Interim Results - Part 2
Old Mutual PLC
4 September 2001
PART 2
OLD MUTUAL plc
Results for the six months ended 30 June 2001 continued
Consolidated Profit and Loss Account
for the six months ended 30 June 2001
£m Rm
6 6 Year 6 months 6 months Year
months months
to 30 to 30 to 31 to 30 to 30 to 31
June June Dec June June Dec
2001 2000 2000 2001 2000 2000
Operating
profit
5a Life assurance 218 249 478 2,490 2,573 5,029
5b Financial 90 36 124 1,027 372 1,305
services
5c Banking 168 156 327 1,918 1,610 3,440
5d General 24 23 44 274 238 463
insurance
5e Other (45) (7) (62) (514) (72) (652)
shareholders'
income /
(expenses)
Operating 455 457 911 5,195 4,721 9,585
profit based
on a long term
investment
return before
goodwill
amortisation
and
exceptional
items
10 Goodwill (69) (10) (54) (788) (103) (568)
amortisation
6 Short term 94 (282) (180) 1,073 (2,911) (1,894)
fluctuations
in investment
return
7 Exceptional (304) - 356 (3,467) - 3,746
items
Profit on 176 165 1,033 2,013 1,707 10,869
ordinary
activities
before tax
8 Tax on profit (107) (84) (186) (1,222) (868) (1,958)
on ordinary
activities
Profit on 69 81 847 791 839 8,911
ordinary
activities
after tax
Minority 68 (42) (341) 777 (434) (3,588)
interests
Profit on 137 39 506 1,568 405 5,323
ordinary
activities
after tax and
minority
interests
4 Dividend (59) (55) (163) (674) (569) (1,714)
proposed
Retained 78 (16) 343 894 (164) 3,609
profit /
(loss) for
period
Earnings per p c
share
3 Basic earnings 4.0 1.2 15.0 45.3 12.0 157.8
per share
3 Diluted 3.9 1.2 14.9 44.5 11.9 156.6
earnings per
share
3 Operating 7.8 9.0 17.0 89.3 92.4 179.4
earnings per
share (based
on a long term
investment
return before
goodwill
amortisation
and
exceptional
items)
4 Dividend per 1.7 1.6 4.7 19.4* 16.9 49.5
share
Weighted 3,457 3,365 3,373 3,457 3,365 3,373
average number
of shares -
millions
* Indicative only - the actual amount of the dividend per share in Rand will
be determined by reference to the exchange rate prevailing on 15 October 2001
and announced by the Company on 16 October 2001.
Consolidated Statement of Total Recognised Gains and Losses
for the six months ended 30 June 2001
£m Rm
6 6 Year 6 6 Year
months months months months
to 30 to 30 to 31 to 30 to 30 to 31
June June Dec June June Dec
2001 2000 2000 2001 2000 2000
Profit for the 137 39 506 1,568 405 5,323
period
Foreign exchange (8) (136) (415) 77 (203) 477
movements
Total recognised 129 (97) 91 1,645 202 5,800
gains / (losses)
for the period
Reconciliation of Movements in Consolidated Equity Shareholders' Funds
for the six months ended 30 June 2001
£m Rm
6 6 Year 6 6 Year
months months months months
to 30 to 30 to 31 to 30 to 30 to 31
June June Dec June June Dec
2001 2000 2000 2001 2000 2000
Total recognised 129 (97) 91 1,645 202 5,800
gains / (losses)
for the period
4 Dividend proposed (59) (55) (163) (674) (569) (1,714)
70 (152) (72) 971 (367) 4,086
Issue of new - - 153 - - 1,691
capital in
respect of
re-equitisation
of Pilgrim
Baxter &
Associates and
employee share
option schemes
Proceeds from 4 - 24 46 - 253
sale of shares
previously held
to satisfy
claims and
errors on
demutualisation
and issue of new
shares
Net addition to 74 (152) 105 1,017 (367) 6,030
/ (reduction in)
equity
shareholders'
funds
Equity 3,618 3,513 3,513 40,937 34,907 34,907
shareholders'
funds at the
beginning of the
period
Equity 3,692 3,361 3,618 41,954 34,540 40,937
shareholders'
funds at the end
of the period
Consolidated Balance Sheet
At 30 June 2001
£m Rm
At At At At At At
30 June 31 Dec 30 June 30 June 31 Dec 30 June
2001 2000 2000 2001 2000 2000
Intangible
assets
10 Goodwill 2,379 2,279 634 27,034 25,786 6,515
Insurance and
other assets
Investments 17,265 16,004 16,585 196,189 181,083 170,440
Assets held 5,727 5,602 5,779 65,078 63,386 59,385
to cover
linked
liabilities
Reinsurers' 148 144 146 1,682 1,629 1,497
share of
technical
provisions
Debtors 9,552 3,890 3,967 108,543 44,014 40,767
Other assets 738 530 972 8,386 5,997 9,992
Cash at bank 573 458 440 6,511 5,182 4,524
and in hand
Prepayments 184 232 225 2,091 2,625 2,316
and accrued
income
Total 34,187 26,860 28,114 388,480 303,916 288,921
insurance and
other assets
Banking assets
Cash and 1,294 1,138 398 14,704 12,876 4,094
balances at
central banks
Treasury 619 657 7,385 7,034 7,433 75,894
bills and
other
eligible bills
Loans and 468 1,218 3,131 5,318 13,781 32,180
advances to
banks
Loans and 10,956 11,404 16,997 124,497 129,033 174,676
advances to
customers
Debt 620 924 748 7,045 10,455 7,691
securities
Equity 317 624 174 3,602 7,061 1,792
securities
Interest in 217 207 219 2,466 2,343 2,249
associated
undertakings
Other assets 398 742 313 4,523 8,395 3,217
Prepayments 417 373 189 4,739 4,220 1,941
and accrued
income
Total banking 15,306 17,287 29,554 173,928 195,597 303,734
assets
Total assets 51,872 46,426 58,302 589,442 525,299 599,170
£m Rm
At At At At At At
30 June 31 Dec June 30 June 31 Dec 30 June
2001 2000 2000 2001 2000 2000
Capital and
reserves
Called up 355 355 344 4,034 4,017 3,418
share capital
Share premium 512 511 868 5,818 5,782 8,625
account
Profit and 2,825 2,752 2,149 32,102 31,138 22,497
loss account
Equity 3,692 3,618 3,361 41,954 40,937 34,540
shareholders'
funds
Minority 904 1,013 874 10,273 11,458 8,984
interests
Subordinated 26 39 4 295 442 41
liabilities
Insurance and
other
liabilities
Technical 14,101 13,433 14,120 160,235 151,992 145,104
provisions
Technical 5,727 5,602 5,779 65,078 63,386 59,385
provisions
for linked
liabilities
Provisions 268 220 343 3,045 2,490 3,522
for other
risks and
charges
Creditors 11,703 5,646 5,464 132,986 63,883 56,188
11 Amounts owed 1,189 1,224 162 13,512 13,850 1,665
to credit
institutions
(including
convertible
bond)
Accruals and 212 230 85 2,409 2,602 868
deferred
income
Total 33,200 26,355 25,953 377,265 298,203 266,732
insurance and
other
liabilities
Banking
liabilities
Deposits by 1,708 1,873 9,271 19,409 21,193 95,276
banks
Customer 10,110 10,737 16,487 114,884 121,487 169,420
accounts
Debt 1,338 1,417 1,189 15,204 16,033 12,218
securities in
issue
Other 637 1,195 1,046 7,238 13,521 10,750
liabilities
Provision for 122 114 47 1,386 1,290 487
liabilities
and charges
Subordinated 135 65 70 1,534 735 722
liabilities
Total banking 14,050 15,401 28,110 159,655 174,259 288,873
liabilities
Total 51,872 46,426 58,302 589,442 525,299 599,170
liabilities
Consolidated Cash Flow Statement
for the six months ended 30 June 2001
£m Rm
6 months 6 Year 6 months 6 Year
months months
to 30 June to to 31 to 30 June to 30 to 31
30 Dec June Dec
June
2001 2000 2000 2001 2000 2000
Net cash 759 205 975 8,669 2,113 10,259
inflow from
operating
activities
Net cash (61) 8 (72) (697) 84 (753)
(outflow) /
inflow from
returns on
investments
and
servicing of
finance
Total (232) (42) (156) (2,650) (436) (1,642)
taxation paid
Net cash (57) (65) (295) (651) (674) (3,104)
outflow from
capital
expenditure
and
financial
investment
Net cash (124) (555) (1,718) (1,417) (5,727) (18,076)
outflow from
acquisitions
and disposals
Equity (108) (67) (122) (1,233) (694) (1,284)
dividend paid
Net cash 42 83 1,027 480 856 10,801
inflow from
financing
activities
Net cash 219 (433) (361) 2,501 (4,478) (3,799)
inflow /
(outflow) of
the Group
excluding
long term
business
Cash flows relating to insurance activities were invested as follows:
Increase in 38 64 142 434 660 1,494
cash holdings
Increase / 21 (162) (1,008) 240 (1,674) (10,605)
(decrease)
in net
portfolio
investments
59 (98) (866) 674 (1,014) (9,111)
Cash flows relating to banking activities were invested as follows:
Increase / 160 (335) 505 1,827 (3,464) 5,312
(decrease)
in cash and
balances at
central banks
Net cash 219 (433) (361) 2,501 (4,478) (3,799)
inflow /
(outflow) of
the Group
excluding
long term
business
Reconciliation
of
operating
profit to
operating
cash flow
Profit from 318 9 374 3,630 97 3,936
insurance
and other
activities
Profit from 162 156 303 1,850 1,610 3,187
banking
activities
Profit on 480 165 677 5,480 1,707 7,123
ordinary
activities
before tax
Unrealised 129 197 184 1,473 2,040 1,936
investment
losses
Insurance 44 108 (430) 503 1,104 (4,526)
and other
activities
non cash
flow items
Net cash 106 (265) 544 1,213 (2,738) 5,726
inflow /
(outflow)
from banking
activities
Net cash 759 205 975 8,669 2,113 10,259
flow from
operating
activities
The cash flows presented in this statement relate to shareholder and general
business transactions only.
Notes to the financial statements
for the six months ended 30 June 2001
1 Basis of preparation
The results for the six months to 30 June 2001 and the position at that date
have been prepared using accounting policies consistent with those used in
the Group 2000 Annual Report. These accounting policies are in accordance
with the Statement of Recommended Practice on 'Accounting for Insurance
Business' issued by the Association of British Insurers in December 1998
('ABI SORP').
The results for the six months ended 30 June 2001 and 2000 are unaudited, but
have been reviewed by the auditors whose report is presented on page 11. The
auditors have reported on the statutory accounts for the year ended 31
December 2000 and the accounts have been delivered to the Registrar of
Companies. The auditors' report in respect of the year ended 31 December 2000
was unqualified and did not contain a statement under section 237 (2) or (3)
of the UK Companies Act 1985.
These financial statements do not constitute statutory accounts as described
in section 240 of the UK Companies Act 1985.
2 Foreign currencies
The information contained in these financial statements is expressed in both
Sterling and South African Rand. This is in order both to meet the legal
requirements of Schedule 9A to the UK Companies Act 1985 and to provide the
users of the accounts in South Africa with illustrative information.
The principal exchange rates used to translate the operating results, assets
and liabilities of key foreign business segments to Sterling are presented
below.
R $
6 months 6 months Year 6 months 6 months Year
to 30 June to 30 June to 31 Dec to 30 to 30 to 31
June June Dec
2001 2000 2000 2001 2000 2000
Profit and 11.4211 10.3330 10.5213 1.4405 1.5693 1.5159
loss
account
(average
rate)
Balance 11.3634 10.2767 11.3148 1.4116 1.5159 1.4937
sheet
(closing
rate)
Notes to the financial statements continued
for the six months ended 30 June 2001
3 Earnings and earnings per share
Basic earnings per share are calculated based upon the profit attributable to
equity shareholders after the amortisation of goodwill arising on
acquisitions and exceptional items.
The directors view operating earnings per share, derived from operating
profit based on a long term investment return and before goodwill
amortisation, exceptional items relating to Dimension Data Holdings plc,
taxation and minority interests, as providing a better indication of the
underlying performance of the Group. A table reconciling profit on ordinary
activities after tax and minority interests to operating profit after tax is
included below.
£m Rm
6 months 6 months Year 6 months 6 months Year
to 30 to 30 to 31 to 30 to 30 to 31 Dec
June June Dec June June
2001 2000 2000 2001 2000 2000
Profit on 137 39 506 1,568 405 5,323
ordinary
activities
after tax and
minority
interests
Goodwill 65 10 42 746 103 442
amortisation
net of
minority
interests
Short term (87) 252 205 (997) 2,602 2,158
fluctuations
in investment
return net of
minority
interests
Exceptional 155 - (178) 1,765 - (1,873)
items net of
minority
interests
Operating 270 301 575 3,082 3,110 6,050
profit after
tax based on a
long term
investment
return before
goodwill
amortisation
and
exceptional
items
p c
Basic earnings 4.0 1.2 15.0 45.3 12.0 157.8
per share
Goodwill 1.9 0.3 1.2 21.6 3.1 13.1
amortisation
net of
minority
interests
Short term (2.5) 7.5 6.1 (28.8) 77.3 64.0
fluctuations
in investment
return net of
minority
interests
Exceptional 4.4 - (5.3) 51.2 - (55.5)
items net of
minority
interests
Operating 7.8 9.0 17.0 89.3 92.4 179.4
earnings per
share
At At At
30 June 31 Dec 30 June
2001 2000 2000
Shares in 3,552 3,551 3,444
issue -
millions
Basic earnings per share are calculated by reference to the profit on
ordinary activities after tax and minorities of £137 million (R1,568 million)
for the six months ended 30 June 2001 (June 2000: £39 million (R405 million);
December 2000: £506 million (R5,323 million)) and a weighted average number
of shares in issue of 3,457 million (June 2000: 3,365 million; December 2000:
3,373 million). This is calculated after taking into account purchases of
shares during the year by Employee Share Ownership Plans (ESOPs), which have
waived their rights to dividends.
The diluted earnings per share calculation reflects the impact of shares in
ESOP Trusts, which on vesting will have an anticipated dilutive effect of 27
million shares (June 2000: 22 million; December 2000: 26 million), and the
US$ Guaranteed Convertible Bond, which was not dilutive in the reported
period.
£m Rm
6 months 6 months Year 6 months 6 months Year
to 30 June to 30 to 31 to 30 to 30 to 31
June Dec June June Dec
4 Dividend 2001 2000 2000 2001 2000 2000
Interim 59 55 55 674 569 579
dividend
proposed /
paid: 1.7p
per 10p
share
(2000: 1.6p)
Final - - 108 - - 1,135
dividend
paid: n/a
(June 2000:
n/a;
December
2000: 3.1p)
59 55 163 674 569 1,714
Provision has been made in the Group financial statements for an interim
dividend of 1.7p per share calculated using the number of shares in issue at
30 June 2001 of 3,552 million less 99 million shares in Employee Share
Ownership Plans, which have waived their rights to dividends.
As a consequence of the exchange control arrangements in place in South
Africa and other relevant African territories, dividends to shareholders on
the branch registers in those countries (or in the case of Namibia, the
Namibian section of the principal register) are settled through Dividend
Access Trusts established for that purpose.
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