Old Mutual Delivers Full-year Results And Outlines Search For A New CEO

The saga at Old Mutual continues with Reuters today reporting that interim CEO of the company Iain Williamson has outlined that the board likely wants to appoint a new chief executive within a few months. The company today announced its full-year results and that its full-year adjusted profit rose 7% versus the already flagged increase of up to 9%. This was attributed mainly to higher returns of invested capital due to an improved market.

The company’s shares, however, have dropped 8.5% following the stock sinking in 2019, which was at least partially linked to a very public tussle with former CEO, Peter Moyo, over his abrupt firing in June which followed a dispute over a conflict of interest.

The ongoing battle between Old Mutual and Moyo appeared to come to a close in January of this year when, after an initial series of legal victories by Moyo, his case was dismissed – a decision he is appealing. This win for the insurer was much needed as it has been criticized for its handling of the matter by some shareholders and customers which, according to Reuters, led to a dent in the reputation of this company. 

Discussing the impact of this public dispute with Moyo, Williamson said this had some impact on Old Mutual’s ability to win new business, as the brand’s image was hurt by association, but he noted that it is hard to isolate this incident from the much larger impact of a tough economy in South Africa.

Williamson said that a search for the new CEO is currently underway, but he deferred questions as to at what stage the process is at and did not specify a timeframe to the board.

“I suspect they would like it done in the next few months,” he said

Old Mutual’s results from operations - its measure of operating profit - fell 2%, versus a potential decline of as much as 5% flagged in a trading statement earlier in March. The insurer noted that the economic deterioration in its home market, which tipped into recession this year, and that many of its markets outside of South Africa also suffered.

Headline earnings per share is the main profit measure in South Africa and for Old Mutual, the adjusted headline earnings per share for the year to December 31 stood at 209.3 cents ($0.1283), versus 195.1 cents a year earlier.

The company adjusts its figures to account for factors including the break-up of its former conglomerate structure into four separate entities - a US asset manager, British wealth manager, African financial services division and a bank - that executives said would fare better alone.