Conduit Capital turnaround efforts are bearing fruit

Insurance-focused investment holding company Conduit Capital expects a more than R60m improvement in its headline loss for its half year to end-December, partially due to a turnaround at its insurance subsidiary Constantia.

The group brought in a new management team at Constantia in February 2020, saying on Monday overall performance has.d improved since then, aided by decisions such as a 20% reduction in the workforce of that business.

Excluding one-off outflows, Constantia generated R167m in positive cash flows since the leadership change, and underwriting profitability increased R165m in the six months to end-December, Conduit said in a trading update on Monday.

Underwriting profitability refers to the amount remaining after claims.

Conduit expects an improvement in its headline loss per share to end-December of more than 20%, having generated R297.8m in headline earnings to end-December 2019. Headline earnings is a widely used profit measure in SA, excluding various one-off items to better reflect underlying performance.

In morning trade on Monday Conduit’s share was up 6.12% to 52c, though this is not an unusually large move for the group, which was valued at R398m on Monday morning.

Conduit’s share has risen by almost three-quarters so far in 2021, but has more than halved over the past twelve months.

Correction: January 18 2020

An earlier version of this article mistakenly said Conduit Capital would see an up to R60m improvement in headline earnings, when this should have been a more than R60m improvement

gernetzkyk@businesslive.co.za