Alex Forbes to extend service to individuals

Speaking after the company issued its full-year results to end-March on Wednesday, CEO Edward Kieswetter said Alexander Forbes had focused on corporations and large institutions. It was now focusing on catering for the growing needs of individual consumers.

At an institutional level, Alexander Forbes is the largest provider of retirement fund administration, actuarial and consulting services in SA.

It is now eyeing becoming a larger player in the retail market, catering for individuals by providing insurance, financial and wealth advice.

"One of our strongest opportunities is to sell more to individuals than corporations," Kieswetter said. "Two years ago, we said if we want to extract more value, we must focus on retail." He said the retail business contributed about 23% to the top line and the plan was to drive that "north of 30% in the next two years".

He said that if there was already a good market share in the institutional cluster it was going to be hard to drive a lot of growth.

Alexander Forbes is also targeting the public sector as an area of growth. The government is the largest client in SA and the company feels there are a lot of opportunities in the sector.

Kieswetter said Alexander Forbes had always had the government as a client but there was not a big focus on it. The company had now created a unit to specifically focus on offering services to the public sector.

In the year to end-March, Alexander Forbes said, its headline loss per ordinary share widened to 31c, from 14c in the previous period. Profit from continuing operations, before non-trading items, rose 9% to R1,1bn compared to the previous period.

"This growth in trading profit should be viewed in the context of the largely flat results achieved by the UK and European operations, as well as the investments made in strategic growth areas, branding and marketing," the firm said.

"After non-trading items and finance charges, the group's profit before taxation from continuing operations of R302m is significantly (142%) up from the R125m of the previous year," it said.

"As there is no group taxation relief in SA, the tax charges of certain subsidiaries still exceed our consolidated profits before tax, resulting in an after-tax loss of R63m, compared with the R68m loss in the previous year." Alexander Forbes said operating expenses rose 9.7% to R3,2bn in the year ended March.

Source: Business Day