... a very strong improvement in results compared to the prior
year... AOP earnings per share were 16.0p and return on equity grew
to 12.2%..."
Philip Broadley
Group Finance Director
During the year to 31 December 2010 ("the year") Old Mutual
showed a very strong improvement in results compared to the prior
year. Adjusted Operating Profit (AOP) earnings per share were 16.0p
for 2010 compared to 11.6p for 2009. This was driven by improved
operational performance across the Group and positive currency
movements. Funds under management (core and continuing businesses)
grew by 12% compared to the prior year, largely due to improved
market conditions. Return on equity grew to 12.2%, primarily as a
result of improved margins and favourable foreign exchange
movements.
IFRS AOP on a pre-tax basis of £1,481 million for the year was
£348 million higher than in the prior year. This was made up of
£181 million (52%) due to improvement in trading results, and £167
million (48%) from the positive benefit of currency movements. On a
constant currency basis, the AOP for 2009 was £1,300 million.
Strong growth in new business sales, lower credit losses in
banking, a close focus on overall cost control, improved
persistency and higher profits in our general insurance business
drove the underlying performance.
Net client cash flows (NCCF) doubled in LTS to £5 billion, and
were positive in all our European businesses and in our Retail
South African businesses. This was offset by outflows in the
Corporate and OMIGSA businesses in South Africa, and in certain
affiliates of USAM. The NCCF contribution from Wealth Management
was particularly strong, increasing by 56% to £3.9 billion largely
from the UK Platform and Italy.
Funds under management increased to £309 billion (core and
continuing businesses) although there were periods of substantial
market movements in the year. Across all our principal equity
markets, second quarter falls more than eclipsed first quarter
rises. Markets steadily rose from August onwards, all recording
their 2010 highs in the last week of the year. The JSE All Share
index rose by 16% in the year, the FTSE rose by 9%, the S&P-500
by 13% and the Swedish SAX:OMX by 23%.
Finance directors from around the group
Management Discussion and Analysis of Results for 2010
The principal businesses of the Group are the LTS division,
Nedbank, Mutual & Federal and US Asset Management. During the
period, Old Mutual owned on average 54% of Nedbank. At 31 December
2010 the market capitalisation of Nedbank was £6.2 billion. The
results for each of the LTS businesses, Nedbank, Mutual &
Federal and US Asset Management are discussed separately in the
Business Review which follows this Report.
