Alexander Forbes CEO: How emigration impacts our business

Alexander Forbes, a leading financial services provider, has recently reported a 42% increase in headline earnings per share, a significant turnaround from a decrease of more than 20% in the same period last year. The CEO of Alexander Forbes, Dawie de Villiers, sat down with CNBC Africa to discuss the factors influencing these results. One of the major challenges facing the company is the trend of individuals dipping into their pensions prematurely due to economic hardships. De Villiers acknowledged this issue, noting that tough economic conditions make it difficult for businesses to maintain stability and growth. As companies struggle to retain employees and individuals face high levels of debt, the impact is felt across the board, affecting both businesses and individuals. Emigration is another notable factor affecting Alexander Forbes. De Villiers highlighted the departure of skilled individuals and business owners, leading to the closure of small businesses and resulting in a loss of clients for the company. Despite the current challenges, De Villiers remains optimistic but cautious, recognizing the lag effect of these issues on the company's performance over time. In addition to these challenges, electricity shortages pose a significant threat to businesses in South Africa. De Villiers emphasized the long-term consequences of these shortages on productivity, costs, and overall economic performance. The CEO explained that while the company directly feels the impact of these challenges, it also relies on the success of other businesses to thrive, making the interconnectedness of the economy a critical factor in Alexander Forbes' performance. To navigate these complex and evolving challenges, De Villiers outlined the strategic approach taken by the company. Focusing on enhancing the client experience and simplifying operations, Alexander Forbes aims to future-proof its business in a low-return and weak economic environment. By investing in client-facing roles and streamlining operations, the company seeks to maintain a competitive edge and drive efficiency. Cost management has been a key focus for the company, with a careful balance between investing in strategic areas such as staffing while cutting non-essential expenses such as external consultants. De Villiers highlighted the importance of strategic decision-making in cost-cutting measures to ensure sustainable growth and performance. One of the significant cost implications for the company has been the impact of power cuts on operations. With the need for generators and increased fuel costs, Alexander Forbes has faced challenges in managing the operational and financial repercussions of these interruptions. De Villiers noted the substantial percentage of costs associated with mitigating the effects of power cuts, underscoring the need for proactive measures to address this ongoing issue. Looking ahead, Alexander Forbes remains focused on strengthening its resilience and adaptability in the face of economic uncertainties and operational challenges. By prioritizing client satisfaction, operational efficiency, and cost management, the company aims to sustain its growth trajectory and navigate the evolving landscape of the financial services industry.