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8 September 2016
The Group reported double digit growth in new business volumes and net result from financial services (net operating profit) despite the persistently challenging operating environment.
Net operating profit of R4 billion increased by 11% compared to the same period in 2015. This was supported by a strong performance by Sanlam Emerging Markets (SEM) and solid growth at Sanlam Personal Finance (SPF). SEM and SPF both reported maiden contributions from recently acquired businesses, namely Saham Finances (R95 million) and Afrocentric (R43 million).
Some of the key features for the six months to 30 June 2016 included:
Headline earnings growth was negatively affected by lower investment returns on shareholder funds due to a relatively weaker performance during the first six months of 2016 from local and some of the non-South African equity markets to which the Group has an exposure. The effect of the latter was aggravated by the sharp appreciation in the Rand exchange rate over the reporting period, while the increase in the Capital Gains Tax inclusion rate in South Africa also required a once-off adjustment to the related tax provision.
The Group considers Return on Group Equity Value (RoGEV) as the most appropriate measure of long-term performance and value creation, given the diversified nature of Sanlam’s operations. For the six months it achieved RoGEV of 7.9%, well in excess of its internal return target.
The Group has attributed its strong performance to the sustained focus on its strategy and the resilience of its operations despite an unsupportive business environment during the period.
Says Sanlam Group Chief Executive Officer, Mr Ian Kirk: “We are pleased with this solid set of results and believe that our strategy and our business operations continue to be resilient in the face of a persistently unsupportive business environment. We remain committed to the strategy and are confident that our management and staff have the requisite skills to effectively implement it.”
As at 30 June 2016, the Group had unallocated discretionary capital of R3.1 billion which is earmarked for value-accretive investment opportunities.
“We expect the economic and operating environment to remain challenging for the remainder of 2016. However, we expect that our continued focus on strategy implementation will see us through,” Kirk concluded.
Details of the results for the six months ended 30 June 2016 are available at