Wrap Text
Extract of unaudited interim results and cash dividend declaration for the six months ended 30 Sept 2019
ALEXANDER FORBES GROUP HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2006/025226/06)
JSE Share Code: AFH ISIN: ZAE000191516
("Alexander Forbes" or "the company" or "group")
EXTRACT OF UNAUDITED INTERIM RESULTS ANNOUNCEMENT AND CASH DIVIDEND DECLARATION
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2019
Financial highlights
Unaudited six months ended
30 September
2019/2018
In millions of South African rands (Rm) % change 2019 2018(A) 2017(A)
Continuing operations
Operating income(B) 1 1 588 1 571 1 459
Profit from operations (before non-trading and capital items) 3 403 391 411
Cost-to-income ratio(C) (50) bps 74.6 75.1 71.8
Profit for the period na 250 53 242
Cash generated from operations 1 489 485 471
Basic earnings per share (cents) na 17.5 2.8 15.9
Headline earnings per share (cents) 33 17.8 13.4 15.5
Closing AuA and AuM (in billions of South African rands) (7) 344 371 363
Total operations
Basic earnings/(loss) per share (cents) na 24.2 (3.5) 21.7
Headline earnings per share (cents) 42 24.5 17.3 21.3
Normalised headline earnings per share (cents) 43 27.2 19.0 25.6
Interim dividend (cents) - 18 18 18
(A) Prior-year numbers restated for the effects of discontinued operations and IFRS 16 Leases.
Refer to notes 2 and 9 of the condensed consolidated financial statements in the long form announcement
(B) Operating income represents revenue net of direct expenses (throughout)
(C) Cost-to-income ratio is a percentage of the operating expenses (before non-trading and capital items) over
operating income
Chief executive officer, Dawie de Villiers, commented: 'We continue to work with determination to implement
our strategy of simplifying our business, improving our product offering to our clients and ensuring that we
deliver best advice and measurable benefits to them. We are pleased with the progress made to date and we are
confident that through our new integrated value proposition, our clients will benefit positively from our best
advice. And it will also reflect favourably in the quality of our earnings and the performance of our business
in the longer term.'
Overview of financial results
Alexander Forbes is pleased to report the financial results for the six months ended 30 September 2019 which
clearly shows early signs that our strategic initiatives are starting to bear fruit. Whilst our clients are
experiencing the benefits of our client-centric and advice-led consulting approach, the top-line benefits will
take some time to fully materialise. Our continued engagement of our clients and our employees has resulted in
good client retention and some notable new client wins against a worsening macro-economic environment. We are
pleased with the progress made through brisk but disciplined execution of our strategic agenda and remain
confident of this approach and its benefits to clients and shareholders.
- Strategic initiatives on track:
- We are advanced in our journey to provide an integrated service model to our clients, leveraging our
expertise in retirements benefits, investments, healthcare and individual financial planning - thereby
retaining and stabilising our client base
- New operating model on track for full implementation
- We have strengthened our employee engagement interventions and improved our culture, which is refocused
on ONE Alexander Forbes
- Our capital light strategy is well under way with the disposal of the South African short-term insurance
business expected to conclude early in 2020
- Good progress made in the roll-out and delivery of default retirement solutions, showing measurable
benefits to our clients
- Simplifying and rationalising our product offering
- Notable traction gained in our ARRIVE service offering to multinational clients in Africa through our
collaboration with Mercer
- Operating income from continuing operations up 1% to R1 588 million
- Profit from continuing operations (before non-trading and capital items) up 3% to R403 million, which
reflects good expense management
- Headline earnings per share, for the total group, up 42% to 24.5 cents
- Cash generated from continuing operations remains strong at R489 million
- Interim dividend of 18 cents per share declared
- Assets under administration (AuA) and Assets under management (AuM) of R344 billion, down 7% year on year,
largely owing to client losses during the second half of the previous financial year. Good progress in the
current period, with AuA and AuM up R2 billion from 31 March 2019.
The disciplined execution of our strategic initiatives together with our new operating model, that
simplifies and focuses our business, will better position Alexander Forbes for the economic period
anticipated over the next three to five years. The successful implementation of key enablers over the
past six months is already a major step change with an increasingly visible impact in our day-to-day
operations.
Cumulatively, we believe that our strategy and the new way of operating will provide our clients with
holistic best-in-class advice across a broader spectrum and will significantly enhance our integrated value
proposition. It will provide the impetus to continue to lead the industry, leverage our scale and simplify
our processes.
Interim dividend declaration
An interim dividend declaration has been considered by the board which takes into account the group's
dividend policy, current and projected regulatory position, the available cash in the group as well as the
cash-generative nature of the group.
The board has declared an interim gross cash dividend of 18 cents (14.4 cents net of dividend withholding
tax) per ordinary share for the six months ended 30 September 2019. A dividend withholding tax of 20% will
be applicable to all shareholders who are not exempt.
The issued number of shares at the date of declaration is 1 287 858 154. The dividend has been declared
from income reserves of the company.
The salient dates for the dividend will be as follows:
Last day of trade to receive a dividend: Tuesday, 7 January 2020
Shares commence trading 'ex' dividend: Wednesday, 8 January 2020
Record date: Friday, 10 January 2020
Payment date: Monday, 13 January 2020
Share certificates may not be dematerialised or rematerialised between Wednesday, 8 January 2020
and Friday, 10 January 2020, both days inclusive.
For further information
This short form announcement is the responsibility of the directors. Shareholders are advised that this
short form announcement represents a summary of the information contained in the full long form
announcement and does not contain full details.
The full long form announcement is published and available at:
https://senspdf.jse.co.za/documents/2019/JSE/ISSE/AFH/AFHDec2019.pdf
The full announcement is also available on the company’s website:
https://www.alexanderforbes.co.za/investorrelations/financial-results/interim-results
Electronic copies of the full announcement may be requested by emailing: InvestorRelations@aforbes.com
Any investment decisions by investors and/or shareholders should be based on a consideration of the full
announcement as a whole and investors and/or shareholders are encouraged to review the full announcement, which
is available as set out above. Any financial information contained in this short form announcement and the full
long form announcement that may be construed as forecast information has not been reviewed or reported on by
the group's external auditors.
On behalf of the board of directors
N Nyembezi DJ de Villiers
Non-executive chair Chief executive officer
9 December 2019
Sandton
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 09-12-2019 08:00:00
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