Momentum Group's headline earnings a share increased 20% to 414 cents for the nine months to March 31 after all its business units made a positive earnings contribution.
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Momentum Group reported “pleasing earnings delivery” in the 9 months to March 31, after positive contributions from all its operating units and strong performances in particular from Africa, Momentum Investments and a turnaround in the India business.
The operating update released Monday, a day before the financial services group holds its Capital Markets Day, appeared to be met favourably by investors, as the share price traded 3.37% higher at R37,13 in the afternoon, at a time when the JSE All Share Index was down 0.82%.
Group headline earnings a share increased 20% to 414 cents. Normalised headline earnings (NHE) increased 15% to R5.54 billion. Recurring premiums increased 7% to R3.3bn. Single premiums were up 15% to R50.23bn.
Sales growth offset new business margin pressure. NHE per share increased by 20% to 414 cents, with the additional growth from NHE attributable to fewer shares in issue following share buybacks.
The Momentum Investments unit delivered “outstanding earnings growth” - its NHE contribution increased 53% to R992m - driven by annuity profits and favourable equity market conditions supporting asset-based fee income, the group directors said.
Assets under administration grew 18% to R572bn, following strong new business inflows into Momentum Wealth and assets under management increased 9% to R654bn, reflecting favourable equity market returns. Net inflows recovered to R1.3bn versus a R13.5bn net outflow at the second quarter end.
Metropolitan Life increased NHE by 21% to R767 million on the back of better expense management, fewer onerous contracts, and positive mortality experience.
Guardrisk and Momentum Insure's growth benefited from sustained underwriting discipline. Momentum Corporate and Momentum Retail delivered stable earnings contributions off a prior high earnings base.
Momentum Africa's NHE increased 60% to R304m, supported by solid investment income, improved operating profits, and positive economic assumptions changes. The life businesses benefited from higher expected profits in Namibia and Lesotho, favourable yield curve movements in Botswana and Namibia, and higher investment income from fixed deposits in Botswana.
The performance optimisation program continued to deliver, with cumulative annualised savings of R641m realised, including R131m during the third quarter.
By April 8, the group completed a R1bn share buyback program, repurchasing 27 million shares at an average R36.54 per share.
Momentum Health's NHE grew 35% to R343m, driven by growth in overall membership, favourable underwriting experience in capitation contracts, and disciplined expense management.
Overall membership grew 5% to 1.36 million members year-on-year, mainly from membership growth in the public segment and Health4Me, driven by a growing need for affordable healthcare insurance. Momentum Medical Scheme membership remained stable.
India's NHE improved to a profit of R3m from a loss of R42m in the prior period. Gross Written Premiums (GWP) grew 24% year-on-year (42% on an Indian local currency basis), supported by the expansion across both retail and group channels.
Momentum Retail's NHE increased by 1% to R973m. Increased revenue on the long-term savings business and improved persistency and expense experience variances contributed positively.
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