Old Mutual reports strong third quarter sales growth

Old Mutual has seen a strong growth in sales for the third quarter for the year.

The FTSE 100 investment firm posted results for the three months to 30 September on Wednesday.

Gross sales were up 31% on the same period in 2014 to £8.1bn, with a 45% increase in sales of its Old Mutual Wealth fund to £5.5bn.

That led to net client cash flows up £1.6bn excluding its non-US affiliate Rogge, driven by £2.3bn on cash flows for Old Mutual Wealth.

That was driven by its vertically integrated model and the acquisition of Quilter Cheviot.

However, Rogge reported outflows of £4.3bn for the quarter and with decreasing demand for global government bonds in a low yield environment, the company expects outflows may continue but possibly at a slower pace.

Total funds under management remained flat at £319.4bn after positive inflows from its successful funds were offset by a downturn in the market movements, outflows at Rogge and foreign exchange rates.

Finance director Ingrid Johnson said it’s been a good quarter for the group, especially Old Mutual Wealth.

"It benefited from its integrated strategy of owning distribution, an investment platform, discretionary fund and asset management as well as the recent changes to the UK pension regime.

“Old Mutual South Africa recorded strong sales growth of 28% and our Rest of Africa business grew sales by 32%.”
"Although we expect exchange rate movements to temper sterling reported growth and conditions for emerging markets to remain challenging, we are confident that if we continue to focus on meeting our customers' needs and improving operating efficiencies we can continue to deliver sustainable growth."

Shore Capital’s Eamonn Flanagan said it was a mixed bag of results.

“The key for us as to the investment case, is the ongoing success that Old Mutual has within the emerging African markets and within South Africa, which we remain bullish over, and its success with a vertically integrated approach in the UK, over which we remain unconvinced.”