OUTsurance going from strength to strength 

OUTsurance expects its earnings per share to rise between 4% to 10% when it releases its interim results on 14 March. 

Its normalised earnings per share and headline earnings per share, which excludes an amount of R486 million relating to the profit on sale and dilution of associates, will skyrocket by over 40%. 

OUTsurance said it considers normalised earnings, which excludes non-operational items and accounting anomalies, to be the key indicator of the company’s performance. 

The short-term insurer revealed this in a trading statement detailing its expected performance for the six months ended 31 December 2024. 

OUTsurance said the strong performance during the period was due to significantly lower perils claims compared to the same six-month period in 2023. 

In particular, its South African insurance business saw a decrease in claims alongside its Australian business, Youi. 

The company also had strong premium growth driven by inflationary increases and strong organic growth. 

This is despite the premium growth of Youi being impacted by a significantly stronger rand versus the Australian dollar. 

However, the last six months of 2024 were not without their challenges for the company as it suffered an increase in the cost of its South African Employee Share Option Scheme. 

The increased cost of creating this scheme was largely due to OUTsurance’s strong share price growth of 43.3% over the period. 

The final tranche of the share option scheme vests in September 2025, after which all long-term incentives will be transitioned to the new Conditional Share Plan, which is less geared. 

OUTsurance’s earnings were significantly impacted by the launch of OUTsurance Ireland in May 2024, which resulted in large start-up losses being incurred in the second half of 2024. 

The company assured investors that this is in line with its expectations. 

Overall, normalised earnings are expected to rise by 41% to 47% at a group level. This performance is largely driven by a strong performance in South Africa and Australia. 

Normalised earnings per share are expected to rise by 49% to 55%, while headline earnings per share will rise by between 42% to 48%. 

Earnings per share, which includes the R486 million hit relating to the sale and dilution of associates is expected to have much more muted growth of between 4% to 10%.