Chief Executive Statement
"We have maintained our earnings at a similar level to last year despite extremely difficult market conditions, which is a testament to our strategy. We have big brands, a leading open architecture business and a track record of providing good investment returns to our clients.
I am determined to resolve the difficulties in our US Life business and to return it to a proper level of profitability.
We have solid foundations, a clear strategy and a robust business that is operating well. The dividend increase reflects our strong capital position and the Board's confidence in Old Mutual's prospects."
Jim Sutcliffe
Chief Executive
Highlights
Solid progress in turbulent markets
- Net client cash inflows of £3.2 billion, 2% of opening funds under management (FUM) on an annualised basis despite volatile market conditions
- FUM down 7% from 31 December 2007 to £259.4 billion, steady in the second quarter
- Life APE sales up 2% to £872 million
- Mutual fund sales down 18% to £3,420 million: strong Nordic (up 103%) and SA growth more than offset by market declines in UK and US
- Value of new business down 10% at £112 million
- Profit before tax from continuing operations (IFRS) down 2% to £835 million, with basic earnings per share of 11.2p
- Adjusted operating profit* from continuing operations (IFRS basis) up 3% to £745 million (30 June 2007: £721 million)
- Bermuda variable annuity guarantee reserve strengthened, £63 million impacting adjusted operating profit, with a total £107 million impact on IFRS earnings; remedial management actions underway
- Adjusted operating profit* from continuing operations (EEV basis) up 26% to £937 million (30 June 2007: £746 million)
- Adjusted operating earnings per share** (IFRS basis) of 7.7p (30 June 2007: 8.2p)
- Adjusted Embedded Value per share of 143.2p at 30 June 2008 (31 December 2007: 173.3p)
- Interim dividend up 6.5% to 2.45p (34.84 cents***) per share
- Capital position remains strong; £1.5 billion pro-forma FGD surplus