It was that saucy little Capulet minx Juliet who came up with the idea that "parting is such sweet sorrow", and if she hadn’t topped herself she may well have used the line with reference to Old Mutual. Bruce Hemphill was brought in to play the role of not so grim a reaper, applying the last rites to the firm as we knew it and carving it into a more appropriate structure to grow, and its latest results announcement shows that considerable progress has been made.
The break-up is on track to happen this year, and it’s likely to leave investors smiling, because unlike many a restructuring it’s being done at a time when the core businesses are in rude health.
Adjusted operating profit was up 22%, driven largely by a cracking performance from its UK asset management business, which is to be listed separately under the Quilter brand.
There remain a few regulatory hoops through which the business needs to jump, and the separation is expected to generate annual cost savings of about £95m.
Old Mutual Ltd will house the group’s sub-Saharan Africa businesses, and it will entrench its position in SA and aim to grow in key markets in East and West Africa.
Meanwhile, Quilter will aim to keep on churning out its strong investment performance to its 900,000 largely affluent customers, while its Latin American and Chinese businesses may be sold off separately.
Unlike many restructurings Old Mutual’s is being done while the core businesses are in rude health
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All this should do Hemphill out of a job and allow him to see in the New Year with his feet up, reflecting on a job well done.
Before anybody starts proudly pointing to Steinhoff and the adventurous dealings of the beloved Gupta family as evidence that we can hold our heads high in the big leagues of global swindling, it would be worth casting an eye over the remarkable story of Theranos.
This was a Silicon Valley darling with a classic backstory — a blood-testing company founded by a camera-friendly 19-year-old Stanford drop-out, which rose to a valuation of US$9bn in 2015 on the potential of its top-secret technology.
Its board was stuffed with former secretaries of state and retired admirals. Even the great Cold War velociraptor dinosaur Henry Kissinger was on it. Larry Ellison and Rupert Murdoch were investors, and its founder, Elizabeth Holmes, was black polo-necking it on every magazine cover, giving commencement speeches and Ted video talks while sitting on a personal net worth of $4.5bn.
The company claimed its technology could screen for a smorgasbord of diseases from a couple of drops of blood, with no need for needles and all the palaver of a regular blood test.
The only tiny fly in this fragrant pot of ointment was that it couldn’t.
Holmes was relentlessly hyping it up in classic tech unicorn fashion, but the black box didn’t work — which is a little more of an issue in the medical field than if it had just been another disruptive app. The US Securities & Exchange Commission has whacked Holmes with a fat fine for deceiving investors to the tune of about $700m, with promises of a criminal trial to come, and while the company limps on, the glory days are truly gone.
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