Momentum launches R1 billion share buyback

The group said the positive trajectory established in its interim results continued into Q3 2025 (ending 31 March) despite the challenging operating environment.

Despite the escalating geopolitical tensions and subdued economic growth, the group’s normalised headline earnings (NHE) reached R4.8 billion for the nine months ended 31 March 2025.

The earnings run rate in the third quarter also aligned with the first two quarters, excluding the substantial favourable market-related variances of the first six months of approximately R500 million.

The group’s results were underpinned by disciplined execution across its several business units, while a continued focus was on profitable growth.

As measured by the present value of new business premiums (PVNBP), the group’s sales declined by 4% year-on-year, with the third quarter in line with the trend seen in the first two quarters.

The value of the new business (VNB) continued to grow in Q3, even if it was slower than the first half of the financial year.

Over the period, VNB was supported by a shift in new business mix toward more profitable lines and improved performance from Metropolitan Life.

The reduction in the yield curve from 30 June 2024 to 31 March 2025 benefited the bond portfolios, while credit spreads on the annuity portfolios also contributed positively to earnings.

The stronger equity market performance also supported higher fee income from investment contracts.

The increase in direct expenses was slightly above inflation, mainly due to the long-term incentive plan on the back of the group’s substantial share price gains.

The increased spend also impacted expenses to meet compliance requirements resulting from the two-pot retirement system reforms.

“As reported in the interim results for the six months that ended 31 December 2024, benefits from the group-wide performance optimisation project will become more pronounced during FY2026,” said the group.

The group has already saved R116 billion, which is expected to be realised over the next year.

With the group’s cash generation remaining strong, it has received approval from the Prudential Authority for a R1 billion share buyback programme, which started on 14 May 2025.

Outlook

The group said that despite the potential risks from local and global headwinds, its robust financial position allows it to achieve sustainable earnings, sales growth and long-term value creation.

“From a market impact perspective, initial losses driven by tariff-related market shocks at the start of April have largely reversed,” said the group.

“This underscores the resilience of our investment portfolio and the robustness of our balance sheet.”

The group remains focused on delivering on its impact strategy, with progress already made on strategic initiatives.

The group believes that it will reach its financial ambitions for FY2027, which includes Normalised Headline Earnings of R7 billion and ROE of 20%. 

Issued on BusinessTech by Luke Fraser | https://businesstech.co.za/news/business/826484/momentum-launches-r1-billion-share-buyback/