Operating conditions remained challenging in South Africa with the economy contracting by 3,2% in the first quarter of 2019. Subdued economic growth of less than 1% is expected for the 2019 year.
Despite weak operating environments in South Africa and Namibia, as well as the general adverse effect of international political and economic turmoil on emerging markets, the Group achieved a pleasing operational performance in the six months ended 30 June 2019. The Group’s strategic intent of sustainable value creation for all key stakeholders remains firmly in place and we continued to execute on all strategic pillars in the first half of 2019.
Most of the Group’s businesses achieved a solid underlying performance in the first half of 2019 despite challenging economic and investment market conditions. Solid organic growth was augmented by the Saham Finances corporate activity in the second half of 2018, contributing to a 13% increase in net result from financial services, 19% growth in the value of new covered business (VNB) written and 19% higher net fund inflows. The annualised RoGEV per share for the six months to 30 June 2019 of 10,5% was lower than the target of 13,5%, largely attributable to low returns from the SEM and SIG operations as well as the listed Santam investment. Annualised adjusted RoGEV per share, which excludes investment market and currency volatility as well as changes in interest rates and other factors outside of management’s control, was below the target at 8,9%. Annualised actual and adjusted RoGEV per share excludes annualisation of the positive impact that the new share issuances in March 2018 and 2019 had on GEV per share.
Some of the strategic highlights for the first six months include the implementation of the package of B-BBEE transactions approved by shareholders on December 2018, resulting in additional capital raised of R4,8 billion (net of vendor funding) and Capitec funeral sales exceeding 1 million policies since launch in May 2018.
up 10% in constant currency
2,46% in 2018