| Fri 8 Aug 2008, 17:09 | | LBH - Liberty Holdings Limited - Unaudited interim results for the six months |
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LBH
LBH
LBH - Liberty Holdings Limited - Unaudited interim results for the six months
ended 30 June 2008
LIBERTY HOLDINGS LIMITED
Registration number 1968/002095/06
Alpha Code: LBH
ISIN Code: ZAE000004032
Incorporated in the Republic of South Africa
("Liberty Holdings")
Unaudited Interim Results For The Six Months Ended 30 June 2008
Commentary on results
Liberty Holdings Limited (Liberty Holdings) is the holding company of Liberty
Group Limited (Liberty Group). Liberty Holdings carries on no business other
than that related to its investment in Liberty Group. At 30 June 2008 Liberty
Holdings held a 50,23% interest in Liberty Group (31 December 2007: 51,19%).
Shareholders are consequently referred to the interim results announcement
published by Liberty Group on 6 August 2008 (details of its review of operations
by segment and prospects are available at www.liberty.co.za), the results of
which are consolidated into Liberty Holdings.
Standard Bank Group Limited (Standard Bank) has acquired 98,93% of Liberty
Holdings in terms of an offer to Liberty Holdings` minority shareholders.
Further particulars of the transaction are set out in the note on related
parties below.
As announced on the securities exchange news service on 21 July 2008 and 6
August 2008, Liberty Group is considering the merits of implementing a holding
company structure which would facilitate its strategic intent to achieve a
position where the immediate listed holding company of Liberty Group and its
significant operating companies wholly owns these operations, and is not a
registered long-term insurer.
Liberty Holdings and Standard Bank have been approached by Liberty Group to
consider facilitating this structure by allowing Liberty Holdings to become such
a listed holding company. If such holding company structure were implemented,
this would entail existing Liberty Group shareholders, other than Liberty
Holdings, exchanging their Liberty Group shares for an economically equivalent
shareholding in Liberty Holdings via a scheme of arrangement. Standard Bank,
Liberty Holdings, Liberty Group and their advisers are considering this proposal
as well as other alternatives in relation to Liberty Holdings and a further
announcement will be made in due course. Until finality has been reached on
these deliberations, the Liberty Holdings board has decided to defer any
declaration of an interim dividend.
Accounting policies and restatements
The results have been prepared in accordance with International Financial
Reporting Standards (IFRS) including full compliance with IAS 34 Interim
Financial Reporting. There have been no changes to accounting policies from
those applied for the year ended 31 December 2007.
The group has chosen to early adopt the amendments to IAS 1 Presentation of
Financial Statements. This amendment requires a statement of comprehensive
income which is more relevant as it helps eliminate current mismatches in the
income statement between the measurement of policyholder attributable assets and
liabilities.
Comprehensive income for a period includes profit or loss for that period plus
other income or expense items that are not recognised in profit or loss as
required or permitted by other standards. The standard does not change the
recognition or measurement of specific transactions but only where they are
presented in the primary statements. All owner changes in equity remain
recognised in the statement of changes in equity.
Accordingly, the statement of comprehensive income now includes the foreign
currency translation of subsidiaries, the revaluation of owner-occupied
properties and the related taxation expenses with the profit or loss for the
period.
The 30 June and 31 December 2007 statements have been restated to reflect the
above change.
No prior year restatements to the group`s assets, liabilities or equity are
required as a consequence of the amendment.
Derek Cooper
Chairman
8 August 2008
Liberty Holdings Limited
(the Company)
Incorporated in the Republic of South Africa
(Registration number: 1968/002095/06)
Alpha code: LBH
ISIN code: ZAE000004032
Transfer Secretaries
Computershare Investor Services (Pty) Limited
(Registration number: 2004/003647/07)
Ground Floor, 70 Marshall Street, Johannesburg 2001
PO Box 61051, Marshalltown, 2107
Telephone +27 11 370 5000
Sponsor
Merrill Lynch South Africa (Proprietary) Limited
Global Markets & Investment Banking Group
Condensed group statement of financial position
as at 30 June 2008
Unaudited Unaudited Audited
30 June 30 June 31 December
2008 2007 2007
Rm Rm Rm
Assets
Investments 204 623 206 996 209 417
Intangible assets 1 047 1 234 1 137
Reinsurance assets 742 851 820
Defined benefit pension fund 165 162
employer surplus
Deferred taxation 24 75 51
Prepayments, insurance and other 3 941 4 741 3 528
receivables
Cash and cash equivalents 3 739 2 068 4 688
Other assets 885 997 844
Total assets 215 166 216 962 220 647
Liabilities
Policyholders` liabilities 180 493 182 817 186 137
Insurance contracts 126 846 129 655 131 552
Investment contracts with 3 233 2 883 3 353
discretionary participation
features
Financial liabilities under 50 414 50 279 51 232
investment contracts
Financial liabilities 2 380 2 718 2 484
Third party liabilities arising 8 326 8 560 8 040
on consolidation of mutual funds
Deferred taxation 3 246 3 366 3 484
Insurance and other payables 6 153 6 166 5 993
Other liabilities 1 723 1 728 2 018
Total liabilities 202 321 205 355 208 156
Equity
Ordinary shareholders` funds 5 433 4 894 5 288
Minority interests 7 412 6 713 7 203
Total equity 12 845 11 607 12 491
Total equity and liabilities 215 166 216 962 220 647
Condensed group statement of comprehensive income
for the six months ended 30 June 2008
Unaudited Unaudited Audited
30 June 30 June 31
December
2008 2007 2007
Rm Rm Rm
Total revenue 12 842 28 309 50 173
Net insurance benefits and (6 769) (17 577) (30 683)
claims
Fair value adjustment to (218) (4 217) (6 281)
policyholders` liabilities
under investment contracts
Fair value adjustment on third (286) (1) (189)
party mutual fund liabilities
Acquisition costs associated (1 263) (1 355) (2 894)
with insurance and investment
contracts
Expenses (2 593) (2 152) (4 689)
Preference dividend in (172) (136) (274)
subsidiary
Profit on sale of subsidiaries 2 6
Equity accounted earnings from 16 17 51
joint ventures
Defined benefit pension fund 162
employer surplus
Profit before taxation 1 557 2 890 5 382
Taxation (604) (1 225) (2 105)
Total earnings 953 1 665 3 277
Other comprehensive income
Owner-occupied properties - 22 21 127
fair value adjustment
Foreign currency translation 17 16 16
Income tax relating to (7) (6) (41)
components of other
comprehensive income
Total comprehensive income 985 1 696 3 379
Total earnings attributable to:
Equity holders 410 798 1 463
Minority interests 543 867 1 814
953 1 665 3 277
Total comprehensive income
attributable to:
Equity holders 425 814 1 516
Minority interest 560 882 1 863
985 1 696 3 379
Reconciliation of total
earnings to headline earnings
attributable to equity holders
Total earnings attributable to 410 798 1 463
equity holders
Profit on sale of subsidiaries (1) (3)
Headline earnings 410 797 1 460
Insurance operations 386 495 921
Asset management operations 121 106 229
Shareholders` fund investments (97) 196 310
Total and fully diluted Cents Cents Cents
earnings per share
Basic 883,3 1 721,1 3 155,3
Headline (1) 883,3 1 718,4 3 149,0
(1) Liberty Holdings elected to early adopt the long-term insurance industry
exemption contained in the addition to circular 8 of 2007 dated 22 February 2008
which allows for no headline earnings adjustment in respect of realised or
unrealised remeasurements of investment properties.
Condensed statement of changes in group shareholders` funds
for the six months ended 30 June 2008
Unaudited Unaudited Audited
30 June 30 June 31
December
2008 2007 2007
Rm Rm Rm
Opening balance at 1 January 12 491 11 921 11 921
Excess purchase price over NAV (2 194) (2 198)
of STANLIB
Total comprehensive earnings 985 1 696 3 379
Increase in minorities 11
resulting from acquisition of
STANLIB Limited
Capital reduction in subsidiary (369) (207)
Ordinary dividends (341) (319) (503)
Minority share of subsidiary (308) (312)
dividend
Preference dividend (1) (1) (2)
Unincorporated property (49) (64) (77)
partnerships - minority
movements
Black Economic Empowerment 60 54 98
transaction
Share-based payments 33 27 54
Treasury shares 36 (51) (521)
Formation of Liberty Life 2
Assurance Uganda
Issue of shares in subsidiary 846 846
Shareholders` funds 12 845 11 607 12 491
Ordinary shareholders` funds 5 433 4 894 5 288
Minority interests 7 412 6 713 7 203
Condensed group statement of cash flows
for the six months ended 30 June 2008
Unaudited Unaudited Audited
30 June 30 June 31 December
2008 2007 2007
Rm Rm Rm
Operating activities (622) 5 467 7 989
Investing activities 152 (9 517) (7 711)
Financing activities (479) 751 (957)
Net decrease in cash and cash (949) (3 299) (679)
equivalents
Cash and cash equivalents at 4 688 5 242 5 242
beginning of period
Cash and cash equivalents 166 166
acquired through business
acquisition
Cash and cash equivalents (41) (41)
disposed through business
disposal
Cash and cash equivalents at end 3 739 2 068 4 688
of period
Commitments
as at 30 June 2008
Unaudited Unaudited Audited
30 June 30 June 31 December
2008 2007 2007
Rm Rm Rm
Capital commitments 1 228 288 1 090
Business acquisitions 263 386
Equipment 302 89 216
Investment and owner-occupied 663 199 488
property
Under contracts 566 33 25
Authorised by the directors but 662 255 1 065
not contracted
1 228 288 1 090
Funding for the 30 June 2008 commitments will be from shareholders` funds and
where applicable with proportionate recovery from minority interests.
Related parties
as at 30 June 2008
In addition to the nature of the related party transactions as described in note
41 to the 31 December 2007 annual financial statements, the following related
party transaction have subsequently occurred:
1) As announced on the securities exchange news service on 27 March 2008,
Liberty Group, with effect from 31 March 2008, acquired from a wholly-owned
subsidiary of Standard Bank, 50% of the issued share capital and loan claims of
Fountainhead Property Trust Management Limited and Evening Star Trading 768
(Pty) Limited for a consideration of R186,2 million.
2) On 27 May 2008, Standard Bank announced its intention to acquire the
remaining issued ordinary share capital of Liberty Holdings.
The consideration offered was 21 925 cents per ordinary share. Full details of
the offer were contained in the circular issued to Liberty Holdings` ordinary
shareholders on 26 June 2008. The offer closed on 18 July 2008.
The acceptances of the offer exceeded nine tenths of the offer shares (other
than those held by subsidiaries of Standard Bank). Accordingly Standard Bank has
the right to invoke the provisions of Section 440K(1) of the Companies Act (Act
61 of 1973) to compulsorily acquire the Liberty Holdings ordinary shares of the
holders of such shares who did not accept the offer. Standard Bank is currently
considering whether to exercise this right.
Standard Bank will advise the holders of the remaining ordinary shares of its
decision in relation to Section 440K(1) of the Act in due course, but not later
than 18 September 2008.
The holders of the remaining ordinary shares registered as such on Friday, 18
July 2008, were given the required notice of their rights in terms of Section
440K(3) of the Act on 31 July 2008, which gives them the right to require
Standard Bank to acquire their ordinary shares on the same terms as the offer.
Investments in ordinary shares held by subsidiaries of Liberty Holdings in the
group`s holding company are as follows:
Market
Number value Ownership
`000 Rm %
Standard Bank Group Limited 38 857 2 945 2,54
Retirement Benefit Obligations
as at 30 June 2008
Post-retirement medical benefit
Liberty Group operates an unfunded post-retirement medical aid benefit for
employees who joined the group prior to 1 July 1998.
As at 30 June 2008, the Liberty Group post-retirement medical aid benefit
liability was R292 million (31 December 2007: R293 million).
Defined benefit retirement funds
The Liberty Group operates a number of defined benefit pension schemes on behalf
of employees. All these funds are closed to new membership and are well funded
with no deficits reported.
These results are available at www.libertyholdings.co.za
Date: 08/08/2008 17:09:09 Produced by the JSE SENS Department.
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