Subsid's Interim Results

OLD MUTUAL PLC 5 August 1999 The headline for the Old Mutual PLC - 'Interim Results, etc.' announcement released today should read 'Subsid's Interim Results'. The full text shown below remains unchanged. ---------------------------------------------------------------------------- OLD MUTUAL PLC Nedcor Interim Results Old Mutual is the largest Southern African life assurance and financial services group. Its shares were listed on the London, Johannesburg, Malawi, Namibia and Zimbabwe stock exchanges on 12th July 1999. Nedcor Limited, the South African banking group, in which Old Mutual plc ('Old Mutual') has a 53.3% holding, has today issued financial results for the six months ended 30th June 1999. The full text of the Nedcor announcement is attached. Commenting on Nedcor's results, Mike Levett, Chairman and CEO of Old Mutual, and a Director of Nedcor, said: 'These are excellent results from Nedcor. The benefits of the strategy of the Nedcor management team are reflected in the continuing strong performance of the company.' 5th August 1999 Further information is available on Nedcor's internet site: http: //www.nedcor.co.za Issued by: Investor Relations Old Mutual plc London Notes to Editors: The Board of Old Mutual plc currently expects to announce the interim results for the whole of the Old Mutual group for the period ended 30 June 1999 on Tuesday 7 September 1999. An announcement regarding the interim results of Old Mutual group associate-company, Mutual & Federal Insurance Company Limited, is expected on 18th August 1999. Nedcor Limited is separately quoted on the Johannesburg Stock Exchange and in addition has GDR's traded in London. Old Mutual consolidates the results of Nedcor in its own figures. As of June 30th 1999 the group had a stake equivalent to 53.3% of the common equity of Nedcor. Details of Nedcor's interim results presentation will be available on the corporate website at www:Nedcor.co.za. Nedcor Limited Interim results and capitalisation share award for the six months ended 30 June 1999 * Attributable income up 28% to R969 million * Earnings per share up 26% to 415 cents * Expense-to-income ratio 54,1% Nedcor Interim results and capitalisation share award for the six months ended 30 June 1999 Financial highlights Unaudited Proforma % 6 months 6 months 12 months change 30.6.99 30.6.98 31.12.98 Income statement Net operating income 22 1 251 1 026 2 430 before taxation (Rm Net income after 26 918 727 1 841 taxation (Rm) Income attributable to 28 969 759 1 900 shareholders (Rm) Earnings per share 26 415 330 822 (cents) Selected returns Return on average 20,6 20,1 23,3 shareholders' funds (%) Return on average total 1,60 1,48 1,74 assets (%) Non-interest revenue 42,9 45,6 45,0 (NIR) to total income (%) Expenses to total income 54,1 58,4 56,2 (%) Capital adequacy Shareholders' funds (Rm) 23 9 862 8 006 9 131 Total assets (Rm) 20 126 817 105 436 117 527 Risk-weighted assets 92 585 78 878 88 977 (Rm) Capital ratio (%) 11,0 10,5 10,8 Share statistics Share price (cents) 7 13 600 12 700 10 020 Number of shares in 2 235,1 230,8 232,7 issue (m) Weighted average number 2 233,9 230,2 231,2 of shares (m) Price-earnings ratio 15,0 17,5 12,2 (historical) Market capitalisation 9 32,0 29,3 23,3 (Rbn) Nedcor Interim results and capitalisation share award for the six months ended 30 June 1999 Consolidated income statement Unaudited Proforma 6 months 6 months 12 months % 30.6.99 30.6.98 31.12.98 change Rm Rm Rm Interest income 19 8 531 7 190 16 494 Interest expense 19 6 352 5 356 12 569 Net interest income 19 2 179 1 834 3 925 Non-interest revenue 6 1 636 1 537 3 211 Total income 13 3 815 3 371 7 136 Specific and general 33 501 378 698 provisions Net income 11 3 314 2 993 6 438 Expenses 6 2 063 1 967 4 008 Net operating income 22 1 251 1 026 2 430 before tax Add: Capital profit on 193 - - sale of NedTravel Less: Special general 193 - - provision supplement (net of tax) Net income before 22 1 251 1 026 2 430 taxation Taxation 11 333 299 589 Net income after 26 918 727 1 841 taxation Attributable earnings 57 51 32 59 of associates Income attributable to 28 969 759 1 900 shareholders Nedcor Interim results and capitalisation share award for the six months ended 30 June 1999 Consolidated Balance Sheet Unaudited Proforma 6 months 6 months 12 months % 30.6.99 30.6.98 31.12.98 change Rm Rm Rm Share capital 2 235 231 233 Reserves 24 9 627 7 775 8 898 Shareholders' funds 23 9 862 8 006 9 131 Long-term subordinated 61 572 355 583 debt instruments Deposit, current and 21 115 537 95 877 106 900 other accounts Liabilities under 846 1 198 913 acceptances Capital, reserves and 20 126 817 105 436 117 527 liabilities Assets Cash and short-term (50) 2 963 5 973 5 250 funds Other short-term 147 12 716 5 147 7 154 securities Government and public 91 6 086 3 182 4 023 sector securities Advances and other 15 100 057 86 874 96 483 accounts Customers' indebtedness 846 1 198 913 for acceptances Other investments 59 2 094 1 314 1 826 Fixed property 20 1 051 877 983 Equipment 15 1 004 871 895 Total assets 20 126 817 105 436 117 527 Confirmed letters of 2 367 3 037 2 798 credit and other Guarantees 5 675 4 920 5 826 Contingent liabilities 1 8 042 7 957 8 624 Nedcor Interim results and capitalisation share award for the six months ended 30 June 1999 Consolidated cash flow statement Unaudited Proforma 6 6 months 12 months months 30.6.99 30.6.98 31.12.98 Rm Rm Rm Cash flows from operating 1 508 1 517 3 329 activities Cash receipts from customers 10 115 8 697 19 613 Cash paid to customers, employees and suppliers (8 269) (7 207) (16 336) Dividends received 42 27 80 Dividends paid (380) - (28) Net increase in operating funds (3 622) (278) (2 066) Taxation paid (247) (424) (467) Net cash used in investing (71) (450) (1 169) activities Net cash provided by financing 145 36 51 activities Net increase in cash and short- (2 287) 401 (322) term funds Cash and short-term funds at 5 250 5 572 5 572 beginning of period Cash and short-term funds at end 5 963 5 973 5 250 of period Comparative figures are restated, where necessary, to afford a proper comparison. Percentages are calculated using actual numbers. Commentary on results The group again achieved excellent results, with attributable income for the six months increasing by 28% to R969 million (1998: R759 million). Earnings per share increased by 26%, resulting in a three-year compound annual growth rate of 25%. Average total assets showed satisfactory growth of 18%, while net interest income increased by 19%. These margins improved slightly to 3,72% (1998: 3,69%), reflecting improved money market conditions. These margins were, however, negatively affected by a doubling of interest reserved, which further reflects the concerning credit environment. While the level of real interest rates remains high, margins are lower than those of international peers. Non-interest revenue to total income at 43% (1998: 46%) is better than forecast and in line with the long-term target. Exchange and securities dealing profits continued to grow well. Total non- interest revenue reduced due to income from deconsolidated operations now being equity-accounted and the sale of NedTravel, which realised a capital profit of R193 million. The opportunity was taken to use this gain as a prudent supplement to the general provision. The aftermath of the high interest rates prevailing during the last 12 months continues to be in evidence and the charge for bad and doubtful debts increased by 33% to R501 million. Including interest reserved, the income statement charge for the six months amounts to R652 million, 44% worse than last year. Total provisioning to average advances stands at 3,2% (1998: 2,0%), appropriately conservative under current circumstances, and at 2,5%, including the special supplement to the general provision. Effective cost control efficiencies resulted in a 4,8% increase in expenses and in a 54,1% reduction (1998: 58,4%) the expense-income ratio. Should this trend continue, this ratio will be in the low 50s by year-end, which will position Nedcor favourably against international benchmarks. The effective tax rate decreased from 29,2% to 26,6% as a result of the 5% decrease in the corporate tax rate, partly offset by the release, in 1998, of certain non-recurring tax credits. Shareholders' funds now total R9,9 billion, with a capital adequacy ratio of 11,0% (1998: 10,5%). Return on equity increased to 20,6% (1998: 20,1%) on an equity base, which grew 23% over the period. Return on assets is 1,60% (1998: 1,48%). Operating companies 30.06.99 30.06.98 % Rm Rm increase Nedcor Bank, including group operations 685 524 31 Nedcor Investment Bank 250 208 20 Cape of Good Hope Bank 34 27 26 969 759 28 Nedcor Bank, contributing 70% (1998: 69%) of group income, had a particularly good half-year, especially in the Treasury, International and Corporate divisions. Nedcor Investment Bank's 20% increase in net income is based on the newly restructured business, while major reconfiguration costs have been set off against the bottom line. Cape of Good Hope Bank grew 26%, based on good asset growth, improved margins and the inclusion of associate income from recent investments in the property development sector. Year 2000 The year 2000 project, covering all the systems and channels of the group, has been completed. All backend applications, files and databases are now year 2000 compliant and the frontend branch roleout is nearing completion. Most workstations have had software upgrades or have been replaced with compliant machines. All applications are being tested for special dates and ongoing compliants. Nedcor Investment Bank Holdings Limited (NIBH) listing Nedcor Limited has offered 15% of its holding in NIB to Nedcor Limited shareholders in the ratio of 1 NIB share for each Nedcor share held at a subscription price of R4,30 per NIB share. The renounceable letters of allocation commenced trading on the Johannesburg Stock Exchange on 2 August 1999 and NIB will be listed on 26 August 1999. Prelisting documentation has been distributed to shareholders. Nedcor Limited will realise gross capital proceeds of R1 billion from the NIB listing. Prospects The ongoing interest rate reductions are welcome and, enhanced by the benefits of the recent Old Mutual demutualsiation and listing, we anticipate a positive effect on our client base. Stringent cost control remains a key focus. Major technological developments initiated in prior years have positioned the group well for future growth. These factors should contribute to the current positive results continuing for the remainder of the year. Nedcor's primary challenge is to continue to achieve business efficiencies and improved profitability, enabling investment for the future, which will result in extended client and product reach, improved client service and the expansion of our franchise into the new millennium. Capitalisation share award and cash dividend The directors have resolved to issue fully paid ordinary shares in the company as a capitalisation share award to ordinary shareholders registered in the books of the company at the close of business on Friday, 20 August 1999. Such shareholders will be entitled, in respect of all or part of their shareholding, to elect to receive instead a cash dividend of 128 cents per ordinary share ('the election'). New fully paid ordinary shares in the company will be issued only to those ordinary shareholders who do not elect in respect of all or part of their shareholding before 12:00 on Friday, 17 September 1999, to receive the aforementioned dividend. The number of capitalisation shares to which shareholders are entitled will be determined in the ratio that 128 cents per ordinary share multiplied by 1,05 bears to the weighted average price of Nedcor's ordinary shares on the Johannesburg Stock Exchange ('the JSE') for the four business days ending Thursday, 16 September 1999. Where entitlements to new Nedcor ordinary shares result in fractions of shares, these fractions will rank for a residual cash dividend. Documentation dealing with the capitalisation share award and election will be posted to shareholders on or about 27 August 1999. To be valid, completed election forms will need to be received by Nedcor's transfer secretaries by no later than 12:00 on Friday, 17 September 1999. Election forms in envelopes postmarked on or prior to Friday, 17 September 1999, will be accepted only if received by no later than 12:00 on Wednesday, 22 September 1999. Subject to the approval of the JSE, a listing for the new ordinary shares to be issued pursuant to the capitalisation share award will commence on Monday, 27 September 1999. It is expected that dividend cheques and share certificates will be posted to shareholders on or about Monday, 27 September 1999. A further announcement will be made on or about Monday, 27 September 1999, reporting on the result of the election. For and on behalf of the Board C F Liebenberg R C M Laubscher Chairman Chief Executive 6 August 1999 Registered office Transfer secretaries Nedcor Limited Mercantile Registrars Limited (Reg No 66/10630/06) 7th Floor 100 Main Street 11 Diagonal Street Johannesburg, 2001 Johannesburg, 2001 PO Box 1144, PO Box 1053, Johannesburg 2000 Johannesburg, 2000 Tel: (011) 370-5000 Directors: C F Liebenberg (Chairman); R J Goss (Deputy Chairman); R C M Laubscher (Chief Executive); C S Adcock; EEAnstee; G H Bulterman; P T W Curtis; Dr J de V Graaff; PGJoubert; Prof M M Katz; M J Levett; J B Magwaza; ME Mkwanazi; SGMorris (Financial Director); L M Ndlovu; C C Parker; A A Routledge (Executive Director: Strategic and Corporate Activities); AJTrahar; GSvan Niekerk; Dr W P Venter Company Secretary: GSNienaber
UK 100

Latest directors dealings