Old Mutual sees lower earnings

It reported a basic loss per share (IFRS) of 1.8 pence for the six months ended June after earnings per share of 11.2 pence a year ago.

The group reported adjusted operating profit before tax of £538 million compared with £773 million a year ago, but profit before tax fell to £160 million from £853 million before.

The group reported positive Group net client cash flows of £0.2 billion despite lower sales.

It added that Old Mutual South Africa's long-term business reported an adjusted operating profit of R1.82 billion from 2008's R1.84 billion, which demonstrates the strength of a diverse product offering.

Nordic Life's sales were up 22% to £134 million due to improved product range and stronger distribution, while the group reported UK net client inflows of £0.4 billion driven by growth in platform sales.

US Asset Management recorded net client inflows of $0.6 billion, which demonstrates strength of the boutique mode, the group said.

The group said it made good progress in delivering on its priorities. During the period it closed the Hong Kong office, sold Australian businesses and withdrew from ABN-Amro TEDA Chinese asset management acquisition.

It also withdrew from markets where scale was not achievable Portugal, Hungary and Czech Republic. The major restructuring of the US Life and OMCAP businesses is creating a greater focus and lower cost base, it said.

New chairman

The group also announced that with Chris Collins' retirement at the end of the year, Patrick O'Sullivan will join the Group as Chairman, bringing strong financial services and corporate restructuring experience to the Board.

Julian Roberts, Group Chief Executive, commented: "We have delivered a creditable performance despite continued volatility in equity markets, and have taken a number of decisive actions in line with the strategic priorities we set out in March.

"Our capital position was reinforced during the second quarter and our Group pro-forma FGD position is now above GBP1 billion.

We have substantially derisked our US businesses and our new operating model represents a fundamental shift to stronger governance from the centre".

"For the past 12 months, our primary focus has been on fixing our problems and protecting ourselves against the downside. With the actions to do that largely complete, we can start to look past the immediate market challenges and begin to position ourselves for the upside which will come as markets recover," he said.

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