyback reinforces our commitment to unlocking shareholder value.
Our Group equity value decreased to R18.40 per share due to a combination of business impacts and methodology changes. The Group's value of new business margin reduced to 1.3%, largely due to these changes.
Establishing strategic clarity
Strategic priorities have been sharpened with an emphasis on focused execution, optimising operational efficiencies and disciplined capital allocation to drive the achievement of a value accretive return on group equity value in the medium term. As part of our focus on shareholder value creation, we are pivoting to return on group equity value and cash generation as our value creation metrics. This shift enhances clarity and establishes a demonstrable link between strategic intent, execution and value creation.
We have set the following four Group strategic priorities, structured to unlock value in the short to medium term, while positioning the Group to generate growth over the medium to long term:
» Drive the competitiveness of the South African business
» Deepen market leadership in Southern Africa
» Establish the right to win for OM Bank
» Evaluate and pivot on growth markets
Performance overview
Results from operations increased by 16% primarily driven by exceptional growth in Old Mutual Insure and favourable market conditions. This growth was partially offset by the negative impact of a persistency basis change in Mass and Foundation Cluster and higher central costs, which includes a once-off restructuring provision incurred to reduce future expenditure.
Adjusted headline earnings grew by 29%, supported by an 88% increase in shareholder investment returns. The JSE All-Share Index returned 16.7% in the first half of 2025. Malawi faced elevated equity markets and heightened currency risk as a result of sustained inflationary pressures.
Return on net asset value was 15.5%, within the target range, supported by earnings and ongoing balance sheet optimisation. However, excluding higher than expected market returns, return on net asset value would have been below the target range.
IFRS profit and headline earnings declined, mainly reflecting reduced profits from the Zimbabwean business after the transition of its functional currency from Zimbabwe Gold to the United States dollar. The impact on net asset value was limited owing to lower currency translation losses reported in equity.
We saw muted sales growth with present value of new business premiums decreasing by 7%. Life APE sales increased by 1%, with higher retail risk volumes in Mass and Foundation Cluster and good sales in Old Mutual Africa Regions largely offset by lower guaranteed annuity sales in Personal Finance.
Gross flows grew by 7%, driven by good contributions from Wealth Management and Old Mutual Africa Regions, partially offset by lower inflows in Personal Finance.
Gross written premiums increased by 5% driven by good growth in Old Mutual Insure.
Our discretionary capital balance was R5.9 billion, supported by continued strong cash generation in our South African Life and Savings businesses and a solid contribution from Old Mutual Insure.
The Board has approved a share buyback of up to R3 billion subject to prevailing market conditions. The buyback will proceed while the share price reflects a level that is considered accretive to shareholder value.
Our balance sheet remained strong with a Group shareholder solvency ratio of 172%, within our target range of 155% to 185%. Old Mutual Life Assurance Company (South Africa) Limited's (OMLACSA) regulatory solvency ratio was robust at 187%, well within our target range of 165% to 200%.
The reduction in group equity value to R18.40 per share was driven by business impacts and methodology changes. Business impacts included an increase in Property and Casualty valuations following continued strong performance in Old Mutual Insure and a decrease in embedded value.
Total embedded value declined following high capital and dividend outflows of R7.7 billion and model and assumption changes of R3.7 billion. Assumption and model changes include adjustments for the non-hedgeable risk capital charge from 2% to 3.5% and the strengthening of persistency assumptions in Mass and Foundation Cluster. This was partially offset by positive economic variances due to good market returns, profitable new business written, repricing some of the investment business in Old Mutual Africa Regions as well as positive risk experience variances.
The Group's value of new business reduced by 50%, largely due to the assumption and model changes referenced above. This led to a reduction in the Group value of new business margin to 1.3%.
Group net underwriting margin increased by 270 bps to 7.1% primarily driven by the exceptional performance in Old Mutual Insure.
Group strategic priorities:
Unlocking value
Drive the competitiveness of the South African business
Our South African operations are integral to the Group, with strong market positions, extensive distribution reach and robust cash generation. To unlock further value, we are driving customer retention and growth in Retail Mass as well as market share and margin recovery in Personal Finance.
Recent operating model changes have simplified the organisation and created greater clarity and accountability through the value chain, with streamlined Group functions now supporting targeted and agile execution. This operating approach enables us to achieve cost leadership, optimise operational efficiencies and strengthen our position within a mature and highly competitive market.
Deepen market leadership in Southern Africa
We have long-standing presence in markets bordering South Africa, with strong brand equity and deep local insights. To deepen our market leadership in the region, we are focusing on scaling select markets, expanding our product offerings and capturing cross-border synergies. This approach builds on Southern Africa's significant contribution to the results from operations and the return on net asset value generated by Old Mutual Africa Regions.
Generating growth
Establish the right to win for OM Bank
OM Bank is leveraging our existing banking capabilities, which includes R1.5 billion in deposits and R15.5 billion in lending operations as well as our 346 branch network and FAIS-accredited in-branch advisor force. This allows us to expand current relationships with our mass-market customers while attracting new customers through a compelling banking proposition.
Evaluate and pivot on growth markets
As previously communicated, we have completed our exit from life and general insurance operations in Nigeria and Tanzania and have transitioned South Sudan into run-off. These actions underscore our commitment to concentrating resources on markets with the greatest potential for sustained long-term value creation. Future capital allocations will be targeted toward opportunities that align with our strategic priorities, taking cognisance of our goal of enhancing return on group equity value and return on net asset value to competitive levels in the medium term.
Outlook
Looking ahead, the combination of geopolitical headwinds and resilient market sentiment underpins a cautious but constructive outlook for the remainder of 2025.
Strategic priorities have been sharpened with an emphasis on focused execution, optimising operational efficiencies and disciplined capital allocation. Through improved competitive positioning, the Group will be well positioned to lift growth and market share going forward.
In order to restore our value of new business margin to an acceptable level, we have a strong resolve to drive expense efficiencies, supported by the operating model redesign and leaner corporate centre.
With strengthened strategic clarity, disciplined execution and a strong balance sheet, we are well positioned to create long-term value for shareholders.
Group highlights
Group key performance indicators
| Rm (unless otherwise stated) | H1 2025 | H1 2024 | FY 2024 | Change |
| Group equity value (1) | 86 723 | 89 761 | 92 460 | (6%) |
| Cash remitted from subsidiaries | 4 821 | 4 025 | 10 538 | 20% |
| Dividend cover (times) | 2.4 | 2.0 | 1.6 | 20% |
| Discretionary capital (Rbn) (1) | 5.9 | 1.4 | 3.1 | 90% |
| Return on net asset value (%) | 15.5% | 12.6% | 12.7% | 290 bps |
| Return on net asset value excluding OM Bank (%) | 18.7% | 14.8% | 15.2% | 390 bps |
| Shareholder solvency ratio (%) (1,2) | 172% | 188% | 182% | (1 000 bps) |
| Regulatory solvency ratio (%) (1,2) | 169% | 175% | 178% | (900 bps) |
| Results from operations | 4 940 | 4 243 | 8 709 | 16% |
| Adjusted headline earnings | 4 204 | 3 267 | 6 685 | 29% |
| Headline earnings (2) | 4 162 | 5 825 | 8 826 | (29%) |
| IFRS profit after tax attributable to equity holders of the parent (2) | 4 102 | 5 241 | 7 669 | (22%) |
| Cents | H1 2025 | H1 2024 | FY 2024 | Change |
| Results from operations per share (3) | 113.5 | 95.5 | 196.2 | 19% |
| Adjusted headline earnings per share (3) | 96.6 | 73.5 | 150.6 | 31% |
| Headline earnings per share (2) | 97.5 | 133.6 | 202.7 | (27%) |
| Basic earnings per share (2) | 96.1 | 120.2 | 176.2 | (20%) |
| Total dividend per share | 37 | 34 | 86 | 9% |
| Interim | 37 | 34 | 34 | 9% |
| Final | - | - | 52 | - |
| Group equity value per share (1,4) | 1 840.1 | 1 873.5 | 1 950.6 | (6%) |
| Rm (unless otherwise stated) | H1 2025 | H1 2024 | FY 2024 | Change |
| Life and Savings | ||||
| Embedded value (1) | 59 164 | 68 047 | 66 873 | (12%) |
| Contractual service margin (1) | 62 270 | 62 939 | 61 561 | 1% |
| Life APE sales (5) | 6 470 | 6 376 | 13 443 | 1% |
| Present value of new business premiums | 32 952 | 35 477 | 70 349 | (7%) |
| Value of new business | 432 | 858 | 1 758 | (50%) |
| Value of new business margin (%) | 1.3% | 2.4% | 2.5% | (110 bps) |
| Life and Savings and Asset Management | ||||
| Gross flows (5) | 106 759 | 99 940 | 213 620 | 7% |
| Net client cash flow (5) | (10 125) | (4 285) | (23 227) | (>100%) |
| Funds under management (Rbn) (1,5) | 1 504.0 | 1 381.7 | 1 446.9 | 4% |
| Banking and Lending | ||||
| Loans and advances (1) | 18 460 | 19 919 | 18 761 | (2%) |
| Net lending margin (%) | 12.1% | 8.3% | 9.6% | 380 bps |
| Property and Casualty | ||||
| Gross written premiums | 14 511 | 13 764 | 27 336 | 5% |
| Insurance revenue | 14 235 | 13 336 | 27 311 | 7% |
| Net underwriting margin (%) | 7.1% | 4.4% | 4.8% | 270 bps |
| JSE, MSE, NSX | ZSE | LSE | |
| Declaration date | Wednesday, 10 September 2025 | Wednesday, 10 September 2025 | Wednesday, 10 September 2025 |
| Transfers suspended between registers | Tuesday, 16 September 2025 | Tuesday, 16 September 2025 | Tuesday, 16 September 2025 |
| Finalisation announcement and exchange rates announced | Wednesday, 17 September 2025 | Wednesday, 17 September 2025 | Wednesday, 17 September 2025 |
| Last day to trade cum dividend for shareholders on the South African register and Malawi, Namibia and Zimbabwe branch registers | Tuesday, 30 September 2025 | Wednesday, 1 October 2025 | N/A |
| Ex-dividend date for shareholders on the South African register and Malawi, Namibia and Zimbabwe branch registers | Wednesday, 1 October 2025 | Thursday, 2 October 2025 | N/A |
| Last day to trade cum dividend for shareholders on the UK register | N/A | N/A | Wednesday, 1 October 2025 |
| Ex-dividend date for shareholders on the UK register | N/A | N/A | Thursday, 2 October 2025 |
| Record date (South African register and Malawi, Namibia and Zimbabwe branch registers) | Close of business on Friday, 3 October 2025 | Close of business on Friday, 3 October 2025 | N/A |
| Record date (UK register) | N/A | N/A | Friday, 3 October 2025 |
| Transfers between registers restart | Opening of business on Monday, 6 October 2025 | Opening of business on Monday, 6 October 2025 | Opening of business on Monday, 6 October 2025 |
| Interim dividend payment date | Monday, 6 October 2025 | Monday, 6 October 2025 | Monday, 3 November 2025 |