Liberty sustains upward growth trend

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“The group’s performance for the first half of 2014 continues to reflect the positive momentum in operating earnings and customer new business as evidenced in 2013. Return on group equity value at 15 per cent remains above our medium-term expectations,” said [DATA LBH:Liberty Holdings Limited] in a statement.

(READ MORE: Liberty’s 2013 financial results one of their best)

For the six months ended 30 June 2014, the group’s long term insurance operations indexed new business grew by 10 per cent to 3.4 billion rand supported by strong single premium investment sales.

Net customer cash inflows also rose dramatically from 1.9 billion rand in June 2013 to 4.5 billion rand this period including a 912 million rand contribution from the LISP platform, a joint venture between the group and Standard Bank which was launched in October 2013.

The LISP platform offers direct investments into a range of collective investment schemes and is available to retail customers through a cost efficient platform which has attracted nearly one billion rand in net new investments.

The group said that its Shareholder Investment Portfolio (SIP) reported a gross performance of 5.2 per cent supported by contributions from the local and international markets.

BEE normalised group equity value per share increased by 14.7 per cent to 130.42 rand, reflecting a 2.5 billion rand return on opening group equity value.

“The group’s recent positive performances are as a result of management consistently delivering to strategy within a comprehensive governance structure,” continued the statement.

Liberty’s Retail South Africa segment’s headline earnings rose from 771 million rand last year to 795 million rand this year due to the performance of the LISP platform, reflecting an earnings increase of 10 per cent.

The group’s loyalty programme “Own your life REWARDS” has grown membership to over 25 000 for the period.

In Liberty’s Corporate Segment, headline earnings rose significantly by 62 per cent to 84 million rand due to a price increase in asset based management fees and cost control.

As a result, Indexed new business grew by 45 per cent to 423 million rand while net customer cash

Liberty’s East and Southern African insurance operations (excluding South Africa) contributed 28 million rand to the group’s headline earnings due to improved performances by its Kenyan individual life business and higher margin business underwritten in its Namibian and Ugandan operations.

Long-term insurance however was impacted by lower bancassurance sales in Botswana resulting in an overall margin decrease of 5.7 per cent.

 “Recurring premium business is flat on last year partly due to Standard Bank’s decision to reduce new micro loan advances which have impacted credit life sales under the bancassurance agreement and partly due to an increasingly demanding consumer environment,” said the group.

Liberty Health posted a headline loss of 22 million rand, an improvement from the loss in 2013 of 26 million rand.

(READ MORE: Liberty to acquire remaining shares in health business)

On the 1 August 2014, the group acquired all outsider shareholder equity interest in Liberty Health and loan claims for 133 million rand in an attempt to provide them with greater flexibility to restructure the division.  

LibFin Markets however contributed 108 million rand to group headline earnings, bringing LibFin asset under management for the period to 39 billion rand, compared to 36 billion rand for 2013.

STANLIB, Liberty’s asset management firm, reported headline earnings of 284 million rand, a five per cent increase from the previous period bringing total assets under management to 561 billion rand.

 STANLIB’s South African business posted lower earnings growth while its African operations’ earnings rose by 11 per cent.

Liberty declared an interim dividend of 232 cents per ordinary share.

“The group’s first half 2014 performance reinforces our demonstrated ability to sustainably grow the business in line with our strategy. We continue to perform above our medium term targets and they are well positioned to attract higher levels of new business within our targeted margin ranges,” concluded the company.

(WATCH VIDEO: Video: Liberty Holdings CEO Bruce Hemphill stepping down)