Cape Town - Liberty Holdings [JSE:LBH] reported a 4% rise in group normalised headline earnings to R4 128m in its full-year results to end-December 2015 on Friday.
"Liberty Holdings Limited has produced solid results for the year ended December 31 2015, supported by good growth in operating earnings from individual arrangements, Liberty Corporate and LibFin markets, driven by positive net customer cash flows, good cash generation from the insurance book and efficient capital management," the company said in a statement.
The headline earnings boost represents 7% growth in normalised operating earnings and a 2% drop in earnings from LibFin Investments – Shareholder Investment Portfolio.
Headline earnings from the group’s South African retail insurance operations were 11% up on the prior year to R1 869m. The main contributors to the positive earnings performance were returns on a higher asset base together with ongoing positive persistency and risk variances.
Net customer cash flows were positive at R7.8bn (including the Gateway LISP). However, thanks to the challenging consumer environment, indexed new business sales showed marginal growth at 1% over 2014, with risk sales volumes most impacted.
Liberty Corporate's earnings of R219m showed a 29% rise from 2014."The strong increase in earnings was attributable to good underwriting experience, higher fee income and lower new business strain following significantly lower large single premium liability driven solutions business," said Liberty.
Indexed new business of R790m was down 34% on the prior period, with net cash outflows of R891m.
Liberty Africa Insurance earnings of R25m were below the prior year of R59m, showing the negative impact of poor East African investment market performance in both the long-and short-term insurance businesses.
While earnings from the life insurance operations were slightly up on 2014, the short-term insurance business was impacted by high claims on the retail motor book and tax legislation changes. Indexed new business in the life businesses was 39% up at R304m following significant contributions from Zambia, Namibia, Uganda, Botswana and Kenya.
The value of new business was up 67% to R45m, with the increase in new business margin to 6.6% supported by sales of higher margin products. Liberty said it is evaluating business opportunities for acquisitions throughout sub-Saharan Africa.
Liberty’s share of Liberty Health’s headline loss reduced significantly to R19m from on the previous year (2014: R30m). Results were assisted by good contributions from the risk business, aided by rand weakness which offset the underperformance in the South African administration business due to lower growth in the serviced medical aid schemes.
Effective August 1 2015, Liberty acquired the remaining non-controlling interest in Total Health Trust Limited in Nigeria for R142m.
CEO Thabo Dloti said: “As a group we... remain actively focused on adapting our business model to accommodate a number of significant regulatory developments while increasing our responsiveness to opportunities in our chosen markets.”
Liberty Holdings shares were up 7.35% at 11:00, trading at R122.70.