Sanlam’s strategy leads to 44% earnings growth

by admin 0

“We are pleased with the performance of all the businesses across the Group despite the persisting challenging economic conditions. Commitment to executing on our strategy over the years, coupled with a focus on specific priorities identified for 2014, supported our sustained growth during the first six months of the year,” said Dr Johan van Zyl, chief executive of [DATA SLM:Sanlam Limited].

For the year ended 30 June 2014, the group achieved operating earnings growth of 44 per cent with organic growth of 40 per cent due to a significant earnings contribution of 130 million rand from acquisitions, up from 33 million rand in 2013.

(READ MORE: Sanlam normalised HEPS up 35%)

New business volumes rose by eight per cent to 82 billion rand while net value of new life business increased by 11 per cent.

The annualised Return on Group Equity Value (RoGEV) per share, Sanlam’s key metric used to measure shareholder value creation, reached 18 per cent, exceeding the expected 12.2 per cent target.  

Normalised headline earnings per share were up 27 per cent to 214.8 cents while net fund inflows grew by 72 per cent to 21.7 billion rand.

Sanlam Personal Finance (SPF) increased new business volumes by 23 per cent with new life business and new investment business sales growing by 14 per cent and 33 per cent respectively.

Sanlam Sky, a division of the group that deals with the entry level market, only posted a six per cent growth in individual recurring premium business due to the impact of the industrial strike action that took place in South Africa’s platinum belt.

Glacier, Sanlam’s financial services’ division focused on the affluent market segment, achieved strong growth of 30 per cent with gross operating profit increasing by 26 per cent supported by higher assets under management.

Sanlam Emerging Markets saw significant growth of 50 per cent in new business volumes with gross operating profit increasing by 62 per cent. Large contributions came from all regions, specifically through transactions with Indian based commercial vehicle finance company, Shriram Transport Finance Company, Malaysian based financial services business, Pacific & Orient and Namibian banking group, Capricorn Investment Holdings.

(READ MORE: Sanlam buys 51% stake in MCIS Zurich Insurance)

Sanlam Investments (SI) posted seven per cent growth in new business volumes with net fund inflows hitting 6.4 billion rand and gross operating profit increasing by 43 per cent due to higher assets under management, performance fees and good mortality experience at Sanlam Employee Benefits.

Santam, the group’s insurance cluster, reported a major hike of 194 per cent in gross operating profit and written premiums by ten per cent.

Dr Van Zyl said that Sanlam will remain focused on identifying investment opportunities in emerging markets and increasing the group’s footprint in key market segments in order to drive new business growth in the long term.

“In line with our diversified business, we have recently refreshed our brand to better position and reflect the Group as well as enhance our appeal to the various market segments we serve as well as to our own staff and stakeholders,” he said.

(READ MORE: Sanlam penetrates Rwanda’s insurance market)