Old Mutual launches buyback plan as high tax hurts interim earnings

Old Mutual Ltd on Wednesday announced a share buyback plan, but reported that it had taken a tax hit that damped its interim earnings.

The Anglo-South African financial services firm delivered a pretax profit of R 9.80 billion for the six months that ended June 30, up 6.3% from R 9.22 billion.

First-half insurance revenue rose 8.2% to R 38.27 billion from R 35.38 billion, while non-insurance revenue and income was down 1.5% to R 8.96 billion from R 9.11 billion.

In life and savings & asset management business, gross flows were 6.8% higher at R 106.76 billion from R 99.94 billion, driven by good contributions from wealth management and Old Mutual Africa Regions, partially offset by lower inflows in personal finance unit.

Funds under management amounted to R 1.504 trillion at June 30, up 8.9% from R 1.381 trillion at June 230, 2024.

Gross written premiums grew by 5.4% to R 14.51 billion from R 13.76 billion, thanks to good growth in Old Mutual Insure.

Results from operations per share rose 19% to 113.5 rand cents from 95.5 cents, largely owing to ‘exceptional’ growth in Old Mutual Insure and favourable market conditions.

The net investment return climbed 22% to R 84.39 billion from R 69.37 billion. The JSE All-Share Index returned 17% in the first half of 2025, Old Mutual said. Malawi faced elevated equity markets and heightened currency risk as a result of sustained inflationary pressures, it noted.

Old Mutual declared an interim dividend of 37 rand cents, up 8.8% from 34 cents.

The company said it board had approved a share buyback of up to R 3 billion, subject to prevailing market conditions.

‘The buyback will proceed, while the share price reflects a level that is considered accretive to shareholder value,’ the group said.

Income tax expense surged 48% to R 5.28 billion from R 3.57 billion, hitting earnings.

Earnings per share fell 20% to 96.1 cents from 120.2 cents, while headline EPS declined 27% to 97.5 cents from 133.6 cents.

Old Mutual said it has appointed Roger Jardine and Jan-Hendrik Erasmus as non-executive directors, subject to regulatory approval.

Looking ahead, the combination of geopolitical headwinds and resilient market sentiment underpins a ‘cautious’, but ‘constructive’ outlook for the remainder of 2025.

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