Chairman's Statement
I retire this year, knowing that the business is in good hands and set fair for the future
DEAR SHAREHOLDER,
Old Mutual’s results rebounded in 2004, with good performances from
all businesses, and as a result earnings per share increased by 53% to
15.3 pence, a very pleasing outcome.
On behalf of the Board and all the Company’s shareholders, I would like to thank management and employees in each business for their continued dedication and commitment to the Group.
This commitment will ensure that your Company is well placed to continue to build in the future on the momentum that has been created.
Investment performance was strong at Old Mutual South Africa, benefiting sales of unit trusts, and our South African general insurance business, Mutual & Federal, had a spectacularly good result. Nedcor is well on the recovery path that we have outlined. We are continuing to develop our plans in South Africa to address Black Economic Empowerment.
In the USA, our asset management business had a successful year, and we were able to resolve the regulatory issues that had arisen at Pilgrim Baxter & Associates, Ltd. Our US life business continued to write a significant amount of new business.
In the UK our asset management operations continued to make good progress.
DIVIDEND
Your directors are proposing a final dividend of 3.5p per share, in line
with our progressive dividend policy, making a total dividend for the
year of 5.25p per share, an increase of 9.4%.
ANNUAL GENERAL MEETING 2005
There are a number of items of special business included in the
agenda for our AGM, which is to be held at our offices in London
on 11 May 2005. The notice of the AGM is set out on pages 160 to 164.
The explanatory notes accompanying that notice provide further details
of these matters.
We are proposing that the existing authorities for the Company to buy back its shares on the five exchanges where they are listed be renewed for a further year at the AGM, and that the Company be authorised to hold any shares that are bought back in treasury, as permitted by UK company law, as an alternative to their being cancelled. The equivalent authorities were not activated during 2004, and we have no immediate plans to use them in the forthcoming year, but they do provide the Company with desirable flexibility in its capital management.
The directors recommend that you vote in favour of all of the items of business at the AGM, as they intend to do in respect of their personal shareholdings in the Company.
BOARD
Chris Liebenberg retired from the Board in October 2004, having served
as a non-executive director of the Company since 1999. I am most grateful
to him for his contribution to the Group, and wish him a long and
happy retirement.
Russell Edey joined the Board as a non-executive director in June 2004 and we have also appointed Wiseman Nkuhlu as a non-executive director with effect from 1 March 2005. I am delighted to welcome them to the Board.
I shall be retiring as Chairman of the Company at the end of the AGM on 11 May 2005, thereby ending over 46 years with the Group. During that period Old Mutual has transformed itself from a major Southern African mutual life assurer into the international financial services group it is today. No greater changes have happened during that time than those that have occurred since the Group demutualised and listed in 1999, which was the springboard for our subsequent international development. At the end of 2004, 38% of the Group’s net assets were in countries other than South Africa and 52% of the value of life new business came from those countries during the year.
I have no doubt that the decision to demutualise and seek a primary listing on the London Stock Exchange was the right one, and this year’s figures clearly demonstrate this.
Your Company is financially strong, with a high return on equity, talented management and staff, and a dedicated Board. I retire this year, knowing that the business is in good hands and set fair for the future.
I wish my successor as Chairman, Chris Collins, the Board and all others involved with Old Mutual good fortune as the Group continues to develop in the years ahead.
Mike Levett
Chairman
28 February 2005
