AForbes final results March 2019
Fee and commission income for the year grew to R4.058 billion (R3.981 billion) whilst operating profit lowered to R447 million (R674 million). Profit attributable to owners increased to R334 million (R240 million). In addition, headline earnings per share was recorded at 44 cents per share (44.4 cents per share).
Final and special dividend declaration
The board has declared a final gross cash dividend of 12 cents (9.6 cents net of dividend withholding tax) per ordinary share for the year ended 31 March 2019, bringing the total dividend declared for the year to 30 cents per share.
In addition, the board has declared a gross special cash dividend of 30 cents per ordinary share, thereby distributing the available cash to shareholders and reducing the surplus capital position. The group's strong cash performance and its desire to improve capital efficiencies is the basis for the board's decision to declare this special dividend.The special dividend is subject to approval by the Financial Surveillance Department of the South African Reserve Bank (SARB). A finalisation announcement confirming receipt of SARB approval will be released on SENS by no later than 9 July 2019.
Group Revised Strategy
In March 2019 we announced a revised strategy that refocuses the business on providing advice-led integrated retirement solutions and holistic wealth management. Our strategy is based on providing best advice for clients through an integrated approach. This requires a transition to a new operating model that will enable the 'one company, client-centric' approach through the integration of our different business lines. The new target operating model will include:
- one client-facing team, with divisional experts who are incentivised to deliver value to our clients and grow our top line;
- a hub for advice-led product development and enablement to ensure our relevance and to provide world-class advice for the South African context; and
- a joint platform for client support services, including fund and investments administration as well as shared services to drive efficiency, automation and innovation in the way that we service our clients.
We believe that this new way of operating will provide our clients with holistic best-in-class advice across a broader spectrum and in doing so will significantly enhance our value proposition. It will provide the opportunity to re-establish ourselves as the industry leaders, leverage our scale and simplify our processes. South Africa as our primary market will remain our core focus, and we will continue to service clients across Africa through the advice-led solution platform 'ARRIVE' in close collaboration with Mercer. There are no further plans for in-country investments in the rest of Africa and we are exiting sub-scale markets such as Uganda and Zambia.
In line with the revised strategy, we also announced our intention to exit both the short-term and life insurance (group risk) businesses. We have built solid and profitable operations in both of these businesses which are highly valued in the insurance market. The process to dispose of these separate businesses is under way and includes several regulatory approvals. Management aims to conclude these transactions by the end of FY2020. We continue to look for organic as well as inorganic growth opportunities in our core businesses. Our decision to adopt a capital-light model is key regarding the capital allocation and return hurdles that need to be met for us to pursue potential growth opportunities. With respect to potential acquisitions, we continue to explore and assess potential opportunities to acquire a similarly focused employee benefit business in support of our revised strategy.