Momentum Group (MTM) Q4 2024 earnings summary

Executive summary

• Normalized headline earnings reached ZAR 4.4 billion for FY 2024, up 27% year-over-year, maintaining a strong post-COVID earnings trajectory.

• The group completed its three-year Reinvent and Grow strategy, achieving most strategic goals and setting a strong foundation for the new Impact strategy.

• All business units increased market share, with notable digital transformation and product innovation across segments.

• Achieved strong earnings and employee engagement despite a challenging economic environment.

• Disciplined capital management focused on investing in high-performing businesses and fixing underperformers.

Financial highlights

• Normalised headline earnings rose 27% to ZAR 4.4 billion, with earnings per share up 32% to 309.7 cents.

• Sales volumes hit a record ZAR 82.1 billion, up 19% year-over-year, with significant contributions from Momentum Retail, Investments, and Corporate.

• Dividend per share increased 4% to ZAR 1.25, with a payout ratio of 40%.

• Embedded value per share grew 10% to ZAR 36.94, with a 13.5% return on embedded value including dividends.

• Value of new business (VNB) declined 2% to ZAR 589 million, with margin down to 0.7%; underlying improvement noted when restated for market-consistent methodology.

Outlook and guidance

• The new Impact strategy targets a 20% ROE, 2% new business margin, and ZAR 7 billion in earnings by 2027.

• Cost reduction strategy aims for ZAR 1 billion in savings over three years, with savings spread relatively evenly.

• Dividend policy remains at a 33%-50% payout ratio, with potential for higher payouts or special dividends if surplus capital persists.

• ROE is targeted to return to the 18%-20% range, reflecting improved balance sheet management.

• Confidence in delivering significant value to clients and shareholders, building on a strong foundation.