Alexander Forbes Group (Alexforbes) has reported higher earnings at the halfway stage of the financial year as it focused on implementing its new operating model.
The group reported a 9% rise in operating income to R2.3bn for the six months ended September, while normalised profit from operations, excluding the IFRS 16 adjustment, increased 18% to R446m.
The group said the performance was supported by higher average assets under management, positive investment performance, inflationary increases within its retirements client base, strong client retention and robust new business flows across both the investments and retail segments.
However, operating expenses increased 10% to R1.9bn year on year due to the cash settlement of a portion of the long-term incentive plan awards expensed in the current period that was previously equity settled, and the prior period’s IFRS 16 lease adjustment following the renewal of its head office lease in September 2024. Excluding these items, underlying operating expense growth was contained at 3% year on year, the group said.
HEPS from total operations increased 17% to 33.2c. That increase reflected the financial performance of the discontinued operations, which included the final settlement of R93m pertaining to phase two of the ETV [Enhanced Transfer Value] liability following a mutual settlement agreement, it said.
An interim dividend of 24c per share was declared, up 9%.
Closing total assets, which include assets under administration and assets under management, increased 23% year on year to R696bn.
“We have focused on the implementation of our new operating model, which I believe marks an inflection point in our journey. Our core business units are now strategically positioned to capture growth opportunities across their market segments,” said CEO Dawie de Villiers.
Markets reached record highs in the current period despite volatility in global markets, driven by trade policy uncertainty and geopolitical tensions.
The group said it expected global growth to moderate, but the outlook remained positive.
“Central banks have room for further easing, though they will proceed cautiously given lingering uncertainties,” it said.
In South Africa, lower inflation and gradual reforms provide a constructive environment for growth, even as sentiment indicators remain weak.
“South Africa’s move toward a 3% inflation target signals a structural shift that promises long-term benefits: lower borrowing costs, improved valuations and enhanced currency stability. With repo rates expected to settle between 5.5% and 6%, this environment creates tailwinds for equities and property while aligning the country with global standards,” it said.
“However, we remain mindful of risks, including geopolitical tensions, a potential US recession, and volatility in AI-related equities,” it added.
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