Old Mutual ups profit and looks to further gains

SHARES in insurance giant Old Mutual rose more than three per cent yesterday after it delivered a 14 per cent rise in 2010 pre-tax profit.

The UK and South Africa-focused insurer said earnings and profit were up in all divisions due to strong new business growth and cost controls.

Group IFRS pre-tax profit rose to £1.48bn from £1.3bn in 2009, above a £1.45bn analyst consensus forecast.

Group chief executive Julian Roberts said 2011 should be “a year of further delivery” as the group continued to simplify and refocus on its insurance business.

Earnings per share rose 20 per cent to 16p from 13.3p in 2009 while funds under management grew six per cent to £309.3bn from £275.4bn in 2009. Sales were up seven per cent.

Old Mutual, which tried to sell its stake in South African bank Nedbank last year, did not clarify whether it was still keen to sell, saying only that it would “continue to work with Nedbank to build shareholder value”.

It also confirmed the sale of its US life business to Harbinger Capital for $350m (£215m), which Shore Capital analyst Eamonn Flanagan said was just 22 per cent of its $1.6bn IFRS net asset value. Its shares closed up 3.3 per cent at 137.7p.