Our opinion on the current state of 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 by tele-sales. In its results for the year to 30th June 2023 the company reported headline earnings per share up 15% and a return on average shareholders’ interest of 43%. The return on embedded value was 12%. The company said that the trading environment was characterised by a "...backdrop of a continuing challenging trading environment, characterised by low economic growth, ongoing load-shedding and challenges in the premium collections environment". On 3rd November 2023 the company announced that it had acquired 1Life Insurance for R1,914bn to be paid by the issue of 117,815,756 ordinary shares in Clientele. The share trades on a P:E of 7,49 which seems cheap to us. The share is heavily traded enough for most private investors. In our opinion, this share represents reasonable value at the current P:E. It should benefit directly as the South African economy improves.