Alexforbes’s shareholders were treated to a final dividend that was 11% higher at 30 cents per share, as well as a special dividend of 60 cents for the year to March 31, due to strong cash performance, improved capital efficiencies and execution of strategy.
Shareholders appeared pleased, as the share price increased substantially from 7.19% to R7.19 by midday yesterday on the JSE. The share price was 33% higher over a year. The special dividend meant a further R778 million in cash was being distributed to shareholders, reducing the surplus capital position of the group.
Commenting on the financial services group’s annual results, CEO Dawie de Villiers said they had set out to transform the business and the disciplined execution, consistent delivery over time, capacity building and progress towards their ambition as a group had been pleasing.
He said they were also pleased with the integration and performance of the six businesses acquired over three years, most recently OUTvest and TSA Administration. These businesses had added R243m to operating income and contributed R67m to profit from operations, notwithstanding an impairment of goodwill and intangible assets relating to EBS International.
Group operating income had increased 12% to R3.91bn and headline earnings per share was up 29% to 61.5 cents.
Operating expenses of R3.18bn increased 16%, with the rise in business-as-usual expenses in line with announced plans to invest in capacity.
Operating expenses also included the effect of the one-off lease adjustment from the prior year, reduced cost recovery from discontinued operations and an increase in expense from acquisitions. The cost-to-income ratio was held at 79.5.
Total closing assets under management and administration increased 16% to R525bn. The growth across various metrics resulted from execution of the strategy, new business wins, the implementation of acquisitions and the positive market performance in the current year, De Villiers said.
Alexforbes’s flagship portfolio Performer had delivered a consistent and competitive performance, he said.
Performer’s closing assets under management increased 12% year-on-year to R232bn. It ranked in the first quartile of the Alexforbes Manager Watch Survey over a five-year period, and was well positioned in the volatile markets to continue to achieve superior returns on a risk-adjusted basis, said De Villiers.
He said Alexforbes had been gearing itself towards implementation of the two-pot retirement system that directly impacts its administration system capabilities, digital suite and engagement with members on an unprecedented scale.
The company regarded this as an opportunity to connect with, engage and educate members about their options and the long-term value of their retirement fund investments.
In doing so Alexforbes believed that it could build relationships with members that would result in the opportunity to provide the best advice.
The company had launched the Alexforbes Impact Advisory to extend its environmental, social and governance and sustainability-focused advice to retirement funds and corporates in South Africa.
This service also included access to the Alexforbes Impact Academy, which provides related training to stakeholders.
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