South African life insurance company, Liberty Holdings posted its interim results this morning, with the market reacting negatively to the 10% increase in headline earnings per share. The group’s share price is currently down 0.76% (10h00). Liberty has a current market cap of R37.8 billion and a price to earnings ratio of 8.46. Its share price is up 13.5% over the last year.
Results overview:Â
- BEE normalised operating earnings up 12%
- BEE normalised headline earnings up 10%
- BEE normalised headline EPS (cents) 664,7 versus 602,7
- BEE normalised return on equity 19.9%
- Return on BEE normalised group equity value 14.7%
- Value of long-term insurance new business up 13%
- Retail long-term insurance new business margin 2%
- Long-term insurance indexed new business up 10%
- Customer net cash inflows R16 billion
- Liberty Group Limited CAR cover 2.58 times
- Interim dividend up 9%
Liberty’s normalised headline earnings increased 10% to R1.9 billion, representing a 12% growth in operating earnings and an 8% improvement in earnings from the Shareholder Investment Portfolio.
The group’s long-term insurance operations saw a 10% increase in indexed new business to R3.4 billion. Net customer cash inflows currently stand at R4.5 billion. Asset management operations attracted R11.6 billion in net external customer cash inflows, which were up 29% from the same period last year. Accordingly, assets under management increased 5% to R639 billion from 31 December 2013.
Commenting on the group’s performance, CEO Thabo Dloti said: “We have delivered another good set of results with solid operational growth. We continue to maintain sales momentum in our targeted customer segments through product innovation and distribution management; we are improving our asset management capability and delivering on our expansion objectives in sub-Sahara Africa, supported by our bancassurance relationship with Standard Bank. Our management of risks is excellent and our costs well managed which is contributing positively to our operating earnings.”
Looking forward
Dloti, appointed as Chief Executive from March of this year, concludes, “Although the Group has delivered well against stated objectives, we believe there is still far greater potential for growth. We have defined our focus areas and are clear about the shifts we need to make to achieve this growth. With a vision of becoming the trusted leader in insurance and investment in Africa, we aim to continue our focus in the retail affluent market; build a business of scale in the corporate market; continue to strengthen our asset management capability in SA and the rest of the continent; and will further optimise our relationship with Standard Bank. I am confident that we have a strong platform, sufficient expertise and a proven track record of delivery, to build a business for the future in a changing regulatory, economic and consumer environment.”
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