UPDATE 1-Old Mutual plots course for break-up this year


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* Break-up to take effect this year

* Annual operating profit rises 22 percent

* CEO declines to give precise listing timetable (Adds CEO comment, detail, analyst, share price)

LONDON, March 15 (Reuters) – Old Mutual reported a 22 percent rise in annual operating profit powered by its UK asset management business and the Anglo-South African financial services group set out how it will complete its break-up plans this year.

It will list the UK asset management business, to be renamed Quilter, alongside a planned secondary offering of 10 percent of the unit’s shares, it said in a statement on Thursday.

The listing in London and Johannesburg will be followed by a listing in the same cities of Old Mutual Limited, a holding company covering the firm’s Africa-focused emerging markets division, its stake in South Africa’s Nedbank and Old Mutual plc.

Old Mutual said in 2016 it was planning to break itself into four parts, as regulatory change made the company too complex and costly to run in its current form.

Chief Executive Bruce Hemphill did not give a date for the listings, telling Reuters by phone they would take place “as soon as practically possible…before the end of 2018”.

“We are keeping that card up our sleeve,” he added.

Hemphill also said the firm had held discussions with potential buyers about the sale of its Latin American and Chinese businesses.

Within a few months of joining as chief executive, Hemphill announced the break-up which will leave him without a job but may entitle him to a maximum bonus of 1,000 percent if he can deliver it successfully.

Hemphill will step down when the break-up is materially complete, he told Reuters. A distribution of Nedbank shares to OML shareholders will take place within six months of the OML listing.

The company posted adjusted full-year operating profit of 2 billion pounds, in line with a company-supplied consensus forecast.

Adjusted operating profit at the UK asset management unit rose 40 percent and net client cash flows jumped 110 percent to 10.9 billion pounds.

Old Mutual sold a part of that business run by veteran investor Richard Buxton to private equity firm TA Associates late last year for 600 million pounds.

Old Mutual’s shares rose 1.5 percent to 255 pence per share at 0945 GMT, above a steady FTSE 100 index.

Bernstein analysts described the results as “decent”, reiterating their “outperform” rating on the stock.

The firm said it would pay a second interim dividend of 3.57 pence per share and total dividend of 7.1 pence, up 17 percent. (Reporting by Carolyn Cohn Editing by Sinead Cruise and Keith Weir)


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