Old Mutual, the insurance group, has announced a 29% increase in profits for the first half of the year compared to the same period in 2004. While the company attributed the growth to strong performance in its South African operations, Old Mutual spokespersons declined to comment on the proposed takeover of Swedish rival Skandia.

The group reported an operating profit of GBP554 million for the first half of 2005, a 29% increase compared to GBP428 million from the same period a year earlier. Particular highlights for the half-year included significantly improved life assurance and unit trust sales in Old Mutual’s South African business, and record cash flows from the company’s US Asset Management unit.

All of our businesses have shown strong organic growth during the first half of 2005, and returns on rising assets and embedded value are encouraging, said chief executive Jim Sutcliffe. Our strategy has delivered good earnings growth and we are well placed to take market opportunities as they arise.

The UK-based insurer, which generates nearly half of its earnings in South Africa, revealed in May that it was in talks to acquire financial services giant Skandia with the aim of building a diversified international business.

On releasing its financial results, however, Old Mutual declined to comment with regard to the Skandia transaction. We are continuing to have discussions and when we have something to say, we’ll say it, Mr Sutcliffe said in an interview with The Times.