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08 Feb 2008 10:23
Mutual & Federal’s full-year headline earnings per share fell 15,5% after underwriting earnings at the South African insurer declined, the group said on Friday.
Mutual & Federal, majority-owned by insurer Old Mutual, said headline EPS fell to 305 cents in the year to end December from 361 cents in the previous period and it forecast tougher times due to turmoil in global markets.
Gross premiums increased by 9% to R9,323-billion.
It said talks were still taking place between Old Mutual and investor group Royal Bafokeng Holdings over the sale of its stake in Mutual & Federal, which would delay the payment of dividends to shareholders.
“In terms of the pending offer from RBH, the purchase price payable will reduce by the amount of any dividend paid and the resultant tax charge,” it said in a statement.
“Shareholders who accept the offer will accordingly not benefit from the 7% escalation accruing in respect of the amount of such dividend ... the board therefore believes that it would not be in the interests of most shareholders to receive a dividend at this time.”
The short-term insurance firm said its net asset value per share stood at R12,55 at the end of December, down 6% from the previous year.
The company forecast slower growth for this year.
“As a result of the deterioration in prospects in the world economy in 2008, equity markets are expected to be exceptionally volatile during 2008 and the strong growth experienced during 2007 is unlikely to be repeated during 2008,” it said.
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