Liberty says its positioned for growth

The company pointed out that it was still looking for opportunities in West Africa‚ where it was under-represented.

Liberty posted interim earnings‚ for the six months ended June‚ with its retail SA business and asset management showing solid performances.

"The earnings seem pretty solid‚" a Johannesburg-based analyst said. "They are much better than I thought they would have been. The new business volumes in retail seemed to have slowed quite a lot. It will be interesting to see what other life businesses have done. But the health and direct financial services units are still struggling," the analyst said.

The slowdown in new business volumes points to retailers' observations that consumers are under pressure. On the other hand‚ it also raises the question of whether Liberty is pricing aggressively enough or perhaps is selling to selective customers it sees as likely to be with the company for a long time.

On Thursday (1 August)‚ the Standard Bank-owned Liberty Holdings said its black economic empowerment (BEE) normalised operating earnings for the six months ended June had risen 30.8% to just more than R1bn. BEE normalised headline earnings per share increased 6% to R6.03.

Products, innovation

In the insurance division‚ the retail SA business‚ which is the engine for Liberty Holdings‚ posted a 30.6% rise in earnings to R798m. The retail unit's growth was attributed to product innovation and the strengthening of distribution channels.

The emerging direct insurance business remained saddled with losses‚ though it narrowed these by 25% to R27m. There was an expectation that the direct financial services business‚ which is made up of Frank.net‚ would move closer to breaking even.

Long-term indexed new business insurance sales rose 12% to R3.1bn.

In the institutional segment‚ Liberty Corporate reported a 36.8% rise in earnings to R52m‚ while Liberty Africa insurance swung to a profit of R18m compared with a loss of R5m in the corresponding period last year. Liberty Health also lost money although the losses were narrowed from R45m in the interim period of 2012 to R26m this year.

Liberty Health has no scale yet. Some analysts have asked why Liberty is still focusing on this unit. However‚ one analyst said selling it now would not return much for the group. Instead it would open up opportunities for other market participants such as Discovery and Momentum Health.

LibFin markets posted a 45.5% fall in earnings to R54m.

Asset manager Stanlib posted 22.2% growth in earnings to R270m. Liberty Properties posted a 32% fall in earnings to R17m and LibFin investments reported a 20.1% decline to R656m. Group asset management net cash inflows were up 66% to R9bn.

Liberty Holdings declared an interim dividend of 212c per share‚ a 10.4% rise on the previous period.