Our opinion on the current state of AFH

Alexander Forbes (AFH) is a financial services company offering asset management, insurance, healthcare, retirement, consulting, and wealth management to both corporate and private clients. It has a presence in 5 countries in Africa outside South Africa - Namibia, Nigeria, Botswana, Uganda, and Zambia. In the past, the share has fallen from its high of just over R10 in February 2015 to around 430c today. Much of the fall was blamed on its previous CEO, Andrew Darfoor, who was said to have lost the confidence of the board and institutional investors. This was compounded by the resignation of the financial director, Naidene Ford-Hoon, after less than a year with the company. Patrice Motsepe's African Rainbow Capital (ARC) has been instrumental in pushing for changes to the board. In its results for the year to 31st March 2023 the company reported operating income up 8% and headline earnings per share (HEPS) from continuing operations up 22%. The company said, "The group balance sheet remains robust, supported by the strong cash flow generated from continuing operations, with a sound regulatory surplus position of R1 516 million and available cash of R933 million". In a trading statement for the six months to 30th September 2023 the company estimated that HEPS would increase by between 85% and 105%. The company said, "The increase in earnings from total operations is also attributed to the base effects from the prior year, specifically by the performance of discontinued operations". At its current price it is on a P:E of 12,58. The company has sold its group risk and retail life business for R100m which it may use for acquisitions. We see this share as reasonable value at current levels and in a steady upward trend.