OUTsurance cushions RMI

Rand Merchant Investments (RMI) says the first half of its 2021 financial year continued to be dominated by the Covid-19 pandemic, with corresponding economic uncertainty and market volatility. However, it says it showed some resilience under the challenging circumstances, supported by its OUTsurance subsidiary.

The financial services investment holding company also owns stakes in listed companies Momentum Metropolitan Holdings (MMH) and Discovery, as well as a number of unlisted investments including a stake in UK insurer Hastings.

RMI said its performance for the six months to end-December was driven by a 23% rise in OUTsurance’s normalised earnings to R1.4 billion. The short-term insurer’s gross written premiums increased by 18% despite the low premium inflation experienced across the motor insurance portfolio. The overall new business premium growth for the OUTsurance group increased by a strong 40% over the period.

Discovery reported a 1% decline in normalised earnings to R2.3 billion, while Momentum Metropolitan’s earnings decreased by 43% due to increased provisions as a result of the pandemic. Normalised earnings attributable to Hastings grew by 8% to R183 million.

RMI’s own normalised earnings increased by 11% to R2.05-billion for the period, resulting in normalised earnings per share of 133.7c. After withholding a final dividend last year due to the uncertainty caused by the impact of Covid-19, it declared an interim dividend of 22.5c per share, down from 45c a year earlier.

The net value of RMI’s portfolio rose 11% over the period to R67.1 billion, with a net value per share of R43.80.

The company’s shares fell 4.7% to R30.47 yesterday.

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