Old Mutual profit up 14pc

City A.M. Reporter
Anglo-South African financial conglomerate Old Mutual narrowly beat expectations with a 14 per cent increase in profit and said it was sticking by a three-year strategy aimed at simplifying the group's structure.

Old Mutual made a 2010 pre-tax operating profit of £1.48bn, up from £1.3bn the previous year.

Analysts had pencilled in a profit of £1.45bn, according to the company's calculation of consensus expectations.

Shares in the company were up 1.9 per cent in Johannesburg after the announcement.

Old Mutual, which runs banking, insurance and asset management businesses in more than 30 countries, is one-third of the way through a three year shake-up aimed at streamlining the company and refocusing it on life insurance.

The revamp, which came in response to investor concerns that the company's complex structure was weighing on its share price, faltered in October when a deal to sell its majority stake in South Africa's Nedbank to HSBC fell through.

The company said it remained committed to its restructuring plan, and would "work with Nedbank to build shareholder value" in 2011.

Old Mutual has also agreed to sell its US life insurance to hedge fund Harbinger Capital Partners, and is planning to list its U.S. fund management operation by the end of next year.

Old Mutual listed in London in 1999 and launched an international acquisition spree, culminating in the 2006 takeover of Sweden's Skandia, in an effort to reduce its dependence on South Africa, its historical home.