Old Mutual hails strong progress despite rand volatility

Financial services group Old Mutual blamed the volatility of the South African rand for flat annual profits, but said its underlying activities had performed strongly.Old Mutual, which owns pension provider Skandia, unveiled adjusted operating profit of £1.6bn, similar to last year in reported currency, but up 15% at constant currency.However, it said it had achieved double-digit growth in each of its main divisions, with positive net client cash flows into all its operations totalling £15.5bn.The group said it was expanding in South Africa, with more than 750,000 new Old Mutual and Nedbank customers."We have taken significant steps in our goal of becoming Africa's financial services champion, with new activities in East and West Africa and nearly 600,000 new customers," the group said.Gross sales rose 17% to more than £25bn, with funds under management (FUM) lifting 19% to £293.8bn.Group return on equity (RoE) at 13.6% remained well within the 12-15% it had set as a target.It also unveiled plans for an initial public offering of a minority interest in its US asset management arm in 2014, subject to market conditions. Old Mutual declared a final dividend of 6p, up 14%, resulting in a 16% increase in the total dividend of 8.1p.Chief Executive Julian Roberts said: "While the external environment is likely to remain uncertain, and in particular the impact of the movement of the rand on our reported results, we believe the long-term structural growth trends in Africa and strong demand for banking and savings products remains intact."Shares in Old Mutual rose 4.6p or 2.5% to 190.8p in early trading in London.PW