Investment manager Alexforbes is set to leverage OUTvest’s technology to position itself as a digital disruptor in the market.
On February 1, 2024, the group acquired 100% of the issued share capital in OUTvest, a private South African company, for R38 million. This acquisition was financed through a term loan facility.
Outsurance, one of the JSE’s standout success stories over the past decade, launched OUTvest six years ago with the promise of replicating its insurance business success. OUTvest provides goal-based advice and passive investment solutions through a website and an app, integrating technology with financial advisers based in a call centre.
Alexforbes has stated that over the past two years, it has implemented elements of its digital ecosystem and is now ready to integrate these platforms to unlock efficiencies, enhance client experience, and drive retail growth. “OUTvest is a critical component of this ecosystem and the integration of this business and the adoption by our advisors will change the landscape of how we provide advice to our broader membership base,” Alexforbes informed investors.
The company added that acquiring OUTvest allows it to accelerate technology development and improve its digital interface with retail members and customers.
Today, Alexforbes reported a solid financial performance, achieving growth aligned with the group’s strategy. Despite an uncertain economic environment, the group reported a 12% increase in operating income to R3.9 billion for the twelve months ended March 31, 2024.
OUTvest contributed a loss of R3 million from the acquisition date to March 31, 2024, with revenue of R2 million for the two months ended March 31, 2024. If the acquisition had occurred on April 1, 2023, the consolidated revenue and profit for the group for the year ended March 31, 2024, would have been R5,066 million and R669 million, respectively.
Alexforbes’ profit from operations increased 2% year-on-year to R801 million. Cash generated from continuing operations remained robust at R1.1 billion. Headline earnings per share from total operations increased 29% to 61.5 cents per share. “This increase is attributable to the financial performance of the discontinued operations in the current year,” said Alexforbes.
The group’s balance sheet remains strong, supported by sustained cash flow from continuing operations, with a sound regulatory surplus position of R1.9 billion and available cash of R1.2 billion. The group cover ratio of 2.8 times is comfortably above the target solvency cover ratio of 1.2 times.
A gross final cash dividend of 30 cents per share has been declared, up 11%, distributing a total of R389 million to shareholders. This brings the
total annual dividend to 50 cents per share, up 19% year on year.
