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One of South Africa’s oldest financial services group Old Mutual says it delivered a solid set of financial results, with growth in both sales and earnings in the first half of the year, despite the tough economic conditions.

Adjusted headline earnings per share advanced 70% to 63.4 cents per share, while results from operations (RFO) showed solid performance at R2.2 billion, growing 42% from the same period last year.

Old Mutual, celebrating 176 years in existence, declared an interim dividend of 25 cents per share, in line with its dividend policy.

Old Mutual CEO Iain Williamson said: “When I reflect on the first six months of this year, I am extremely proud of the progress that our efforts to rectify, simplify and amplify our underlying business have produced. These have enabled us to strengthen our position in the market, with continued progress towards becoming our customers’ first choice.”

The recovery in local and global equity markets positively impacted its asset base, resulting in closing Funds Under Management (FUM) of R1.2 trillion, 6% up from the end of December 2020. Higher average FUM levels drove higher asset-based fees for the period.

“We have made significant progress to amplify our customer and adviser experiences through digital offerings. We are on track to add the savings and income propositions in South Africa and Namibia alongside the OMP range utilising the same core infrastructure.

“We are embarking on initiatives to support growth adjacent to our traditional channels and markets and will actively partner with international and local players to explore opportunities relating to fintech, insurtech, transactional services, and value-added services,” Williamson said.

Old Mutual said its mortality experience has been worse than anticipated, with the impact on profits mitigated by a partial release of provisions raised at the end of 2020. The Covid-19 provisions have been increased by R2 billion as of 30 June 2021 to take into account the emerging expectations of waves 3 and 4 and potential future waves.

The provisions have been updated to take into account the additional available data to date and the anticipated impact of the proposed vaccination rollout plan, it said.

“We have revised our medium-term outlook based on this solid performance and remain optimistic of our ability to sustain this growth going forward.

“We have increased our results from operations target to deliver 2019 plus 5% to 10% by the end of 2023. We strive to achieve RoNAV of between Cost of Equity +2% and Cost of Equity +4%. We expect cost savings to be delivered from our South African insurance and savings businesses, allowing us to further our investment in innovation and other initiatives,” said Williamson.