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MMI HOLDINGS LIMITED - Trading Statement

Release Date: 25/08/2017 17:00
Code(s): MMI     PDF:  
Wrap Text
Trading Statement

MMI Holdings Limited
Incorporated in the Republic of South Africa
Registration Number: 2000/031756/06
JSE share code: MMI
NSX share code: MIM
ISIN: ZAE000149902
("MMI" or "the Company")

MMI Trading statement – 25 August 2017

Shareholders are advised that the diluted core headline earnings per share,
the group's main earnings measure to monitor the operational performance of
the group, are expected to change by between -5 and 5 percent relative to
the previous year. This equates to a range from 190cps to 210cps for F2017.
Diluted core headline were 200cps in F2016. The core headline earnings result
was impacted negatively by ongoing pressure on revenue growth due to weak
returns from investment markets over the past two years. Core headline
earnings also continue to be affected by weak underwriting experience on
group disability business. Persistency experience deteriorated in 4Q17 in
Metropolitan Retail compared to actuarial assumptions, whereas persistency
experience in Momentum Retail remained positive. Strong mortality profits
across the retail and corporate business and ongoing positive expense
variances aided core earnings. MMI remains adequately capitalised at 30 June
2017.

Shareholders are further advised that the group's basic earnings per share
are expected to decrease by between 20 and 30 percent (110cps and 96cps)
relative to 138cps for the comparative period. Headline earnings per share
are expected to show a decrease of between 5 and 15 percent (127cps and
114cps)   relative  to   134cps  for   the  comparative   period  results.

The difference between the expected decline in core headline earnings and in
headline earnings is largely driven by a significant (approximately R200m)
decline in the level of fair value gains earned on the shareholders'
investment portfolio. Foreign currency effects explain around half of the
decline in fair value gains. For basic earnings there is an additional impact
from impairment of intangibles (software and goodwill) which results in an
additional   negative   impact    on  earnings    of   approximately   R180m.

Note that MMI excludes fair value gains, impairment of intangibles, movement
in the value of MMI shares held in policyholder funds, investment variances
and non-recurring items from core headline earnings, whereas basic earnings
include all these items.

MMI will be releasing final results for the year ended 30 June 2017 on 6
September 2017.

The forecast financial information contained in this trading statement to
shareholders is based on information available at the time of publication
and has not been reviewed and reported on by the Company’s auditors.

Centurion

Sponsor:
Merrill Lynch South Africa (Pty) Ltd

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