Alexander Forbes Group Holdings lifted operating income a robust 12% to R2.14 billion in the six months to September 30, driven by higher assets under management (AUM), consolidation of acquisitions, inflationary increases on products, and higher than expected two-pot pension claims volumes.
The financial services company said yesterday the “robust results” were due to higher average AUM following positive market performance, inflationary increases within the retirement and healthcare consultancy client base, and high client retention.
An interim cash dividend of 22 cents a share was declared, up 10% from the dividend in 2023 of 20 cents per share. The share price traded 1.76% higher to R7.53 by yesterday afternoon, a level where it had gained 48.5% over 12 months.
The directors sad that to date, the company had paid over 97% of all two-pot claims, despite early challenges related to volumes, with 99% of these claims settled within the company’s service level commitments of 20 business days.
Operating expenses increased 11% to R1.72bn, reflecting expenses from fully consolidated acquisitions, higher personnel and technology costs, as well as increased two-pot related expenditure. Organic expense growth was 8%.
Profit from operations increased 13% to R447 million. Profit from continuing operations improved 8% to R367m after accounting for the increase in finance costs and a marginally higher effective tax rate for the period.
Headline earnings a share from total operations increased 3% to 28.4 cents. Balance sheet strength was supported by cash flow from continuing operations, a sound regulatory surplus capital position of R957m and available cash of R657m.
CEO since 2018, Dawie de Villiers said that they had played a leading role in advocating for and shaping the two-pot system, which aims to transform retirement outcomes for all members.
“It has been the focal point of our organisation over this period as we built up to 1 September by gearing up operations, member engagement, and our digital infrastructure. There have been lessons for us on this journey, we continue to scale up technological capabilities to serve our 1.1 million members,” he said.
“We are uniquely placed at the intersection of regulatory shift, employee benefits, and retail,” he added.
De Villiers said their purpose was to pioneer insight to deliver advice and solutions that impacted people’s lives.
“Our prospects are anchored in our ability to do so,” De Villiers said.
Invest in digital infrastructure to facilitate easier access for members to their information, receive appropriate advice at decision points, and transact with confidence, would continue.
“Connecting with members in this manner helps to promote the Alexforbes brand and value proposition to a broader membership base at a scale previously inaccessible to them,” he said.
The Alexforbes retail transformation gathered momentum with the entrance into the discretionary fund management market through the launch of Investment Solutions by Alexforbes, the capacitation of an independent financial adviser-focused team, the integration of Alexforbes Invest into the advice process, and the implementation of digital exits across most of the client base.
BUSINESS REPORT