Old Mutual eyes further cuts to sprawling empire

By Jamie Dunkley 700AM GMT twelve March 2010

Old Mutual

The Anglo-South African conglomerate, that has banking, word and item government operations in some-more than thirty countries, pronounced it will sell the hold up word commercial operation and boyant the item government section in the US as piece of a three-year vital revamp.

Proceeds from the disposals will be used to cut the company"s debt by �1.5bn. It now stands at �2.3bn.

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The headlines has been at large expected given Julian Roberts took over as the company"s arch senior manager in Sep 2008. At the time the organisation disclosed it would compensate �235m to exit piece of the US operations carrying suggested it would need to speak up collateral to encounter guarantees for the $2.8bn (�2bn) non-static payments US business.

The association had already sole the Australian commercial operation for A$35m (�16m), exited Portugal, scaled behind the aspirations "significantly" in the Far East, and sealed the Hong Kong office.

The proclamation sent the shares down 2 to 121.6p. Analysts warned the restructure did not go far sufficient towards elucidate the company"s long-term problems, caused by the distance and diversity.

However, Mr Roberts insisted serve measures would be taken to transform the association structure.

"It"s been utterly transparent to me for a prolonged time that this organisation needs to be simplified," he said. "I don"t mind if that equates to it becomes not as big - as prolonged as it creates some-more clarity to commercial operation and investors.

"We will go on to lift on streamlining the commercial operation as it"s transparent to the marketplace that there are some-more things that we could do."

Mr Roberts pronounced the organisation would not be seeking to have any acquisitions and would grow the core businesses organically. He targeted the UK and Africa as prohibited spots for growth.

"Our Skandia commercial operation in the UK is a devoted brand, that we hold will go on to good marketplace share in the hold up and pensions arena.

"We are additionally well positioned to good as monetary services products turn some-more at large used opposite Africa.

"Lots of companies have been articulate about flourishing their rising markets commercial operation and we"re no different. Across sub-saharan Africa there are outrageous expansion opportunities we are penetrating to take value of."

News of the review, that is thought to have been led by JP Morgan, came as the association reported the full-year results.

The association saw pre-tax increase trip to �247m from �595m last year, driven by a �266m organization to help the poor writedown.

However, handling profits, a magnitude used by analysts to show the underlying opening of the business, grew 3pc to �1.17bn, violence City expectations.

The headlines authorised the association to return the division after cancelling the payout last year. Investors will perceived a last remuneration of 1.5 pence per share on Jun 25.

The association additionally suggested that the regulatory over-abundance collateral had grown to �1.5bn. This was larger than the �700m it hold last year when fears grew that the association would need to hold a rights issue to make firm the collateral position.