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LIBERTY HOLDINGS LIMITED - Financial results for the six months ended 30 June 2019 Short form announcement

Release Date: 01/08/2019 07:10
Code(s): LBH LBHP     PDF:  
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Financial results for the six months ended 30 June 2019 – Short form announcement

Liberty Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1968/002095/06)
Share Code: LBHP     ISIN Code: ZAE000004040
Share code: LBH      ISIN code: ZAE0000127148
("Liberty Holdings" or "Group")

Financial results for the six months ended 30 June 2019 - Short form announcement

Operational earnings growth and improved investment market returns

Financial highlights:
                                                                                 30 June   30 June        %
Rm (unless otherwise stated)                                                        2019      2018   change
Profit before taxation                                                             3 734     2 480       51
Normalised headline earnings (1)                                                   2 013     1 332       51
Normalised headline earnings per share (cents)(1)                                  735,8     482,0       53
Headline earnings per share (cents)(2)                                             746,6     563,5       32
Basic earnings per share (cents)                                                   699,9     563,5       24
Normalised return on IFRS equity (%)(1)                                             17,7      12,1         
Normalised group equity value per share (R)(1),(3)                                143,96    138,98        4
Normalised return on group equity value (%)(1),(3)                                  14,0       4,7         
Solvency capital requirement cover of Liberty Group Limited (times covered)(3)      1,85                   
Embedded value of new business (3)                                                   171       142       20
New business margin (%)(3)                                                           0,9       0,7         
Interim dividend                                                                     276       276         

(1) Normalised: headline earnings, headline earnings per share, return on IFRS equity, group equity value per share and return on group
equity value. These measures reflect the economic reality of the consolidation of the listed Liberty Two Degrees REIT and the Black
Economic Empowerment transaction which differs from the required IFRS accounting treatment.

(2) Headline earnings includes the adjustment for the remeasurement of disposal groups classified as held for sale.

(3) Solvency capital requirement cover (effective from 1 July 2018) is the excess of assets over liabilities required by an insurer to ensure
that its assets remain larger than its liabilities with a 99.5% level of certainty over a one year time horizon, with assets and liabilities valued
in accordance with the Insurance Act, 2017. This replaces the capital adequacy requirement cover that was reported previously under the old
regime, hence no comparative information is provided. The comparative information related to normalised group equity value per share,
normalised return on group equity value, embedded value of new business (VoNB) and new business margin for June 2018 has been
disclosed using the new basis.

The group's strategy is underpinned by delivering exceptional client and adviser experiences. In
continuing to support our clients through their life journeys and fulfilling our promises to them,
death and disability payments made by Liberty in the first half of 2019 increased by 6,9% to
R5,0 billion and annuity payments increased by 8,6% to R3,9 billion.

The group's performance for the six months to 30 June 2019 reflects continued progress in
achieving our medium-term financial targets, with a 13,9% increase in normalised operating
earnings arising from the South African Insurance Operations and the STANLIB South Africa
business and significantly higher earnings of R922 million from the Shareholder Investment
Portfolio (SIP). This resulted in normalised headline earnings per share of 735,8 cents, a 52,7%
increase on the comparative period, and an annualised return on equity of 17,7% for
the period. Group net external third party client cash inflows increased significantly to
R10,6 billion, compared to R1,9 billion for the six months to 30 June 2018.

Group equity value per share increased from R138,98 in the comparative period to R143,96 and
the return on group equity value (RoGEV) increased from 4,7% at 30 June 2018 to 14,0%. The
higher RoGEV was attributable to the improved value of new business (VoNB) generated in the
period and supported by higher investment market returns.

The group's capital position remains strong, at the upper end of our target range, with the
Solvency Capital Ratio for Liberty Group Limited, the group's main long-term insurance licence,
at 1,85 times at 30 June 2019.

The group VoNB of R171 million was 20,4% up from R142 million in the comparative period with
margin improvement from 0.7% to 0.9%. This outcome was mainly attributable to product
enhancements and margin management supported by continued stringent cost discipline.

2019 Interim dividend

In line with the group's interim dividend policy of paying 40% of the prior full year dividend, the
board has approved and declared a gross interim dividend of 276 cents per ordinary share. The
interim dividend will be paid out of income reserves and is payable on Monday, 2 September
2019 to all ordinary shareholders recorded in the books of Liberty Holdings on the record date.

The dividend of 276 cents per ordinary share will be subject to a local dividend tax rate of 20%,
which will result in a net interim dividend, to those shareholders who are not exempt from paying
dividend tax, of 220,8 cents per ordinary share. Liberty Holdings' income tax number is
9050/191/71/8. The number of ordinary shares in issue in the company's share capital at the
date of declaration is 286 202 373.

The important dates pertaining to the dividend are as follows:

Last date to trade cum dividend on the JSE                  Tuesday, 27 August 2019
First trading day ex dividend on the JSE                    Wednesday, 28 August 2019
Record date                                                 Friday, 30 August 2019
Payment date                                                Monday, 2 September 2019

Share certificates may not be dematerialised or rematerialised between Wednesday, 28 August
2019 and Friday, 30 August 2019, both days inclusive. Where applicable, in terms of
instructions received by the company from certificated shareholders, the payment of the
dividend will be made electronically to shareholders' bank accounts on payment date.

In the absence of specific mandates, cheques will be posted to shareholders. Shareholders who
have dematerialised their shares will have their accounts with their CSDP or broker credited on
Monday, 2 September 2019.


Management's focus for 2019 remains on driving SA Retail performance and VoNB growth,
maintaining STANLIB's investment performance in the top quartile, concluding outcomes for
each of the group's operations under ownership review and continuing to maximise our
relationship with the Standard Bank Group.

We expect the South African economic environment to remain subdued for the remainder of
2019, however, we are confident that we are focusing on the right areas of the business to
create sustainable longer-term value for all stakeholders.

Short form statement

This short form announcement is the responsibility of the directors. It is only a summary of the
information contained in the full announcement and does not contain full or complete details.
Any investment decision should be based on the full announcement accessible from Thursday,
1 August 2019, via the JSE link and also available on the Company's website at

Copies of the full announcement may also be requested by contacting Investor Relations by
email at and are available for inspection at the Company's
registered office at no charge, weekdays during office hours.

The JSE link is as follows:

1 August 2019
Merrill Lynch South Africa (Pty) Limited

Date: 01/08/2019 07:10:00
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