Alexforbes expects full-year earnings to rise more than 20%

Financial services group Alexforbes expects its full-year headline earnings from continuing operations to be as much as 20% higher, it said on Tuesday.

Headline earnings per share (HEPS) for continuing operations for the year to end-March are expected to be 50.1c-54.6c, compared with 45.5c a year ago.

HEPS for total operations are expected to be 23%-33% higher at 58.7c to 63.4c.

The group said in a statement that it had performed well and in line with expectations.

The results delivered from continuing operations reflected “solid growth” in operating income owing to acquisitions and new business, with expense growth influenced by its investment in capacity, acquisitions, and the effect of the International Financial Reporting Standards (IFRS) lease adjustment in the previous year, it said.

It recognised an impairment of goodwill and associated intangible assets that differentiated basic earnings from headline earnings in continuing operations for the current year.

The expected increase in headline earnings from total operations was attributable to the financial performance of the discontinued operations, it said.

The results from discontinued operations in the current year benefited from the effect of the close-out of all insurance liabilities and assets relating to the sale and transfer of the AF Life business to Sanlam Life.

The business has finalised and transferred all policyholder claims and reinsurance arrangements to Sanlam, aligned with the original sale transaction, and released the remaining reserves in expectation of deregistration.

In the previous year, the financial performance of discontinued operations included the profit on ales that the group recognised on the disposal of AFICA, the group’s individual client administration business. The profit on sale is, however, excluded from the calculation of HEPS.

Business Day reported in April that Alexforbes had thrown its hat into the growing discretionary fund management (DFM) ring, after indicating its intention to make a play for the R500bn market five months ago.

The group, headed by Dawie de Villiers, announced plans to launch Investment Solutions by Alexforbes, as it looks to up the ante in the independent financial adviser (IFA) market, a space in which it has been increasing its workforce.

De Villiers said DFMs had gained prominence, managing about R500bn in investments over the past decade, with further growth in the sector pencilled in for the years ahead.

It also completed a deal to buy Outvest from Outsurance, with integration of the business into the group under way.

The acquisition of Outvest allows it to serve customers across a wider range of investment needs.

Shares in Alexforbes rose 1.54% to R6.60 on Tuesday, giving it a market cap of R8.8bn.

mackenziej@arena.africa