Alexforbes, a financial services company listed on the JSE, experienced an 8% rise in profit for the six months ending 30 September 2024. The company announced an interim dividend of 22 cents per share, which marks a 10% increase compared to the previous year.
In a statement on Sens made public on Monday, the group disclosed that its total closing assets, which include assets under administration and management, reached R568 billion—up by 25% compared to the same period in 2023.
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Read: Alexforbes posts strong gains with 16% AuM Rise
The company’s share price reached R7.53 during early morning trading, reflecting a 1.76% increase from Friday.
Headline earnings per share from total operations were reported at 28.4 cents, indicating a 3% rise from the prior period. The group’s operating income soared by 12% to R2.1 billion, driven by the consolidation of previous acquisitions and an increase in average assets under management, which were bolstered by favorable market conditions, as stated in the report.
“Our total return to shareholders over the last four years stands at 46.9% per annum, thanks to the strategic initiatives implemented by our dedicated team, even amid a challenging operating environment,” commented CEO Dawie de Villiers.
Listen: Acquisition-led profit growth sees Alexforbes up dividend
Increased Costs
During this period, operating expenses rose by 11% to R1.7 billion, driven by costs related to acquisitions, increased personnel and technology expenses, as well as higher costs associated with the two-pot system.
The group indicated that personnel costs accounted for 63% of total operating expenses, with a 12% year-over-year increase due to the demand for enhanced client service teams to cater to existing clients while preparing for the anticipated rise in administration claims linked to the two-pot system.
Technology expenses also rose by 13% year-on-year due to costs associated with the implementation of the two-pot system, including software and licensing fees and increased reliance on outsourced services.
Previously, Alexforbes had highlighted substantial costs tied to the rollout of the two-pot retirement system, which became effective on 1 September 2024.
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Two-pot Insights
Following the implementation of the new regime, Alexforbes conducted a survey of 8,224 members, which revealed the following:
- About 350,000 members (approximately 32% of the membership base) have filed claims totaling around R6.5 billion before tax.
- The average claim stands at roughly R19,000, excluding tax implications.
- A total of 340,000 claims have been processed, amounting to approximately R4.6 billion after considering tax consequences.
- The claims processed in two months exceeded the typical claims volume of two years.
Read:
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Among the members who made claims:
- 86% reported satisfaction with their withdrawal decisions.
- 96% acknowledged that their long-term retirement outcomes would be affected, and the same percentage was aware that taxes would be incurred on their withdrawals.
- 50% used their emergency savings pot claim to mitigate debt.
- 30% utilized their emergency savings pot claim for essential living expenses.
- 13% allocated their emergency savings pot claim toward significant household purchases.
- 63% plan to make another claim.
- 37% do not intend to submit additional claims.
Read: Two-pot withdrawals to surpass R5bn for state finances
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