Liberty Group first-half results

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Liberty Group first-half results

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Published Date: 2017-08-07 | Source: INCE|Community | Author: Stephen Gunnion

Liberty Group first-half results

LIBERTY SHIP STARTS TO TURN; INVESTORS NOT CONVINCED

Shares fall 6% after first-half profit slumps 30%

The weak economy is hindering plans to return Liberty Group to more profitable growth. While a number of missteps have weighed on its recent performance, newly-installed chief executive David Munro also blames tough market conditions. He says the life assurer and asset manager has now prioritised initiatives that will be felt immediately by customers - and hopefully investors too.

Munro's been at the helm of Liberty for a little over two months, after previous CEO Thabo Dloti quit over a disagreement with the group's board on a turnaround strategy. So the former head of Standard Bank's investment banking division has had little influence on the first-half results to end June. He's tasked with plugging the holes though and ensuring the once mighty company doesn't fall further behind its peers and profits don't continue to dwindle.

Already, Munro says action undertaken before he was parachuted in by an anxious controlling shareholder in May are bearing fruit. At first glance you wouldn't think so with normalised headline earnings per share down 30% at 456.7c. However, they show an improvement on the second half of last year - when they came in at a significantly weaker 254.5c a share. Liberty's stock fell 7% at its worst on Friday, before closing 6.1% lower at R105.50.

While Munro concedes the numbers remain disappointing, sales volumes and net cash inflows are showing positive growth. Trouble is, the new business the group is writing is less profitable than before. While group new business sales of R3.9 billion are 10% higher, the value of new business fell, resulting in a new business margin of 0.4%, down from 1.4%.

Asset manager STANLIB has borne the brunt of weak equity markets in the first half of the year, with a poor investment performance. Earnings from STANLIB South Africa fell R134 million, while STANLIB Africa reported a loss.

Munro says the immediate focus is to cut costs, restore the value of new business and margin, reduce complexity in the business and improve customer experience.



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