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Financial results ahead of expectations:
- Pre-tax adjusted operating profit (AOP) of £2.0 billion up 22% (2016: £1.7 billion)
- IFRS pre-tax profit for continuing operations of £617 million up 102% (2016: £306 million)
- IFRS profit after tax attributable to equity holders of the parent of £909 million up 59% (2016: £570 million)
- AOP earnings per share (EPS) of 24.3p up 25% (FY 2016: 19.4p), basic EPS of 19.3p up 61% (2016: 12.0p)
- 2017 second interim dividend of 3.57p per share up 5%; Full year dividend of 7.10p per share up 17%
- Adjusted Net Asset Value (ANAV) per share at 242.3p (2016: 228.6p)
All businesses have performed well:
- Old Mutual Emerging Markets AOP R13.3 billion, up 5% (2016: R12.7 billion)
- Nedbank reported AOP of R16.5 billion, up 4% (2016: R15.9 billion)
- Old Mutual Wealth reported AOP £363 million, up 40% (2016: £260 million), (including £101 million of net performance fees from the single strategy business)
Update on standalone businesses:
OML has an ambition to become a premium financial services group in Sub-Saharan Africa. It currently offers a broad spectrum of financial solutions to retail and corporate customers across key market segments in 17 countries. It is well-positioned in South Africa, Africa's largest financial services market, and Southern Africa while having exposure to key growth markets in East and West Africa.
Targets (extracted from OML business outlook):
- Results from Operations to grow at a CAGR of Nominal GDP + 2% over the three years to 2020. Nominal GDP growth is defined with reference to South Africa
- Return on Net Asset Value of average cost of equity + 4%
- R1.0 billion of pre-tax run-rate cost savings by end 2019, net of costs to achieve this
- OML SAM ratio of 155-175% (post-Nedbank distribution); OMLAC(SA) SAM ratio greater than 200%; OMLAC(SA) Insurance business solvency ratio 180%-210%
- Dividend policy: targeting FY ordinary dividends that are covered by Adjusted Headline Earnings between 1.75 and 2.25 times.
A leading Wealth Manager in the UK and selected offshore markets, providing advice-led investment solutions and access to investment platforms to over 900,000 customers, principally in the affluent segment. At Quilter's core is a multi-channel wealth proposition and strong investment performance driving integrated flows and long-term adviser and customer relationships.
Targets (extracted from Quilter business outlook):
- NCCF (excluding Heritage) of 5% of opening AuMA per annum over the medium term
- Subject to delivery of currently expected AuMA volumes and business mix, Quilter's overall annual rate of revenue margin decline should slow in the near-term and the revenue margin should become increasingly stable
- Operating margin, before interest costs, of 30 per cent for the year ending 31 December 2020 before implementation of any future optimisation initiatives
- Dividend policy: targeting a dividend pay-out range of 40 to 60% of post-tax operating profit. The first dividend payment which Quilter will make as a separately listed company is expected to be the final dividend in respect of the year ending 31 December 2018.