Tuesday, 27 August 2013 - 20:00
Seed Weekly - Liberty Holdings ? Growing Steadily
Liberty Holdings Ltd (LBH) is a group of companies offering a wide range of solutions in the financial services industry, including long-term insurance, investments and asset management, health risk business, and administration services.
Liberty Life was listed on the JSE in 1962 with assets just exceeding R 1m with Guardian Royal Exchange (GRE) acquiring a 75% controlling interest in 1964. Liberty Holdings was formed in 1968 to consolidate GRE’s South African operations, and the Group managed various further acquisitions over the years.
The Retail SA division includes Liberty’s core life insurance business, tasked with developing, marketing and distributing insurance products to individuals across SA, and LibFin, which forms part of the group’s risk management structure and manages market, credit and liquidity risk originating in the life insurance business.
The Institutional and Asset Management division has three components:
• STANLIB is an asset management business. As on 30 June, STANLIB’s total assets under management and administration stood at R 468bn.
• Liberty Properties develops and manages direct property assets across the retail and commercial sectors. These properties are used in many of Liberty’s products and policies.
• Liberty Corporate provides pension, provident, investment and risk solutions for groups of company employees. This division is also responsible for the administration of retirement funds and the provision of financial advice and intermediary services.
The Growth division includes those operations expected to grow much faster than Liberty’s core operations:
• Liberty Africa provides distribution for Liberty’s insurance, asset management, property, and health products on the continent. The division has established a footprint in 15 African countries, with expansion into West Africa one of the goals for 2013.
• Liberty Health provides health insurance through the Liberty Blue product, with about one million lives in Africa now serviced by the business unit.
• Direct Financial Services was launched in November 2010 and includes three operations, of which the life insurer Frank.Net is the most significant.
Latest Financial Results
Liberty released its interim results for the six months ended 30 June 2013 during August, and the market showed its concern with the slow growth in some areas when the share price dropped 3% on the same day.
Basic EPS and BEE normalised HEPS increased by only 6%, while BEE normalised operating earnings increased by 31% and BEE normalised Return on Equity stayed more or less constant at 22%. The interim dividend increased by 10% to 212 cents. Direct Financial Services and Liberty Health are still loss-making while Liberty builds up scale to leverage the investment in systems and processes.
Although these figures have obviously disappointed shareholders, these losses have decreased significantly compared to the same period last year.
The bulk of Liberty’s earnings came from the retail life insurance business, where earnings increased by 34%. Net cash inflows were strong at R 2.2bn, and the new business margin for the Retail SA business showed significant improvement from 1.7% to 2.0%.
The other major source of earnings was STANLIB, where earnings increased by 22%. Net inflows for the first six months amounted to R 9bn.
Liberty is very attractively valued, trading on a PE ratio of 9 compared to the ALSI’s 18.3 and offering an attractive DY of 4.7% (2.8% for the ALSI).
Liberty is included in Seed’s Model Share Portfolios on the basis of the attractive current valuation and the potential upside in streamlining existing operations and achieving economies of scale within its Africa operations. Seed’s Model Share Portfolios are suitable for investors, with a minimum of R 1m to invest, through personal accounts at a stock broker.
The Seed Equity Fund, a smart beta unit trust that blends value and momentum portfolios, also has an allocation to Liberty. The share is a top 10 holding and has both value and momentum attributes. The unit trust is available to smaller investors – for more information please contact us.
Cor van Deventer
021 914 4966
Tue, 27 Aug 2013
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U.S. Defense Secretary Chuck Hagel said U.S. forces in the
region are "ready to g
Revenue for the year shot up to R10.1 billion (2012: R7.9 billion). Operating profit dropped to R166 million (2012: R414.2 million), while profit for the year attributable to equity holders of the company slumped to R26.5 million (2012: R266.8 million). Furthermore, headline earnings per sha
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Prime Minister David Cameron
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Ali Larayedh said on Tuesday he was ready to step aside for a
caretaker cabinet to hold new elections, but would not create a
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World Markets (Spot Prices)
|JSE Top 40||17:00||38720.33||-182.99||-0.47%|
|JSE Indust 25||17:00||49155.24||-325.84||-0.66%|
|Rand / Dollar||19:58||10.4081||0.0929||0.90%|
|Rand / Pound||19:55||16.1400||0.0908||0.57%|
|Rand / Euro||19:55||13.9400||0.1392||1.01%|
|Rand / NZD||19:58||8.1079||0.0048||0.06%|
|Rand / AUD||19:55||9.3350||0.0120||0.13%|
|Yen / Dollar||19:59||97.0750||-1.3830||-1.40%|
|Euro / Dollar||19:59||0.7468||-0.0005||-0.07%|
|Dollar / Euro||19:59||1.3391||0.0022||0.17%|
|Pound / Dollar||19:55||0.6434||0.0017||0.26%|
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The JSE Today
* Includes all listed instruments on the JSE
|Index Name||RP||Move||% Move|
|Financial & Ind. 30||51,996.79||-349.67||-0.67%|
|Oil & Gas ||36,423.68||99.13||0.27%|
|Oil & Gas Producers ||19,584.34||53.30||0.27%|
|Basic Materials ||27,400.69||-69.70||-0.25%|
|Forestry & Paper ||26,912.41||-691.83||-2.51%|
|Industrial Metals ||24,338.68||-87.20||-0.36%|
|General Industrials ||122.29||-.11||-0.09%|
|Consumer Goods ||53,542.57||-113.93||-0.21%|
|Automobiles & Parts ||8,654.76||4.53||0.05%|
|Health Care ||68,616.51||-1048.78||-1.51%|
|Index Name||RP||Move||% Move|
|Food Producers ||69,935.34||-710.08||-1.01%|
|Personal Goods ||1,023.73||-13.49||-1.30%|
|Consumer Services ||9,264.28||-110.50||-1.18%|
|General Retailers ||56,143.98||-1105.82||-1.93%|
|Travel & Leisure ||5,520.61||-40.36||-0.73%|
|Support Services ||2,644.91||-60.08||-2.22%|
|Non-life Insurance ||47,726.53||.00||0.00%|
|Life Insurance ||29,613.79||-490.49||-1.63%|
|General Financial ||2,880.95||-43.29||-1.48%|
|SHARIAH TOP40 ||3,710.93||-10||-0.28%|
|FTSE/JSE SHARIAH ALL||3,806.99||-12||-0.31%|
|FTSE JSE Fledgling ||5,709.86||36||0.64%|
|FTSE/JSE Alt X ||996.11||2||0.15%|
|SA LISTED PROPERTY ||479.22||0.32%|
|CAPPED PROPERTY ||404.03||0.51%|
|FTSE/JSE RAFI 40||8,544.42||-39||-0.45%|
|Capped Top 40||20,446.55||-106||-0.52%|
|Capped All Share||21,801.82||-107||-0.49%|
|JSE TABACO ||6,829.08||25||0.36%|
Click here for the Sharenet Index Summary page
Latest Consensus Changes**
|BTI||BRITISH AM. TOBACCO PLC||BUY||26/08/2013|
|TRU||TRUWORTHS INTERNATIONAL L...||BUY||26/08/2013|
|EXX||EXXARO RESOURCES LIMITED||HOLD||26/08/2013|
|TFG||THE FOSCHINI GROUP LTD||HOLD||26/08/2013|
|KAP||KAP INDUSTRIAL HLDGS||HOLD||23/08/2013||
|Expected||Company Name||Fin. Date|
|28/08/2013||GPL-PREF||June 2013 (Final)|
|28/08/2013||GRANPRADE||June 2013 (Final)|
|28/08/2013||M-R-HLD||June 2013 (Final)|
|28/08/2013||METAIR||June 2013 (Interim)|
|28/08/2013||MUSTEK||June 2013 (Final)|
|SA CORP||26/08/2013||19/09/2013||30/09/2013||R 0.1628|
|SYNERGY B||26/08/2013||13/09/2013||23/09/2013||R 0.2663|
|SYNERGY A||26/08/2013||13/09/2013||23/09/2013||R 0.4234|
|ZURICH SA||01/08/2013||23/08/2013||02/09/2013||R 1.0000|
|ILE||Imbalie Beauty Ltd.||27/08/2013||Confirmed|
|RACC||RECM - Calibre Ltd.||28/08/2013||Confirmed|
|ACP||Acucap Properties Ltd.||28/08/2013||Confirmed|
|RACP||RECM - Calibre Ltd.||28/08/2013||Confirmed|
|ADR||Adcorp Holdings Ltd.||29/08/2013||Confirmed||
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