South African risk and financial services firm Alexander Forbes posted a sharp rise in annual earnings on Monday thanks to a weak rand and good trading conditions and said it was ready for further global expansion.
Alexander Forbes said headline earnings per share — stripping out exceptional items and their tax effects — soared to 185 cents in the year to March 31, 2002, from 124,3 cents a year previously. Analysts had forecast a rise to around 175,2 cents.
The company said that excluding acquisitions and disposals, the underlying growth in revenue from operations was 24% and that core headline earnings, which exclude an unrealised currency gain, climbed 31% to 153,2 cents.
”This represents significant real growth given the low levels of inflation prevailing in our main markets,” said the company. Attributable headline profits jumped 51% to R640-million. The company benefited from a rise in the value of offshore earnings and an asset swap after the rand lost 37% of its value against the dollar at the end of the last year.
The world’s eighth-largest risk and financial services firm said it was well positioned for further international expansion, having integrated all the previous year’s acquisitions. The results were released before the market open. Its shares, which have outperformed the local financial services sector by around 12% in the year to date, closed at R16 on Friday.
But the group is still trading below what analysts see as fair value of around R17,75 as local investors continue to ignore its rand-hedge potential and overseas buyers are put off by its South African base. – Reuters