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S.Africa's Liberty puts some African units on chopping block
* Potential sales part of Liberty's turnaround plan
* Includes asset management units in parts of Africa
* Liberty earnings drop 17 pct in 2018
(Recasts, adds CEO interview, share reaction, more details)
By Emma Rumney
JOHANNESBURG, Feb 28 (Reuters) - South Africa's Liberty
Holdings is considering the potential sale of a number
of businesses bought in previous years as part of a since
abandoned, expansion-focused strategy.
The insurer, a unit of Standard Bank in the middle
of a turnaround plan, said on Thursday it had placed asset
management and short-term insurance operations in a number of
African countries, as well as health insurance arm Liberty
Health, under "ownership review".
It made the announcement while reporting a 17 percent drop
in headline earnings in 2018, which dampened progress in the
first full year of its turnaround strategy and prompted a 3
percent drop in its share price.
Liberty CEO David Munro said the move to review and
potentially sell some of the businesses would refine the
"It's these kind of steps that we're taking that will...
make sure that each of the businesses in the portfolio can
deliver growth for Liberty and our shareholders," he told
Reuters in a telephone interview.
He declined to give a time frame for possible sales, but
said negotiations were currently underway.
Munro took the helm in 2017 and has since then, with the
backing of Standard Bank, worked to slow the acquisition-fuelled
expansion drive which preceded his appointment to focus on
Liberty's home market - a move that had delivered rising profit.
The units under review have been deemed no longer central to
the new strategy, and include asset management operations in
Ghana, Uganda, Kenya and Botswana and short-term insurance
businesses in Malawi and Namibia.
Liberty's share price fell by around 3 percent on the news
that its headline earnings per share - the most widely watched
profit measure in South Africa - had fallen to 817.9 cents from
982.1 cents in 2017.
At 0926 GMT, it had recovered some losses to stand at 101.98
rand per share, down 1.7 percent.
Munro said the more salient part of the results was a 42
percent rise in normalised operating earnings, as this captured
the performance of its core operations - South African insurance
and asset management.
"We've made really significant progress in turning around
our business," he said, adding the results go a long way to
restoring confidence of shareholders.
The headline number was pulled down by a more than 80
percent slump in earnings in a portfolio Liberty uses to invest
the capital it has to hold against its insurance operations, to
250 million rand ($17.93 million).
Munro said this was the result of a "disastrous" year from
investors' perspective, characterised by market volatility and
Liberty announced on Wednesday that it had sold a
loss-making technology platform - one of the units on the
chopping block as part of the review - to Standard Bank.
($1 = 13.9437 rand)
(Reporting by Emma Rumney; Editing by Subhranshu Sahu/Sherry
Jacob-Phillips and Emelia Sithole-Matarise)
First Published: 2019-02-28 08:16:33
Updated 2019-02-28 11:37:57
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