Alexforbes FY23 operating income up 8%

Financial Services Group Alexander Forbes has reported a notable increase in assets under management alongside higher profits in the year ending March. The company's assets under management grew by 4 per cent to R454 billion, with headline earnings per share from continuing operations surging by 22 per cent, partly fueled by new business wins. CNBC Africa's Fifi Peters spoke with Dawie de Villiers, the CEO at Alexander Forbes, to delve into the insights behind the strong financial performance. Reflecting on the new business wins and their contribution to operating profits, De Villiers highlighted a positive blend of factors that have steered the company through a challenging yet fruitful year. He emphasized the importance of a strong brand presence to better cater to individuals' needs. The combination of successful new business ventures, strategic acquisitions, and enhanced core business operations have collectively boosted the company's underlying returns. Furthermore, Peters inquired about the recent acquisitions made by the company and their impact on operations. De Villiers noted that while acquisitions require additional effort and expenses to integrate effectively, Alexander Forbes has streamlined its core business operations to seamlessly onboard new entities. The acquisitions have been strategically selected to bolster the company's existing strengths and add tangible value to its bottom line. De Villiers also shed light on the persistent challenges posed by the external operating environment. With a significant portion of revenue linked to market performance, particularly in equities and bonds, the company navigated through a period of subdued market returns. Despite this, Alexander Forbes managed to achieve impressive profit and operating income growth by capitalizing on new business opportunities and extracting more value from existing client relationships. The conversation then shifted to the broader economic landscape in South Africa, with Peters questioning De Villiers about the varying growth trends across different sectors. De Villiers highlighted the resilience displayed by corporate South Africa, particularly in adapting to challenging conditions post-COVID-19. While certain sectors have shown positive growth trajectories, overall GDP expansion remains contingent on increased investments and business expansion. Addressing the recent fluctuations in the Rand's performance and the potential impact on the company's portfolio, De Villiers emphasized the importance of offshore investments as a hedge against currency volatility. He expressed confidence in the value proposition of the South African market, citing robust investment opportunities in local equities and bonds despite currency fluctuations. De Villiers also confirmed the company's ongoing acquisition strategy, emphasizing the importance of scale in key operational areas. With a focus on core business enhancement and strategic acquisitions that align with their growth objectives, Alexander Forbes seeks to capitalize on market consolidation opportunities with a long-term value creation perspective. In a concluding remark, De Villiers discussed the appointment of Khuseni Lamini as the new non-executive chair of the company's board. Lamini's wealth of industry experience and commitment to long-term value creation aligns with the company's strategic vision, underscoring a steady leadership transition for Alexander Forbes. Despite prevailing challenges in the operating environment, Alexander Forbes' resilient performance and strategic initiatives position the company for sustained growth and value creation in the financial services sector.