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The JSE-listed financial services group Alexander Forbes has seen the impact of business closures and downsizing from the Covid-19 pandemic seeping through its members.
The group published on Thursday (December 3) its unaudited results for the six months ended September 2020, showing a 3% decrease in operating income from continuing operations to R1.54 billion, with performance impacted. due to the challenging economic environment.
Profit from continuing operations (before non-commercial and equity items) of R382 million, down 5% YoY due to lower revenue growth and the impact of stranded costs.
Overall earnings per share from continuing operations improved 6% to 18.8 cents, however HEPS for total operations of 14.5 cents was down 41%, it said.
An interim dividend of 13 cents (2019: 18 cents) per share was declared.
Worryingly, Alexander Forbes noted that its active member base has shrunk to 895,000 members, from 914,000 active members in its full 2020 report.
He noted that up to 15,000 members had been laid off between June and September, amid the fallout from the Covid-19 pandemic and the resulting lockdown. Most of the layoffs were recorded during September (4,613).
South Africa’s official unemployment rate rose to a record 30.8% for the third quarter of 2020, data from Statistics South Africa (Stats SA) showed last month. The expanded definition, which includes discouraged job seekers, rose to more than 43%, and unemployment increased by 2.2 million (52.1%) to 6.5 million, compared to the second quarter of 2020.
Alexander Forbes said that the impact of Covid-19 and the expected future consequences on the economy will affect his original growth and cost targets.
“While our clients are experiencing the benefits of our client-centric and advisory-driven consulting approach, the top line will remain under pressure for the next 18 to 24 months,” he said.
“Despite the difficult business conditions the company has faced over the past six months, core business remains stable,” said CEO Dawie de Villiers.
“We remain confident in our advisory-based strategy and believe that continued achievement of our objectives will positively reflect on business performance over the medium term.”
Read: Ramaphosa pledged to create 800,000 jobs in South Africa – here’s how it goes
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