- Quilter plans to return approximately R7.3 billion to shareholders after the sale of Quilter International.
- It is targeting a reduction in operating costs of £45 million by end 2024 and wants to to more than double its 2020 operating profit by 2025.
- It is changing its dividend policy to target a higher payout ratio.
Quilter shareholders are in for a windfall as the company is preparing to close the sale of Quilter International before the end of 2021.
The former Old Mutual UK business, which listed separately on the JSE and the London Stock Exchange after the insurer's managed separation process in 2018, said the sale of Quilter International will leave the company with net sale proceeds of about £440 million (approximately R9.2 billion).
Quilter intends to keep £90 million of that money to invest in the business and return about £350 million (R7.3 billion) to shareholders.
Quilter said the £350 million that will be returned to shareholders will come in the form of a full-year dividend of about £25 million and another £325 million through either a special dividend or issuing of shares. It expects that this to be completed during the first half of 2022.
But shareholders are in for more than a once-off windfall.
Since its listing in mid-2018, Quilter has been reorganising itself to simplify its business model. It sold businesses it regarded as non-core, including Old Mutual Global Investors, Quilter Life Assurance and is now close to concluding the sale of Quilter International.
After the sale of Quilter Life Assurance, shareholders received a £375-million windfall (about R6.9 billion).
Quilter CEO Paul Feeney said since the listing, the company has returned around £1 billion to its shareholders.
He said the reshaping of Quilter's corporate perimeter is now complete and expects to grow rapidly from here.
"Three years on from our listing, we have successfully concluded the initial phase of our strategic journey," said Feeney.
He said the company had removed businesses that weighed on its growth trajectory, and it now looks forward to executing "the next stage" of Quilter's strategic journey.
With the initial groundwork now done, Quilter said it expects its adjusted profit to at least double the 2020 levels by 2025. The group is expected to announce a new "simplification initiative" to reduce operating costs by around £45 million by the end of 2024.
With its cost declining and adjusted profit projected to double, the group will be revising its dividend policy. It will target a payout ratio of between 50% and 70% of adjusted after-tax profits, increasing its payout from the current rate of 40% to 60%.
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