Equity Analysis on Old Mutual Plc.
Autor: Mikki • January 30, 2019 • 2,393 Words (10 Pages) • 601 Views
...
- Quantitative analysis
- Financial performance
We can see some volatility in some index and some unhealthy trend in Table 3, like net profit and EPS. The Group however showed favorite performance in Cash Flow/Share. To further know the details, we are going to discuss them separately.
Table 3 Financial performance of Old Mutual Plc.
2012
2013
2014
2015
2016
Takeover £m
19793
19810
15478
13695
18696
Growth in Takeover %
102.30
0.09
-21.87
-11.52
36.52
Gross Margin %
72.76
73.93
74.91
76.85
82.40
Operating Income £m
1427
1515
1340
1288
1211
Operating Margin %
7.21
7.65
8.66
9.40
6.48
Net Profit £m
1487
983
852
924
846
EPS £
0.249
0.15
0.124
0.127
0.119
Diluted EPS £
0.231
0.135
0.115
0.122
0.116
Cash Flow/Share
1.04
1.27
1.29
1.13
1.29
Resource: Old Mutual Plc. Annual Report (2011-2016)
- Turnover and profit analysis
Table 4 Turnovers and Profits of Old Mutual Plc.
2012
2013
2014
2015
2016
mean
Turnover £m
19793
19810
15478
13695
18696
17494.4
Rate of change in turnover %
102.30
0.09
-21.87
-11.52
36.52
13.83
EBIT £m
3282
3148
3036
3243
3617
3265.2
Rate of change in EBIT %
6.25
-4.08
-3.56
6.82
11.53
3.21
Source: Old Mutual Plc. Annual Report (2011-2016)
The super high rate of change in turnover in 2012 is due to the sharp decline in investment returns in 2011. (Old Mutual Plc. Annual Report, 2011) The turnover and profit decreased in 2014 due to lower fair value gains on seed capital as well as brand-building cost for the Group through investing in Old Mutual Wealth’s positioning in the UK. (London South East, 2015)
However, the Group seems to recover from its loss before generally since 2016. Old Mutual moved 3 places in the Global 500 ranking, up from 500 in 2015 to 113 in 422. (Fortune, 2017)
- Profitability Ratio and Position of Old Mutual Plc.
ROCE is the ratio of EBIT to capital employed, used to test the ability of capital operation. When ROCE is higher than the expected return of shareholders, they will get the surplus return.
Table 5 Profitability ratio and current position
2012
2013
2014
2015
2016
Mean
ROCE of Old Mutual %
9.32
...