Annual ReportPDF 6.1MB
Strategic ReportPDF 4.7MB
Performance SummaryPDF 483KB
Responsible Business ReportPDF 4.99MB
Q&A With Julian Roberts,
Group Chief Executive
Julian Roberts, Group Chief Executive answers candidly on the highlights of the past year and the key issues facing Old Mutual over the next 12 months.
Are you happy with the Group’s performance in the past 12 months?
Yes, very. Financially it was a strong year, with profits up 16% to £1.6 billion on a constant currency basis. Whilst Group profits were flat in reported currency, each of our businesses grew profits in their local currencies. We attracted £4.9 billion of net new money and our funds under management have risen to £319.4 billion.
We successfully listed our US asset management business on the NYSE and streamlined our European operations. We achieved all this while maintaining a focus on operational delivery and while making significant progress in delivering our strategy.
You have made some significant changes to your UK business over the past few years. What has been the reason for this?
Over the last several years a number of factors have combined to make the old life assurance and platform model redundant. At a macro level these include the emergence of the digital world, quantitative easing and the resulting low interest rates, but at a micro level there have been some profound regulatory changes.
We are building a business that is fit for the modern financial services regime and is able to take advantage of the large opportunity these changes bring.
You talk of the vertically integrated model in the UK. Is it working?
I am delighted with the progress the business has made, and yes the vertically integrated model is working importantly both for customers and for us. Restricted advisers in Intrinsic, the advice network we bought earlier in the year, are selling more through our Platform and in December their sales accounted for 10% of all Platform sales.
Pleasingly, 30% of net new money into Old Mutual Global Investors came via the Platform. We have just completed the acquisition of Quilter Cheviot, the discretionary fund manager, which is the final large piece of the integrated business model. So while we are clear we have a lot of work to do, the business is making good progress.
Are you happy with the progress you are making in building an African financial services champion?
Progress has been very pleasing. In South Africa, which is the cornerstone of our African strategy, our businesses are collaborating more than ever, as well as producing strong results. In East Africa, we have announced our intention to acquire a majority holding in UAP, a sizeable business which will provide us with the platform for us to expand in the region. In West Africa, we are looking to grow organically and have just launched a suite of new retail products in Nigeria and Ghana.
What are the big challenges for Old Mutual in 2015?
We have redeployed a significant amount of shareholder capital and we are absolutely clear that we need to integrate these businesses, continue to deliver operational improvements and create value from these investments.
Julian Roberts, Group Chief Executive
Net client cash flows for the Group were £4.9 billion, although excluding our non-US affiliate were £11.2 billion. Funds under management were up 9% to £319.4 billion. Profits grew strongly in the year up 16% in constant currency to £1.6 billion, flat in reported currency. Group return on equity at 13.3% was within our target range of 12-15%.
Net client cash flow (↓68%)
Adjusted operating profit (flat)
Return on Equity (↓30bps)
Of our investment capabilities applying to our Responsible Investment (RI) standard
Funds under management (↑9%)
Earnings per share (↓3%)
Dividend per share (↑7%)
Community Investment (↑6%)
From little things, bigger
things can grow
If a business is too small to interest a mainstream lender, how can it raise the funding it needs to grow? That’s the challenge Faulu, our Kenyan microfinance business, exists to overcome. Carolyne Chelegat, a typical customer, is a market trader selling peanuts. Faulu gave her six weeks’ business training and a series of affordable microloans.
These enabled her to increase her stocks and buy machines to make peanut flour – and now, peanut butter. Customers love the new products and business is good, enabling her to provide for her family and her community.
“Faulu has really boosted my business. Now I'm
Investing in a sustainable future
Old Mutual Investment Group is one of the leading local investors in the Department of Energy’s Renewable Energy Independent Power Producer Procurement, providing equity participation and debt funding to 14 wind and solar projects across South Africa.
With the ongoing energy supply constraints across the country, our participation in this programme not only brings capital to bear in addressing an important environmental issue, but also provides an appropriate risk-adjusted return for our investors.
“We invest in renewable energy and infrastructure across Africa to enable positive futures for our existing and future customers.”
Saving for the future
The 2-IN-ONE savings plan allows customers to save for their long-term goals (like paying for their children’s education) while having the flexibility to access some of the funds in the short term if they need it.
The need for this product was reinforced by the findings from the latest Old Mutual Savings and Investment Monitor, which indicated that consumers are experiencing immense financial pressure and that their savings have become a lot more short-term focused. This is exactly where the 2-IN-ONE savings plan comes into its own.
“The plan allows me to access money should I need it, without tapping into or penalising my long-term savings.” Sherry-Ann Abrahams, South Africa.”