Old Mutual’s mixed bag requires a thorough tidy-up: Less tidily, the FTSE 100 group remains a mixed bag of businesses, ranging from a 52% stake in South African bank Nedbank, to a U.K. wealth management company. As a result, shares in Old Mutual trade at an earnings discount of 15-25% to peers. Conglomerate discounts are not inevitable — look at Whitbread and Associated British Foods. But they will occur when earnings have been patchy. Old Mutual toyed with selling its Nedbank stake in 2011. Instead, Mr Roberts bolstered the balance sheet by disposing of Nordic financial services units. Just as well. Nedbank now features in a promising plan to expand bancassurance operations into fast-growing African markets such as Tanzania and Nigeria. Old Mutual should go further. It should demerge or sell its U.K. wealth management business, which comprises financial advice and fund management, and which produced profits of £227 million in 2014. The group’s successful flotation of a U.S. asset Manager last year points the way. A demerger would let investors in London and Johannesburg have as much or as little exposure to each metropolis’s financial sector as they chose. Old Mutual came out of Africa. That is where its future lies.
250p Knock Knock
Not long now folks :-)
7 Apr '15
Moving in to join me...lol
30 Mar '15
What will come first £2.50 or a bid, both possible 1st class business.
30 Mar '15
RE: Promising outlook
250 looking pretty easy from here. Still long, bought more on the recent dip.
27 Feb '15
This company has made some good acquisitions providing a good basis for long-term growth. Some good predictions made by 'zed44' & 'SUFCESSEX' if you don't mind me saying....
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