By Razak Musah Baba
LONDON--Old Mutual PLC (OML.LN) raised its dividend by 32% on Friday, as it reported half-year net profit growth and said the businesses continued to perform in line with expectations.
The financial services company's net profit in the six months to June 30 was up 87% at 531 million pounds ($690 million) from GBP284 million a year earlier. This was helped by total revenue rising by 45% to GBP10.82 billion from GBP7.48 billion a year earlier.
Old Mutual said Friday it expects its full-year dividend to be toward the upper end of the range of 2.5 to 3.5 times cover. It raised its interim dividend to 3.53 pence from 2.67 pence a year earlier.
In March 2016, Old Mutual said it would separate the company into four businesses--Old Mutual Emerging Markets, Nedbank, Old Mutual Wealth and Old Mutual Asset Management--to maximize shareholder value.
"Old Mutual Wealth had a strong six months and Old Mutual Emerging Markets and Nedbank are trading resiliently given the continuing difficult macroeconomic conditions in South Africa," Group Chief Executive Bruce Hemphill said.
The company had previously said it would taking a conservative approach to setting the dividend, given the ongoing separation of its businesses and the need to increase their capital strength as independent entities.
"We are making excellent progress in delivering the managed separation of Old Mutual, having materially reduced debt and largely disposed of our stake in OM Asset Management," Mr. Hemphill said.
"Our focus for the next phase of managed separation is first to finalize the appropriate standalone balance sheets for our two unlisted businesses and second, subject to the necessary approvals, deliver them to our shareholders at the earliest opportunity in 2018 after our 2017 full-year results."
-Write to Razak Musah Baba at [email protected]; Twitter: @Raztweet