* Old Mutual reports above forecast operating profit
* Company splitting into four main businesses
* Anglo-South African firm open to offers for business units
(Recasts with CEO comments, adds analyst, share price)
By Carolyn Cohn
LONDON, March 9 Old Mutual is on track
to complete its break-up into four parts by the end of 2018,
although improvements to IT systems at its UK asset management
unit could take longer and cost more than expected, the chief
executive said on Thursday.
The Anglo-South African financial services group is
splitting itself up into its four main businesses because it
says regulatory change has made it too complex to run the
disparate group in its current form.
The firm said in August 2016 that a new platform for Old
Mutual Wealth would cost 450 million pounds ($547.07 million)
and be completed around the end of 2018.
"This is a very, very complex new build of a replacement
platform ... these projects tend to take longer and cost more
than one would like", chief executive Bruce Hemphill told
Reuters by phone, though he added he didn't think any changes to
costs or timing would delay the group's separation plans.
The firm said in a trading statement it planned to give more
detail on the platform upgrade within the next two months.
Old Mutual plans to dual-list its UK asset management and
African emerging markets businesses in London and Johannesburg
and cut stakes in its U.S. asset management division
and South Africa's Nedbank. It has already started
selling its stake in OM Asset Management (OMAM) down to 51
It has also said it is open to offers for its businesses,
amid speculation of private equity bidders for some of them.
Hemphill said the break-up plans had "sparked a lot of
interest," without giving more detail.
Eamonn Flanagan, analyst at Shore Capital, said "the news
that the UK platform transformation is expected to take longer
and cost more is not going to be taken well", but reiterated his
buy rating on the stock after stronger than expected results.
Old Mutual posted a slightly above-forecast 2016 adjusted
operating profit of 1.67 billion pounds, up 1 percent from a
year earlier, helped by a focus on costs in a volatile political
and economic environment.
The profit compares with 1.61 billion pounds in a
company-supplied consensus forecast.
The group also said it appointed former South African
Finance Minister Trevor Manuel as chairman of its emerging
markets business, following a review which means a greater focus
on sub-Saharan Africa.
Old Mutual shares were trading at 225.8 pence at 0850 GMT,
down 1.4 percent and compared with an 0.5 percent drop in the
FTSE 100 index.
Old Mutual said it would pay a final dividend of 3.39 pence
and total dividend of 6.06 pence, down 32 percent from a year
($1 = 0.8226 pounds)
(Reporting by Carolyn Cohn; Editing by Jane Merriman and Edmund