Old Mutual profit growth flattened by currency hit

LONDON Fri Feb 28, 2014 12:53pm GMT

Julian Roberts, Group Chief Executive of Old Mutual smiles during a session at the annual meeting of the World Economic Forum (WEF) in Davos January 22, 2014. REUTERS/Denis Balibouse

Julian Roberts, Group Chief Executive of Old Mutual smiles during a session at the annual meeting of the World Economic Forum (WEF) in Davos January 22, 2014.

Credit: Reuters/Denis Balibouse

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LONDON (Reuters) - London-listed financial services group Old Mutual saw a 15 percent rise in profits in 2013 on the back of robust sales wiped out by a foreign exchange hit from its core South African market.

In a statement of full-year earnings on Friday the group said the South African rand dropping 16 percent against sterling meant operating profit of 1.6 billion pounds was unchanged from a year earlier.

However, on a constant-currency basis, this would have represented 15 percent growth after sales rose 17 percent across the group to reach 25.3 billion pounds.

"I am delighted with the way Old Mutual has performed this year notwithstanding the volatility of the rand," Chief Executive Julian Roberts said.

Investors agreed, and Old Mutual shares were trading up 4.4 percent at 194.5 pence at 0915 GMT, outperforming a 0.2 percent fall in the FTSE 100 index.

"In our view this is a very strong result, demonstrating the core underlying growth potential," said analysts at Bernstein Research.

The group also announced the "bolt-on" acquisition of a British financial advice network and plans to list a minority stake in its asset management business in the United States, but did not disclose details of either transaction.

Money raised in the initial public offering (IPO) in the United States will be spent on the unit's expansion, the company said.

In Britain, the acquisition of Intrinsic, a network of 3,000 financial advisers, continued the company's drive to become a major retail investment management presence.

The group declared a 6 pence final dividend, bringing the total for the year to 8.1 pence per share.

(This story has been refiled to show that FTSE was 0.2 percent down, in the fifth paragraph)

(Reporting by Chris Vellacott; Editing by Pravin Char)

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