Share of the week: MMI Holdings Limited

South Africa's third-largest long-term insurer, MMI Holdings Limited, which was formed from the merger of Momentum and Metropolitan in 2010, posted a 12% increase in annual core headline earnings this week.

CEO Nicolaas Kruger said he was pleased with the overall performance of the group given the global economic conditions, uncertain markets and economic indicators that showed consumers remain under pressure.

"From an MMI group perspective, these solid results were achieved during an integration period, where we have made significant progress to bed down the merger of Metropolitan and Momentum. We are almost two years into the merger process and have already achieved tangible and sustainable synergies."

The group declared a 10% increase in its final ordinary dividend to 69c a share and a special dividend of 65c a share. Total dividends for the year (including the special dividend) increased by 41% to R2.8-billion.

MMI said it was pursuing growth opportunities aggressively in the rest of Africa and developing Asian countries. "We have made good progress in consolidating our African businesses," said Kruger.

"We recently concluded the buyout of FNB Namibia's stake in our Namibian operations for R350-million, which creates the perfect platform for us to grow our presence in Namibia even further."

Other strategic transactions completed during the year included the acquisition of the remaining 50% of Momentum Short-term Insurance and the purchase of a controlling stake in Eris Properties.

"After allowing for these strategic investments and the payment of the final and special dividends, the group's healthy capital buffer of R3.3-billion at June 30 positions the group strongly," said Kruger.

MMI's embedded value increased to R32.5-billion, while the return on embedded value (which gives an overall picture of growing value as a business), was 11.3% higher.

Trading around R20 this week, MMI's share price has risen by 20% in the past 52 weeks.