Picture: REUTERS
Picture: REUTERS

SA’s second-largest insurer, Old Mutual, which is in the midst of a bruising public spat with former CEO Peter Moyo, said on Monday it will spend R2.4bn more in buying back its own “undervalued” shares.

A R2bn share repurchase in March and a further R500m buyback in May helped push up the company’s adjusted headline earnings per share (Heps) 10% in the six months to end-June, despite a 64% fall in after-tax profit for the period.

The company declared a 45c dividend per share for the period, unchanged from the prior comparative period, with the company reporting a free cash surplus of R3.7bn for the period, up 8% year on year.

Cash inflows from the sale of its Latin-American operations has helped boost the group’s financial position, with cash and cash equivalents rising to R34.3bn to end-June, from R32.3bn in the prior year.

Profit after tax decreased 64% to R5.9bn, with the fall due to the inclusion of the consolidated profits of Nedbank and Quilter, which were unbundled in 2018.

In happier times | Axed Old Mutual CEO Peter Moyo and chairman Trevor Manuel at the company’s listing on the JSE in 2018. Picture: FREDDY MAVUNDA
In happier times | Axed Old Mutual CEO Peter Moyo and chairman Trevor Manuel at the company’s listing on the JSE in 2018. Picture: FREDDY MAVUNDA

Baseline earnings per share fell 54% to 127.3c, while return on net asset value fell 0.6 percentage points to 16.4%.

Interim CEO Iain Williamson said on Monday the 10% rise in adjusted Heps demonstrates the resilience of its business, despite a challenging operating environment.

“We remain focused on streamlining our operations to deliver a superior customer service,” he said.

The company’s shareholders had approved a further R2.4bn in share buybacks in May, with Old Mutual saying the repurchasing would commence on Tuesday.

“The board believes that the share price is trading at a discount to its intrinsic value and is of the view that a share repurchase programme will deliver longer-term incremental value to shareholders,” the group’s statement reads.

The company’s share price and image has been battered by a highly public spat with Moyo, who has accused the group of violating the constitution in serving him a second termination notice in August.

This comes as the JSE-listed company waits for judgment on the legality of its first bid to dismiss him.

Moyo was first suspended on May 23, and since then its share price has lost 18%.

gernetzkyk@businesslive.co.za