Black-owned financial services group Vunani has seen an increase in revenue and premium revenue cut backby high inflation, pushing up its operating costs.
The R479m company said on Thursday in its interim results to end-August that revenue and premium revenue increased 17.2% to R376.8m, in part because death claims in its insurance business fell as the Covid-19 pandemic waned.
The bulk of revenue was generated by the insurance segment of the business (40.5%), followed by asset administration with just more than a quarter, and fund management with a similar slice of the pie.
High inflation in part led to operating expenses increasing 15.3% to R218.2m as insurance-related and other operating costs went up.
The government lifted the last Covid-19 restrictions during the reporting period, which helped Vunani and others. But the recovery was disrupted by Russia’s invasion ofUkraine, high inflation, global interest rate hikes and continued load-shedding.
“The concomitant risk of additional currency-related inflationary pressure left SA monetary authorities with little choice but to follow suit, despite a still very depressed domestic economy,” the company said.
CEO Butana Khoza said the market correction in the quarter “hurt valuations of assets sitting on our balance sheet and tempered a performance that would have otherwise been exceptional”.
Headline earnings per share (Heps), a widely used measure of profit that strips out impairments and one-off items, fell 6.5% to 20.3c.
The fund management business was propped up by Vunani Fund Managers Botswana increasing assets under management by close to a fifth to R10.9bn.
The group declared an interim dividend of 9c per share, a 38.5% increase year on year.
Vunani announced on Monday that it will acquire half of the Verso Group, which operates in the same sector, as part of its strategy to expand its financial services, particularly in niche markets in SA and the rest of Africa, focusing on Southern African Development Community countries.
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