With shares in Old Mutual sitting at their lowest level since the South African insurer floated ten years ago, there was little in yesterday’s full-year results to nudge them higher.

True, the company’s FGD surplus – the capital cushion it is obliged to retain by regulators – has handled the financial market turbulence better than expected, falling only £100 million since the end of October to £700 million. That resilience, together with £600 million of cash and unused banking facilities, means that Old Mutual has been able to avoid a feared rights issue.

But the price of not tapping shareholders is that they are having to do without a dividend for the foreseeable future: the payout, which would have cost £360 million, is unlikely to be reinstated until 2010 at the earliest.

Meanwhile, Old Mutual’s perpetually troublesome US life business notched up a $679 million loss last year, pulling group operating profits down a worse than expected 38 per cent to £999 million.

There had been hopes that the US operations would be sold. However, Julian Roberts, Old Mutual’s new chief executive, cautioned, quite reasonably, that selling such assets in present market conditions would only destroy shareholder value. The recent experience of AIG would seem to confirm as much.

This is not to say that Mr Roberts is maintaining the status quo. In his restructuring plan set out yesterday, he contends that the company is spread too thinly – it is in too many countries and too many business lines where it lacks scale – and requires greater centralisation. That means selling its Australian operations, closing down in Hong Kong, pulling its long-term savings businesses together under a single management team and forging closer ties between its South African interests. The clear implication is that Old Mutual is more likely to raise its stake in Nedbank than sell the 55 per cent of the bank it already owns.

None of that will assuage the big concern: namely, the exposure of Old Mutual’s US investment portfolio to £14 billion of corporate bonds. It is already sitting on £1.8 billion of unrealised losses, but the scope for defaults and writedowns poses a clear risk to its credit rating.

For that reason, 37½p, or less than four times 2009 earnings, and a steep 68 per cent discount to its reported book value, appears no more than fair. Pass.

IMI

A day after Rotork attested to the strength of demand for oil and gas equipment, IMI, also a supplier of valves to the energy sector, emerged with much the same message. Sales from that niche were up an above-forecast 10 per cent over the past three months.

But IMI is a conglomerate and the businesses that account for the remaining three quarters of its sales have come under severe pressure since the end of November. Overall revenues are down 15 per cent, with those in its fluid power operation, which supplies hydraulic components for cars and trucks and production-line gadgetry for factories, off a hefty 30 per cent.

That IMI’s shares held firm in the face of such tidings might be considered odd, especially given their outpacing of the FTSE all-share in recent months. But that would be to ignore IMI’s ability to maintain its dividend at last year’s 20.7p, which at yesterday’s price provides an 8.1 per cent yield.

The company comfortably upheld its payout through the 2001 downturn. With net debt a manageable £300 million, or barely more than last year’s operating profits, and cash conversion strong, there is good reason to believe it can repeat that feat.

Further, IMI has been quick to adjust costs to weakening demand. It has already cut 10 per cent of its workforce since December and yesterday’s £35 million restructuring programme should further dampen the effect of its sector’s otherwise acute operational gearing. The short-term outlook is grim. But at 255½p, or seven times 2009 earnings, IMI is worth holding for income alone.

Sportingbet

Only the most hardened curmudgeon could find fault with yesterday’s numbers from Sportingbet. The online bookmaker reported a 35 per cent jump in second-quarter underlying operating profits to £10.1 million and it continues to regain the ground lost in September 2006 when the US internet gambling ban wiped out two thirds of its business. Its geographical diversification means it no longer relies too heavily on any single market and further expansion into South Africa and Romania underscores that strategy.

The star performers were Greece and Spain, where revenues were up 83 per cent and 16 per cent respectively, while Eastern Europe was up 44 per cent. Conversely, Turkey is being scaled back because of doubts over the legality of internet gambling – one of its employees faces possible prosecution – while in Australia its high-rolling telephone punters are being hit by the financial crisis. Poker also continues to decline as players migrate to the greater liquidity offered by rivals that are defying the ban and still targeting US gamblers.

Many investors have been attracted by the prospect of a settlement with the US Department of Justice (DoJ), which in turn shortens the odds of industry consolidation. But as Andy McIver, Sportingbet’s chief executive, admits, the DoJ has plenty on its plate with cases such as the Madoff scandal to investigate, so a resolution may yet be months away. The shares have nearly doubled since October’s low but with net cash of £27 million and profits still rising, at 40p, or eight times earnings, they have farther to go. Buy on weakness.

Explore Markets

• United States

• Europe

• Japan

• China

• Russia

• The Gulf

• India

• Africa

Times Recommends

• Toyota recalls 437,000 cars including Lexus
• Myners says bonuses are bleeding pension funds
• Japanese company faked safety reports on seats