MMI’s growth strategy gains momentum

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MMI’s growth strategy gains momentum

Published Date: 2019-05-22 | Source: Stephen Gunnion | Author: Stephen Gunnion

MMI’s growth strategy gains momentum

The life assurer is 'cautiously confident' that it will meet its headline earnings target of R3.6 billion to R4 billion in 2021.

MMI says it's making good progress with the Reset and Grow strategy that was introduced after Hillie Meyer returned as CEO last year.

The three-year strategy is aimed at achieving sustainable and profitable growth. The life assurance group said it remained cautiously confident that it was on track to achieve its 2021 financial target of normalised headline earnings between R3.6 billion and R4 billion.

In an operational update, MMI said diluted normalised headline earnings per share (HEPS) rose 26% in the first nine months of its financial year relative to the prior period, marginally above expectations. However, it said the increase should be viewed in the context of poor results for the comparative period. Diluted normalised HEPS are the group's main measure of profitability. They were also boosted by a R2 billion share buy-back programme that was completed earlier this year. Normalised headline earnings rose by 19% to R2.4 billion for the nine-month period.

The group said earnings were mainly as a result of solid profitability in its Momentum Life business, the contribution from large corporate deals and improved group credit risk underwriting in Momentum Corporate. It also reported strong underwriting profits in Non-Life Insurance. These were offset by lower than expected asset-based fee income in Momentum Investments, weaker profit at Metropolitan Retail, and an increase in its share of losses in new initiatives.

The present value of new business premiums for the nine months was R40.6 billion, up 11% from the prior period. Group embedded value per share amounted to R27.41 at the end of March.

MMI said it was making progress with its plans to exit its operations in certain African countries.

Although normalised headline earnings for the current quarter were expected to be lower than the run-rate in the first nine months, it said full-year earnings should be in line with its 2019 targets.

Its shares rose 4.6% to R18.10 yesterday.





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