Sanlam has released its results for the year ended December 2021. The base period covers the worst of the pandemic, so keep that in mind when assessing this result. The key takeout from this result is that operating profits have returned to pre-pandemic levels.

I’ll start with the dividend, something that Sanlam prides itself on. If you are an investor who places importance on regular dividends, then Sanlam makes a strong case for being on your shortlist. The company has been an exceptional source of dividends over the years and declared a final dividend of 334 cents per share for this financial year, up from 300 cents per share in 2020.

This is a trailing dividend yield of roughly 5%, which is substantial for a group of Sanlam’s size and resilience.

Delving into the results, we see the net result from financial services up 13% and net operational earnings up 23%. At diluted headline earnings per share (HEPS) level, the increase is 27%.

The core business has put in a solid year, with new business volumes up 14%, net fund inflows 27% higher and value of new covered business significantly higher by 44%. Importantly, new covered business margin has also increased (from 2.58% to 2.87%).

Sanlam’s equity value per share is R64.44, up from R59.20 the year before. The company is trading at a slight discount to book value. Return on group equity value per share was 13.9% in 2021.

Depressingly, Sanlam includes a note in the outlook section regarding an expectation of further waves of infection. Modest discretionary reserves will be maintained in relation to this risk.

Sanlam does not expect the new business growth rates achieved in 2021 to be repeated in 2022. The group also expects equity markets to normalise in 2022 after a major recovery year in 2021, which will also impact growth rates.

The share price jumped nearly 6% in morning trade, as the market showed its appreciation for the consistency of this financial services giant.