Liberty Holdings is going back to the basics |

LIBERTY Holdings is divesting of its assets in African territories to focus on consolidating its South African portfolio as it grapples with subdued domestic economic growth.

In its results for the year to December 2018, Liberty yesterday reported a 17 percent drop in headline earnings per share to 817.9 cents from 982.1c in the previous period.

Headline earnings for 2018 amounted to R2.6 billion compared to R3.2bn the prior year.

The group said that it was selling its health insurance arm Liberty Health and asset management and short-term insurance operations in Ghana, Uganda, Kenya and Botswana and its short-term insurance businesses in Malawi and Namibia.

This was in addition to the sale of its loss-making technology platform, which supports its short-term insurance business to Standard Bank, the insurer and money manager’s parent, for R145 million.

In the period under review, the recorded loss attributable to the business from costs incurred in establishing the technology platform was R51m and the capitalised expenditure incurred up to December 31, 2018, was R94m.

Annuity payments made by Liberty in 2018 increased by 7 percent to R5.8bn and death and disability payments increased by 11 percent to R9.4bn.

Earnings of R52m reflected high death claims in the second half of the year and lower annuity and asset-based fee income.

Following repricing, the underwriting margin on the group risk book did, however, improve compared to 2017.

“They have struggled to reach profitability in their African Health operations. Selling these business off has not been a spur of the moment decision. To reach adequate scale in Africa would have required a lot of management time. Simplifying the business will help management execute a turnaround strategy,” Warwick Bam, a senior Analyst at Avior Capital Markets said.

Liberty declared a gross final dividend of 415c an ordinary share, which after deduction of the dividend tax rate of 20 percent would result in a net final dividend of 332c a share.

Liberty was little changed on the JSE yesterday, down 0.03 percent at R103.

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