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Old Mutual Plc Boosted By Performance In Emerging Markets

Shares of Old Mutual (LSE: OML) received a boost in early trade this morning, jumping 5% following the publication of its interim results for the half year ended 30 June 2013.

Citing a “strong financial performance”, adjusted operating profit rose by 14% to £801m at constant currency (1% on a reported basis), while net client cash flow soared 160% to £9.1bn against £3.5bn in H1 2012. Funds under management also increased to £289.3bn, up 9% from £265.5bn in the comparative period last year.

Many will highlight Old Mutual’s performance in emerging markets from this morning’s results, with gross sales (excluding South Africa) up 49%, as management lauded “significant developments in [its] African strategy”, following entry into new markets such as Ghana, Nigeria and Kenya. As for South Africa, group chief executive Julian stated: “We are working with our retail customers…  to help them through a challenging economic environment.”

Roberts went on to say:

“This has been another good six months for Old Mutual, with our Emerging Markets business in particular performing very well. Our US Asset Management business had a very strong half, substantially contributing to our positive net client cash flows which represented 7% of opening funds under management on an annualised basis.

“We are seeing improved conditions in the US and the UK, and sub-Saharan Africa continues to grow strongly. We are focused on delivering our strategy and maintaining our financial discipline. We are clear on our priorities and confident that we will continue to deliver sustainable value to our shareholders and customers.”

Elsewhere, the investment company also saw strong growth in its Wealth operations, with gross sales up 26% to £6.7bn year on year, and reported “strengthened asset management capability in the UK”.

Today also brought the news that Old Mutual has signed an agreement for International Financial Data Services to enhance the services provided by subsidiary company Skandia to financial advisers and customers in the UK. The 20-year agreement sees a number of administration functions outsourced to IFDS, with the latter’s technology able to “ensure that we can respond to adviser and customer needs faster than we can today and will result in new functionality and greater flexibility to be delivered to advisers via the UK platform”, according to management.

A strong set of results all round for Old Mutual, then, after a plunge in its share price last quarter following concerns over the Retail Distribution Review. Today’s gains have helped it rise back to a 20% increase on its position 12 months ago.

Following a 1.7p rise in adjusted earnings per share to 9.3p, shareholders will be pleased with the interim dividend’s 0.35p or 20% increase to 2.10p (H1 2012: 1.75p), which puts Old Mutual on a consensus yield in excess of 3.5%, more than the FTSE 100’s average.

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> Sam does not own shares in Old Mutual.