Sanlam Group - Sanlam Trading Update - June 2004

Sanlam Group - Sanlam Trading Update - June 2004                                
Sanlam Group                                                                    
REGISTERED NAME: SANLAM LIMITED                                                 
(REGISTRATION NUMBER 1959/001562/06)                                            
JSE SHARE CODE: SLM                                                             
NSX SHARE CODE: SLA                                                             
ISIN number:    ZAE000028262                                                    
Sanlam Trading Update - June 2004                                               
Operating results                                                               
The group"s actions over the last year have started to flow through to results, 
with operating profit and earnings improving. Total new business inflows        
continued to grow during the four months to April 2004, although this growth is 
still substantially from lower margin non-Life business. The lack of growth in  
the SA Life business flows remains a focus.                                     
Earnings:                                                                       
The Group achieved sound operating results in the first four months of the year,
improving on the corresponding period for 2003 and exceeding profit targets in  
most of the major businesses.                                                   
To the end of April, net operating profit shows a material improvement on the   
first four months in 2003. Initial cost saving benefits are reflected in an     
improved contribution from Sanlam Life. Santam increased its relative           
contribution to the Group results as short term insurance underwriting remained 
at a cyclical high. Businesses in the investment cluster, as well as Sanlam     
Financial Services in the UK, achieved sound earnings growth. The implementation
of the Sanlam Capital Markets business model is on track.                       
Headline earnings for the four months are materially higher than for the first  
four months in 2003.                                                            
Business volumes:                                                               
The sustained increase in total new business flows during the four months to    
April is encouraging. Overall, new business inflows for the period were up by   
almost 50% on the same period in 2003. This growth is from a relatively low base
and the rate of growth is not expected to be maintained for the remainder of the
year. The major contribution to this growth came from investment fund inflows,  
as well as real growth in net short-term insurance premiums and new Group Life  
business.                                                                       
Net new business inflow for the four months of some R5bn is a continued         
improvement on the positive flows experienced in the second half of 2003 and    
strong turnaround on the net outflows experienced during the comparative period 
in 2003. The Life business experienced a significant reduction in outflows,     
however it still recorded a net outflow.                                        
The investment cluster businesses experienced a continued improvement in new    
business volume flows. New wholesale third party fund inflows of some R3bn were 
more than 60% up compared with the same period in 2003, while Sanlam Multi      
manager and Sanlam Private Investments more than doubled their inflows. New     
business volumes attracted by the UK investment consulting business exceeded    
R2bn for the four month period.                                                 
Total new Individual Life business volumes for the four months are 4% down on   
the same period in 2003. The continued volatility in equity and currency markets
during the period continued to negatively impact on client"s risk appetite for  
contractual investment. Demand for single premium investment linked Life        
business, in particular, including products that provide international currency 
exposure, remained low. Business inflows in Employee Benefits (`EB") are chunky 
in nature and the timing of inflows has a major impact on the reported business 
flows. New EB business for the four months to April is well ahead of that       
achieved in the corresponding period in 2003, but, although encouraging         
prospects are being pursued, it is unlikely that these will be concluded in time
to report growth in EB business in the half-year results. Margin improvement,   
due largely to the realisation of cost savings, contributed to the embedded     
value of new SA Life insurance business to date, which is well up from a        
relatively low base in 2003. This rate of growth is not expected to continue and
may at the half-year reporting stage, due to lower levels of new business, not  
be materially up on the R100m reported in 2003.                                 
Strategic Focus                                                                 
Sanlam continued to focus on the changing service and product needs of its      
clients, rightsizing the group to weather ongoing economic volatility and       
realising the opportunities open to the Group to deliver value to shareholders. 
The revitalisation of the Group"s Employee Benefits business is an important    
initiative in regaining lost ground in this important market. Capitalising on   
our strategic partnerships with both ABSA and Ubuntu-Botho is also a major focus
and the implementation of the necessary structures and processes to gain maximum
value from both is progressing well. The scaling down of Gensec Bank will be    
completed in early June 2004 with the return of its banking licence and the     
change of its name to Sanlam Capital Markets. Sanlam Life assumed operational   
control of the UK insurer, Merchant Investors Assurance (`MIA"), and initial    
results of the MIA operations are in line with expectations. The restructured   
actuarial and investment consulting business in the UK, Sanlam Financial        
Services, achieved satisfactory results for the year to date                    
Shareholders are advised that the results referred to in this trading update    
have not been reviewed by Sanlam"s auditors.                                    
02 June 2004                                                                    
Date: 03/06/2004 08:30:03 AM Supplied by www.sharenet.co.za                     
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