Old Mutual posts best profit since 2019, divi underwhelms

The pan-African financial services group reported a 14% increase in adjusted headline earnings to ZAR 6.69bn (£284.99m), surpassing analyst expectations.

Headline earnings per share rose 17%, supported by a ZAR 1bn share repurchase program that reduced the number of outstanding shares.

Despite the strong performance, Old Mutual’s stock had been struggling recently, declining 9% since the start of 2025 and more than two-thirds since its demerger and listing in 2018.

The company’s leadership was also in transition, with chief executive officer Iain Williamson set to retire on 31 August after 32 years at the firm.

A search for his successor was ongoing.

Old Mutual said it was continuing its digital transformation, decommissioning 21 legacy systems and increasing digital users by 22% over the last year.

It said its digital retirement solution in South Africa processed over 275,000 claims in 2024, with 99% submitted via WhatsApp.

The company’s growth remained closely tied to economic conditions across its African markets.

In South Africa, improving investor confidence, a strengthening rand, and a coalition government between the African National Congress and the Democratic Alliance were contributing to a modest recovery.

However, high interest rates and weak consumer confidence still weigh on the firm’s retail business, while inflationary pressures persisted in other key markets such as Malawi.

Looking ahead, Old Mutual said it was planning to expand into banking with its OM Bank unit, expected to be fully operational by the fourth quarter of 2025 and reach breakeven by 2028.

The new bank would target affluent clients, placing Old Mutual in direct competition with some of Africa’s largest financial institutions.

The company also proposed a final dividend of 52 cents per share, bringing the total payout to 86 cents for the year, slightly below market expectations.

Reporting by Josh White for Sharecast.com.