Clientèle, a South African financial services group, reported a steady performance for the six months ended December 31, 2024, a period shaped by the consolidation of 1Life Insurance, acquired with regulatory approval on July 14, 2024.
The group flagged tough times for customers, saying: “Currently, our market continues to experience difficult economic circumstances, negatively affecting affordability and financial resilience. As a result, Clientèle continues to experience high levels of withdrawals, suspension of debit order mandates, and disputes.”
Headline earnings per share increased 3.6% to 51.25 cents from a restated 49.46c in the prior period, while earnings per share soared 217.1% to 156.85c from 49.46 cents, propelled by a once-off bargain purchase gain of R469.1 million linked to the 1Life deal. No interim dividend was declared after a R566.4 million payout in October 2024.
Chairman GQ Routledge and Managing Director Basil Reekie said, “Over the past six months, South Africa’s macroeconomic environment has been characterised by modest economic growth, fiscal challenges, labour issues, water supply constraints, currency depreciation and political uncertainty both locally and globally.”
They added, “These factors were tempered by the renewed sense of optimism, fuelled by a reduction in load shedding, declining inflation and the formation of the Government of National Unity. Despite the optimism, it will take time to see an improvement in the high unemployment rate and for positive change to reflect in the lives of our target market. Currently, our market continues to experience difficult economic circumstances, negatively affecting affordability and financial resilience.”
The insurance service result fell 55.3% to R70.8 million from R158.4m restated, hit by higher withdrawals
Clientèle saw a 55.3% drop in the total insurance service result to R70.8 million from R158.4m restated. This as claims trends varied: 1Life showed positive gross claims experience, while Clientèle Life faced higher-than-expected withdrawals.1Life showed strong claims trends, while Clientèle Life saw more dropouts than expected.
However, net insurance finance income more than doubled to R208.4 million from R83.5m, aided by lower long-term inflation assumptions and 1Life’s interest accretion.
Revenue from contracts with customers grew 2.2% to R178.2 million from a restated R174.4 million, while operating expenses rose 22.3% to R266.3m, driven by 1Life’s inclusion and one-off integration costs.
The embedded value per share climbed to 1 844.61 cents as of December 31, 2024, up 3.9% from a year earlier. The group’s total embedded value surged 40.4% to R8.4 billion in June 2024, with 1Life contributing R2.1bn. The annualised recurring return on embedded value reached 14.3%, up from 13.2%.
Of note, the value of new business increased an impressive 49.6% to R187.4m, with 1Life adding R49.3m.
Operationally, 1Life completed its transition to the Clientèle Campus during the period, with the group noting a smooth initial integration. Net profit for the period leaped 316.8% to R698.4m from R167.5m restated, incorporating 1Life’s R42.1m contribution.
Looking at the group’s segments: Clientèle Life, the primary long-term insurance segment, posted a 16.5% rise in net profit to R159.6m, while Clientèle General, the short-term insurance arm, saw net profit grow 15.7% to R56.9m. The non-insurance segment, including CBC Rewards, reduced its net loss to R6.4m from R16.2m.
The group maintained a strong solvency and liquidity position, supported by robust cash flows.
Looking ahead, Clientèle’s board said, “In this challenging environment, the Group remains focused on treating its clients well and providing products and services that meet their needs. We will continue to improve on the delivery of our products and services to the market conveniently and efficiently.”
The board added, “The integration of 1Life into the group remains a key focus area. Areas of efficiency and synergy have been identified, and every effort will be made to maintain and improve business efficiencies as well as capital and liquidity management.”
Additionally, following the required shareholder and Regulatory approvals, expected later this year, the acquisition of Emerald Life will be a key focus area for the group and “presents a considerable opportunity for growth”.
The management also reported “encouraging early signs of better stability in the collections environment” after initiatives to reduce withdrawals.
The market warmed to the results, with Clientèle’s share price on the JSE up 3.1% at R12.99 by 2.40pm.
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