Our opinion on the current state of CLIENTELE(CLI)

Clientele Life (CLI) is a small insurance company selling short- and long-term policies and underwriting insurance products. Their products are sold through agents and brokers as well as through tele-sales.

On 3rd November 2023, the company announced that it had acquired 1Life Insurance for R1,914bn, to be paid by issuing 117,815,756 ordinary shares in Clientele.

In its results for the year to 30th June 2024, the company reported headline earnings per share (HEPS) and net profit down 4%. The company said, "The total net insurance service result increased by 4% to R171.6 million. The total net investment result of R254.9 million is double the prior year figure. Net insurance finance income is 19% higher than the prior year at R207.3 million. Revenue from contracts with customers increased by 11% to R380.4 million."

In a trading statement for the six months to 31st December 2024, the company estimated that HEPS would increase by between 2% and 17%. The company said, "...shareholders are encouraged to appreciate the noteworthy impact of the once-off recognition of a bargain purchase gain of R469 million arising from the fair value measurement at the date of acquisition of 1Life."

The share trades on a P:E of 12,7, which seems cheap to us. The share is heavily traded enough for most private investors. In our opinion, this share continues to represent reasonable value at the current P:E. It should benefit directly as and when the South African economy improves as a result of the newly appointed government of national unity (GNU).