Old Mutual split on track despite replatforming U-turn

Old Mutual Wealth 2014

Old Mutual has said the breakup of its business is progressing to plan despite issues with its replatforming project.

Ahead of its annual general meeting today, Old Mutual said that it would look to complete the separation of its four businesses “at the earliest opportunity in 2018”, having successfully sold down its majority stake in its US asset management arm, Old Mutual Asset Management, in March.

Old Mutual first set out its intention to carve up the business in 2016.

It has confirmed today that its London head office would be shuttered as part of the plans.

Old Mutual chief executive Bruce Hemphill says the firm is “very pleased” with the progress it has made since announcing its “managed separation”.

However, Old Mutual referenced its decision to drop IFDS in favour of FNZ for its ongoing replatforming work just once in the update this morning, only to confirm the IFDS contract had been terminated and FNZ had been chosen instead.

At the end of April, Old Mutual said its cash and liquid assets position stood at £586m. The firm says it will likely have to draw on these as it continues to strike deals to break up the business.

The update reads: “There are significant actual and potential demands on our cash and liquidity during the managed separation and plc wind down. As we proceed with the next steps of our managed separation strategy, cash utilisation will continue not only for the current plc structure, but also the resolution of contingent liabilities and managed separation and business readiness costs across the plc head office and the underlying businesses.”

Today’s AGM will give investors a further trading update and the latest on the plans to split the business.