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LIBERTY HOLDINGS LIMITED - Operational Update for the nine month period ended 30 September 2019

Release Date: 21/11/2019 17:20
Code(s): LBH     PDF:  
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Operational Update for the nine month period ended 30 September 2019

Liberty Holdings Limited
Registration number 1968/002095/06
Incorporated in the Republic of South Africa
Share code: LBH
ISIN code: ZAE000127148
("Liberty Holdings" or "the Group")
LIBERTY HOLDINGS LIMITED


OPERATIONAL UPDATE FOR THE NINE MONTH PERIOD ENDED 30 SEPTEMBER 2019

SUBDUED LONG-TERM INSURANCE INDEXED NEW BUSINESS SALES GROWTH AND STRONG
ASSET MANAGEMENT EXTERNAL CLIENT CASH INFLOWS IN A TOUGH CONSUMER
ENVIRONMENT.

Group long-term insurance indexed new business sales increased by 4% compared to the nine months
to 30 September 2018 (the comparative period). Group net external third-party client cash inflows of
R16.8 billion reflected a significant increase over comparative period inflows of R6 billion. Group total
assets under management of R765 billion has grown by 7% since 31 December 2018.

The SA Retail business continued to be constrained by the prevailing tough consumer environment in
South Africa. The Liberty Corporate and Liberty Africa Insurance businesses have however seen an
improvement in new business inflows. Focus on sales efforts and addressing the mix of new business
volumes and margin across all business lines is continuing, together with strict discipline in managing
the expense base.

Improved STANLIB South Africa investment performance has continued to support increased external
third-party client cash inflows.

The Group remains well capitalised. The Solvency Capital Requirement cover of Liberty Group Limited,
the Group’s main long-term insurance licence, remained at a level similar to 30 June 2019, at the upper
end of the target range of 1.5 to 2.0 times at 30 September 2019.


South African Insurance Operations

SA Retail

Indexed new business sales of R4 806 million were 2% above the comparative period. Recurring
premium and single premium new business sales increased relative to the comparative period by 2%
and 3% respectively.

Net customer cash outflows amounted to R392 million, compared to inflows of R484 million in the nine
months to 30 September 2018. The decrease was predominantly attributable to higher outflows in
respect of investment business.

Liberty Corporate

Liberty Corporate indexed new business of R820 million was 6% above the comparative period, with
recurring premium new business up 7%. Single premium new business was up 3% on the comparative
period. Net cash outflows of R980 million were above comparative period outflows of R909 million due
mainly to increased umbrella scheme member withdrawals aligned to economic trends in South Africa.


South African Asset Management

STANLIB South Africa

In the STANLIB South Africa business, assets under management amounted to R567 billion compared
to R549 billion at 31 December 2018. Net external third-party client cash inflows increased to
R20.5 billion from R14.1 billion in the comparative period, supported by increased flows from retail and
institutional clients. Non money market net cash inflows grew to R16.8 billion from R8.2 billion in the
comparative period. Money market net cash inflows of R3.7 billion were below comparative period
inflows of R5.9 billion.

Africa regions

Liberty Africa Insurance

Indexed new business increased to R355 million from R256 million in the comparative period, reflecting
positive new business growth with a shift in mix towards recurring premium business.

STANLIB Africa

Assets under management in the STANLIB Africa business amounted to R53 billion compared to
R51 billion at 31 December 2018, with net external third-party client cash outflows of R3.2 billion,
reflecting an improvement compared to outflows of R8.6 billion in the comparative period. The
comparative period included the loss of a large mandate in the Southern African region.


Operations under ownership review

Subsequent to the financial results for the six months ended 30 June 2019, further progress has been
made with the disposal of operations under ownership review, with sale agreements being concluded
(subject to conditions precedent being met) for both the STANLIB Botswana and STANLIB Kenya
operations. These disposals will not have a material impact on the financial results of the Group for the
year ending 31 December 2019.


Conclusion

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.

This operational update for the nine month period ended 30 September 2019 has not been audited or
reviewed by the Group's auditors.



Queries:

Investor Relations
Sharon Steyn 011 408 3063
www.libertyholdings.co.za

21 November 2019

Sponsor
Merrill Lynch South Africa (Pty) Limited

Date: 21/11/2019 05:20:00
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