Financial services group Alexforbes expects to report higher annual earnings, reflecting continued growth in operating income due to strong market growth which resulted in higher average assets under management.
The group said in a statement on Tuesday that its headline earnings per share (HEPS) from continuing operations for the 12 months ended March are expected to be 5%-15% higher at 55.5c-60.8c.
Heps from total operations are expected to ben 10%-20% higher year on year. The group’s operating financial results are in line with expectations, it said.
It said inflationary increases from within its retirements and healthcare consulting client base and high client retention also boosted earnings.
The consolidation of acquisitions completed in previous financial years and higher than expected two-pot claims volumes also contributed to the group's top line.
Expense growth was influenced by the previously disclosed change in its property lease contracts and the related accounting treatment under IFRS 16, acquisitions that have been fully consolidated and higher costs related to the implementation of the two-pot system.
The group’s operating profit before nontrading and capital items for the current year is expected to grow between 12% and 16%.
The prior year results reflect the impairment of goodwill, intangible assets and software of R90m, included in non-trading and capital items.
It also noted that in 2021 the group provided for a warrantee claim from a known error which required redress, relating to a UK subsidiary sold in 2012, Alexforbes said in the statement. That provision and subsequent payment of the claim by the group were referred to as the enhanced transfer values liability matter in previous financial disclosures.
The provision was made due to one insurer in the group's layered insurance programme declining to honour their insurance commitment.
“As previously reported, we pursued a legal process against the insurer in two phases, the first of which was ruled upon with finality in our favour on April 2 2025,” Alexforbes said.
The award, which included both interest and costs, has resulted in a profit being recognised in discontinued operations amounting to R152m, plus interest of R34m being recognised in continuing operations in the current year. The group will continue to pursue the remainder of the claim through arbitration, it added.
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