Momentum Metropolitan makes good on its pledge


Momentum Metropolitan makes good on its pledge

Published Date: 2019-09-05 | Source: Stephen Gunnion | Author: Stephen Gunnion

Momentum Metropolitan makes good on its pledge

The insurance group says it remains committed to its three-year earnings target.

Momentum Metropolitan Holdings says it's making steady progress on the three-year Reset and Grow strategy it announced a year ago. The insurance group, previously called MMI Holdings, says the recovery plan has already had a positive effect on earnings.

It introduced the 'back to basics' plan in a bid to achieve sustainable, profitable growth under Hillie Meyer, who replaced Nicolaas Kruger as CEO in February 2018. It said its operating performance was supported over the year by expense management and good underwriting results. Momentum Corporate saw strong flows of new business from a range of clients, including good growth in recurring premium inflows for group insurance, as well as a number of large annuity deals in the first and fourth quarters. Momentum Investment's guaranteed products and the new Investo retirement annuity in Momentum Retail grew sales on safe-haven demand due to economic uncertainty. Momentum Metropolitan Africa recovered from negative to positive growth in the second half of the year.

For the year to end-June, the group grew diluted normalised headline earnings by 53% to R3.1 billion. However, finance director Risto Ketola said the big rise came off a low base the previous year when it was impacted by negative operating basis changes and investment variances. Excluding those from both years, growth came in at 21%.

Diluted normalised headline earnings per share increased by 61%, reflecting the impact of a share buyback programme. Present value of new business premiums increased by 12% from a year earlier, while value of new business improved by 57%.

After resuming dividend payments in March, after a hiatus during which it bought back R2 billion of its undervalued shares, it's paying a final dividend of 35c. On top of its interim payout, that takes its total dividend for the year to 70c.

Momentum Metropolitan said it remained committed to its target to generate profits of between R3.6 billion and R4 billion in its 2021 financial year.

Its shares rose 3.8% to R16.81 yesterday.

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