Good performance lifts Liberty operating earnings to R2.2bn
CAPE TOWN – Financial services firm Liberty Holdings lifted normalised operating earnings a healthy 10 percent to R2.2 billion in the year to December 31, reflecting good operational performance and higher equity investment returns despite weak markets.
Strong performances were reported, particularly in Stanlib South Africa and the Africa regions. The final dividend was raised 5 percent to 436 cents.
Chief executive David Munro said in a presentation yesterday that some challenges had included increasing net outflows in the industry due to the weak economy; rising geopolitical tensions in other African territories; and global technology trends that were changing client expectations for service platforms.
The Shareholder Investment Portfolio earnings of R1.01bn, versus R250 million previously, had benefited from improved market returns, particularly in foreign and local equities in 2019, growth in assets under management and stringent cost controls, said Munro.
He said Liberty was watching the spread of the coronavirus closely as it might impact the global economy.
It had already impacted global trade and it could result in a spike in mortality for insurers, Munro said. However, the virus was not in any of the markets where the group operated.
Normalised headline earnings of R3.21bn were 42 percent up on the previous year. Normalised return on equity was 14 percent compared to 10.1 percent in 2018.
Death and disability payments made by Liberty in 2019 increased by 10 percent to R10.5bn and annuity payments rose by 9 percent to R7.8bn.
Headline earnings of R3.25bn, including a positive adjustment of R55m from the accounting mismatch on the consolidation of Liberty Two Degrees, were 23 percent above 2018 headline earnings of R2.65bn.
Normalised group equity value per share increased by 7 percent to R147.82 per share. The value of new business increased 10 percent to R407m.
Long-term insurance indexed new business of R8.12bn was 2 percent above 2018.
Management focus remained on improving the client and adviser experience, delivering Stanlib’s investment performance in the top quartile, concluding the remaining operations under ownership review, and optimising the relationship with the Standard Bank Group.
Liberty's share price closed 1.64 percent lower at R98.41 on the JSE on Thursday.