Alexander Forbes pays bigger dividend
The company has hit its cost-cutting targets two years early
Alexander Forbes reported a sharp drop in profit for its 2018 financial year, which was cast in an unflattering light by profits from disposals in its 2017 financial year.
The financial services group reported on Monday morning that net profit for the year to end-March was R327m — less than a fifth of the prior year’s R1.6bn.
Alexander Forbes’s 2017 financial year bottom line was bolstered by one-off profits from its £75.4m sale of Lane Clark & Peacock along with R753m from selling 10% of its African businesses outside SA to African Rainbow Capital.
The fund manager and insurance group declared a final dividend of 24c, taking the total for the 2018 financial year to 42c.
Excluding the 23c special dividend that it declared in 2017, to distribute some of the profits from its disposals to shareholders, its total dividend was 5% higher than the prior year’s 40c.
Monday’s results included a new structure in which Alexander Forbes splits itself into four divisions.
The largest is institutional clients, which grew operating income by 8% to R1.9bn and operating profit by 23% to R616m.
Its retail clients division grew operating income by 4% to R1.4bn, but operating profit remained flat at R507m.
Its emerging markets division grew operating income by 3.7% to R250m while operating profit declined 11% to R31m.
The administration division’s contribution to operating income declined 15% to R143m while its profit contribution remained zero.
"We delivered on our cost-efficiency targets two years ahead of plan, with cumulative cost savings of R308m versus our target set of between R200m to R250m by 2020," Alexander Forbes CEO Andrew Darfoor said in the results statement.