| Wed 6 Aug 2003, 8:38 | | Liberty Group Limited - Interim Results |
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Liberty Group Limited - Interim Results
Release Date: 06/08/2003 08:01:01 Code(s): LGL
Liberty Group Limited - Interim Results
Liberty Group Limited
Interim results for the six months ended 30 June 2003
(Registration number 1957/002788/06)
(Alpha code LGL)
(Issuer code LIBU)
(ISIN code ZAE000024543)
(Incorporated in the Republic of South Africa)
FEATURES
* Indexed new business premiums +6%
- Individual +2%
- Corporate +30%
* Increase in value of new business +6%
* New business margin 18%
* Net cash inflow from insurance operations of R1,7 billion +6%
* Capital adequacy cover 2,6
* Continued gains in market share
* Embedded value per share of R53,42 -3%
* Headline earnings per share -46%
* Dividend maintained 162,0 cents
COMMENTARY ON RESULTS Prolonged poor financial markets and demanding economic
conditions have adversely affected the life insurance industry.
Investor uncertainty has also resulted in lower demand for insurance products,
especially single premium investments. For Liberty these conditions resulted in
slower sales and negatively impacted the earnings of the Group.
Headline earnings of R355,9 million were 46,2% down. The rate of increase in
indexed new business slowed to 6,1% while margins on new business increased
slightly to 18,4%. The embedded value per share decreased by 3,4% to R53,42
since 31 December 2002.
The core business remains strong with cash inflows from insurance operations
rising to R1,7 billion for the six months to 30 June 2003. This, together with
Liberty"s healthy capital position and positive longer-term outlook, resulted
in the interim dividend being maintained at 162,0 cents per share.
LIFE FUND OPERATING SURPLUS The life fund operating surplus decreased by 55,1%
from R563,0 million for the first six months of 2002 to R252,7 million in 2003.
The life fund operating surplus in respect of 2002, although negatively
impacted by lower investment returns, was enhanced by releases from the life
fund amounting to some R290 million (before tax), the bulk of which related to
capitalised profits as a result of actual expenses being lower than the
actuarial assumption. Costs per policy, aided by high new business volumes,
reflected no year-on-year increase in 2002. In determining the life fund
operating surplus for 2003, not only did lower investment returns further
reduce earnings, but expenses returned to normal and new business cases were
also lower, resulting in costs per policy increasing roughly in line with the
actuarial expectation for 2003 of 7,4%. Unlike 2002, no profits from reduced
expenses have been included in this half year"s earnings.
The investment return of -3,6% calculated on the proxy portfolio (to determine
shareowners" share in 10% of capital bonuses) compares with -0,4% for the same
period in 2002. Management fees earned on policy-owners" assets were also down
as a result of lower monthly policy-owner values during 2003 compared with
2002.
EARNINGS HEADLINE EARNINGS Headline earnings of R355,9 million decreased by
46,2% from R661,5 million in 2002. The decrease in headline earnings is
primarily attributable to the reduction in the life fund operating surplus.
Income from financial services activities decreased by R25,0 million from R97,3
million in 2002 to R72,3 million in 2003. The shareowners" trading portfolio
recorded a loss of R4,5 million for 2003 compared with a profit of R35,5
million in 2002. Earnings from STANLIB were down R8,3 million or 26,1%.
Earnings of Liberty Group Properties and Liberty Ermitage increased by R6,8
million (78,2%) and R6,6 million (71,7%) respectively. Dividends from listed
investments remained flat on the corresponding period last year. Income from
other investments increased by 50,9% to R129,0 million for 2003 from R85,5
million in 2002 as a result of income on higher cash balances and preference
shares in 2003 compared with 2002. The preference dividend of R45,0 million to
Standard Bank increased by 60,7% and is directly attributable to the increase
in embedded or simple product bancassurance sales (mainly credit life and
funeral policies).
TOTAL EARNINGS A goodwill impairment charge of R62,4 million in respect of
Hightree Financial Services has been raised as the expected growth from this
acquisition is not yet evident in its financial results to date. Furthermore, a
strategic decision has been taken not to pursue additional offshore
acquisitions at this time, thereby enabling management in South Africa to
re-focus their efforts on domestic operations and to explore entry into other
markets including Africa.
Investment gains attributable to shareowners" funds for 2002 included R432,8
million realised in respect of the sale of the Liberty entities into STANLIB in
that period.
Refer to the footnote on the summarised group income statement for the impact
of the implementation of AC 133 on total earnings.
NEW BUSINESS Indexed new business increased by 6,1% from R1 676,4 million in
2002 to R1 779,0 million for 2003. Total new business premiums written in 2003
amounted to R5 437,0 million, which represents a decrease of 4,8% against 2002.
Indexed Individual new business increased by 1,9% to R1 453,0 million while
indexed Corporate new business increased by 29,9% to R326,0 million.
New recurring premiums increased by 11,8% from R1 227,9 million in 2002 to R1
372,6 million for 2003 as a result of the continued success of the Excelsior
retirement annuity products and the growth in Corporate Benefits business.
New business premiums from Bancassurance increased by 2,2% to R1 207,6 million
with complex products (mostly single premium, high advice products) decreasing
marginally to R1 045,1 million and embedded products increasing by 22,9% to
R162,5 million.
On an indexed basis new Bancassurance premiums were 1,5% lower than in 2002.
Agency indexed new business increased by 6,7% while Franchise decreased by 4,9%
and Non-group Broker business increased by 19,9%.
Market share for new recurring individual premiums increased to 24,8% at 31
March 2003 from 23,6% at 31 December 2002 compared with all life offices,
while market share for individual single premiums increased to 22,6% at 31
March 2003 compared with 20,2% at 31 December 2002.
Notwithstanding the increase in market share, new single premiums of R4 064,4
million decreased by 9,4% compared with R4 484,6 million written in 2002. The
popularity of offshore investments in 2002 has been replaced, to a lesser
extent, with lower risk, guaranteed capital bonds and property backed
products.
VALUE OF NEW BUSINESS AND NEW BUSINESS MARGIN The value of new business
increased by 5,6% to R261,7 million. The overall new business margin net of the
Standard Bank Joint Venture agreement of 18,4% increased from 17,6% at 30 June
2002 and is lower than the margin of 20,3% at 31 December 2002.
NET CASH FLOW FROM INSURANCE OPERATIONS Net cash inflow from insurance
operations (net premium income and inflows from investment contracts less
claims, policy- owners" benefits and payments under investment contracts)
amounted to R1 730,2 million for 2003 compared with R1 636,5 million in 2002.
This level of inflow reinforces the value of looking after policy-owners"
interests and proactively capturing maturities. All insurance business units
experienced net cash inflows.
Individual business surrenders and maturities increased by 6,9% while total
claims, policy-owners" benefits and payments under investment contracts
relating to Corporate business decreased by 4,1% compared with 2002.
EMBEDDED VALUE Embedded value decreased by 3,3% from R15 126,6 million at 31
December 2002 to R14 622,5 million at 30 June 2003 on the back of poor market
performance and a reduction in the fair value of financial services entities.
Embedded value per share, similarly, decreased by 3,4% from R55,28 at 31
December 2002 to R53,42 at 30 June 2003. The net value of life business in
force decreased marginally from R5 700,4 million at 31 December 2002 to R5
645,6 million at 30 June 2003.
CAPITAL ADEQUACY Liberty"s capital adequacy multiple, which is amongst the
highest in the industry, was 2,6 at 30 June 2003 (both on the existing method
of calculation as well as the FSB"s new proposed basis). This compares with 3,0
at 31 December 2002 and 3,4 at 30 June 2002 and provides comfort given the
current uncertainty in investment markets.
STANLIB In June this year Standard Bank and Liberty announced that agreement
had been reached to sell a combined 25,2% of the issued ordinary shares of
STANLIB to an empowerment consortium led by Safika with effect from 1 July
2003.
This transaction reaffirms Liberty and Standard Bank"s commitment to
transformation in South Africa while at the same time enhancing STANLIB"s
value. We are confident that our new partners will aid in growing the business.
Headline earnings of STANLIB of R47,1 million decreased by 26,1% year-on-year.
Normalised headline earnings (eliminating the effect of merger costs) were
6,3% up from R61,2 million in 2002 to R65,1 million for 2003. STANLIB Asset
Management contributed R26,1 million (2002: R22,9 million) and STANLIB Wealth
Management contributed R39,0 million (2002: R38,3 million) to the total.
Liberty"s 50% share of STANLIB"s headline earnings amounted to R23,5 million,
26,1% lower than in 2002.
STANLIB Asset Management generated a net cash inflow of R4,0 billion in the six
months to 30 June 2003, increasing its total assets under management to R131,8
billion despite weak investment markets. STANLIB Wealth Management"s gross
sales for the six months ended 30 June 2003 reached R19,9 billion while net
cash inflows amounted to R4,0 billion. R2,0 billion of STANLIB Wealth
Management"s net cash inflows were additional assets for STANLIB Asset
Management to manage.
PROSPECTS
Liberty will, for the foreseeable future, focus on its existing
domestic operations. Emphasis will be placed on cost reduction, efficiency and
service levels. Entry into other market segments will be explored in the months
to come. Some confidence is slowly returning to the investment market and
interest rates look set to reduce. The new generation life range offering
"Lifestyle Protector" is being launched this month. All of this bodes well for
the second half of the year, although future earnings will continue to be
impacted by the world and local financial markets.
DIVIDEND Notice is hereby given that the interim ordinary dividend No. 75 of
162 cents per share has been declared in respect of the year ending 31 December
2003, thus maintaining the interim dividend for 2003 at the same level as for
2002.
The important dates pertaining to this dividend are:
Last day to trade cum dividend on the JSE and LSE. Friday, 22 August 2003
First trading day ex dividend on the JSE and LSE. Monday, 25 August 2003
Record date. Friday, 29 August 2003
Payment date. Monday, 1 September 2003
Share certificates may not be dematerialised or rematerialised between Monday,
25 August 2003 and Friday, 29 August 2003 both days inclusive. Payment in
respect of dividends for shares listed on the London Stock Exchange will be
converted from rand to sterling equivalent on Monday, 1 September 2003.
Where applicable, dividends in respect of certificated shareowners will be
transferred electronically to shareowners" bank accounts on payment date. In
the absence of specific mandates, dividend cheques will be posted to
shareowners. Shareowners who have dematerialised their shares will have their
accounts with their CSDP or broker credited on Monday,
ACCOUNTING POLICIES
The accounting policies adopted comply with South African Statements of
Generally Accepted Accounting Practice as well as the South African Companies
Act, 1973. These accounting policies are consistent with those applied at 31
December 2002, except for:
* The determination of the life fund operating surplus, capital adequacy
requirement, embedded value and value of new business, which reflect the
Statutory Actuary"s best estimate for interim reporting purposes. A full
actuarial valuation is not performed at the half year.
* The adoption of the accounting statement on Financial Instruments:
Recognition and Measurement (AC 133), which became effective for financial
years commencing on or after 1 July 2002.
In accordance with this statement, in respect of financial assets,
policy-owners" assets have been designated as "held at fair value (through net
income)" and shareowners" trading assets have been designated as "held for
trading". All other shareowners" assets have been designated as available for
sale. Assets held at fair value (through net income) are valued at fair value
and investment gains or losses are included in net income. Due to the fact that
these assets back policy-owner liabilities, the gains or losses are
subsequently transferred to or from the life fund liabilities. Assets held for
trading are valued at fair value and investment gains or losses are included in
headline earnings. Available-for-sale assets are valued at fair value and
unrealised gains or losses are accounted for against equity. Realised gains or
losses are included in income, but below headline earnings.
Insofar as liabilities are concerned and in accordance with this statement
read together with the draft guidance on the application of AC 133 to
liabilities arising from long-term insurance contracts as approved by the
Accounting Practices Committee, certain liabilities have been designated as
"insurance contracts" while others have been designated as "investment
contracts". Insurance contracts continue to be valued in terms of the
Financial Soundness Valuation (FSV) basis with the actuarially determined
liabilities now being disclosed separately from liabilities under investment
contracts on the balance sheet.
Investment contracts are valued at fair value as described in AC 133 and the
draft guidance.
There is currently no International Financial Reporting Standard for
insurance, although the International Accounting Standards Board has a project
in progress to address this issue. Finalisation is not expected for a number
of years to come. Solutions are consequently being implemented in order to
limit significant temporary changes to the treatment of investment and
insurance contracts within South Africa, while adhering to the principles
contained in AC 133. The impact on the results of the Liberty Group for the
six months to 30 June 2003 in respect of the adoption of AC 133 is described
in the footnote to the income statement. There is however an ongoing process
to develop guidance for the long-term insurance industry, both from an
accounting and actuarial perspective which could impact results in the future.
1 September 2003.
Derek Cooper Myles Ruck
Chairman Chief Executive
6 August 2003
Summarised Group balance sheet (unaudited) (audited)
30 June 31 December
2003 2002
Rm Rm
Assets
Investments 81 807,0 81 369,3
Owner-occupied properties 643,9 625,1
Goodwill 86,5 158,2
Other intangible assets 59,4 35,6
Tangible assets 345,3 321,7
Current assets 3 625,0 3 750,2
Total assets 86 567,1 86 260,1
Capital, reserves and liabilities
Shareowners" funds 8 265,7 8 588,1
Minority interests 1,0 1,0
Life fund 73 803,7 73 700,3
Liabilities under insurance contracts 50 526,1 73 595,6
Liabilities under investment contracts 23 224,2
Deferred capital gains tax 53,4 104,7
Convertible bonds 1 713,7 1 946,8
Retirement benefit obligation 152,0 143,0
Deferred tax 79,2 120,8
Current liabilities 2 551,8 1 760,1
Total capital, reserves and liabilities 86 567,1 86 260,1
Capital adequacy requirement 3 143,3 2 856,6
Capital adequacy requirement: times covered 2,6 3,0
Summarised Group income statement (unaudited)
Six months ended 30 June
2003 2002 %
Rm Rm Change
Life fund operating surplus 252,7 563,0 (55,1%)
Revenue earnings attributable to
shareowners" funds 148,2 126,5 17,2%
Preference dividend in subsidiary (45,0) (28,0) 60,7%
Headline earnings 355,9 661,5 (46,2%)
Goodwill amortisation and impairment (71,7) (8,0) 796,3%
Investment gains attributable to
shareowners" funds (1) 12,1 601,8 (98,0%)
Capital gains tax attributable to
shareowners" investment gains (2,5) (56,0) (95,5%)
Total earnings 293,8 1 199,3 (75,5%)
Headline return on equity 8,8% 16,9%
Per share details cents cents
Headline earnings per share
Basic 130,0 242,5 (46,4%)
Fully diluted 129,8 241,2 (46,2%)
Total earnings per share
Basic 107,3 439,7 (75,6%)
Fully diluted 107,2 422,8 (74,7%)
Weighted average number of shares in issue
(millions) 273,7 272,8
Total number of shares in issue (millions) 273,8 273,1
Fully diluted weighted average number of
shares (millions) 274,1 298,6
(1) With the implementation of AC 133, unrealised investment gains/(losses) on
available-for-sale assets are taken directly to equity with effect from 1
January 2003. Only realised gains/(losses) on available-for-sale assets
are shown in the income statement (below headline earnings). For the six
months ended 30 June 2003 unrealised losses amounting to R338,5 million
have been taken directly to equity and realised gains of R12,1 million are
reflected in the income statement.
The comparatives have not been restated. Both unrealised losses and
realised gains amounting to R90,2 million and R692,0 million respectively
for the six months ended 30 June 2002 are included in the income statement
comparative.
Group embedded value (unaudited) (audited)
30 June 31 December
2003 2002 %
Rm Rm Change
Shareowners" net assets 8 265,7 8 588,1 (3,8%)
Net value of life business in force 5 645,6 5 700,4 (1,0%)
Value of life business in force 5 777,8 5 837,0 (1,0%)
Cost of solvency capital + (132,2) (136,6) (3,2%)
Financial services entities fair value
adjustment (vii) - Bases and assumptions 711,2 838,1 (15,1%)
Embedded value 14 622,5 15 126,6 (3,3%)
Embedded value per share R53,42 R55,28 (3,4%)
+ The cost of solvency capital arises from the difference between the net
after-tax expected return on shareowners" assets backing the capital adequacy
requirement and the risk discount rate. The capital adequacy requirement is
backed fully by equity investments.
Value of new business and new business margins (unaudited)
Six months ended 30 June
2003 2002 %
Rm Rm Change
Value of new business written in the year 261,7 247,9 5,6%
Gross of cost of solvency capital 267,7 255,9 4,6%
Cost of solvency capital (6,0) (8,0) (25,0%)
New single premiums 4 064,4 4 484,6 (9,4%)
New recurring premiums net of natural
increases (2003: R354,6 million;
2002: R264,8 million) 1 018,0 963,1 5,7%
New business index net of natural increases 1 424,4 1 411,6 0,9%
Value of new business as a percentage of
indexed new business (new
business margin) 18,4% 17,6% 0,8%
New business index is an internationally accepted measure calculated as the sum
of new business annualised recurring premiums plus 10% of new annualised single
premiums for the period.
Embedded value (losses)/profits (unaudited)
Six months ended 30 June
2003 2002
Rm Rm
Embedded value at the end of the period 14 622,5 15 477,5
Less capital raised (4,8) (23,3)
Plus dividends paid 317,4 408,6
Less embedded value at the beginning of the period (15 126,6) (14 767,4)
Embedded value (losses)/profits (191,5) 1 095,4
Return on shareowners" net assets (annualised) (4,5%) 28,0%
Return on embedded value (annualised) (2,5%) 15,4%
Embedded value profits, being the change in the embedded value over the period
increased by any dividends paid during the period and decreased by any capital
raised during the period, provide a measure of the group"s financial
performance over the period and is analysed in the following table.
Analysis of embedded value (losses)/profits (unaudited)
Six months ended 30 June
2003 2002
Rm Rm
Investment return on shareowners" net assets and
financial services entities" fair
value adjustment (344,4) 138,1
Translation losses in respect of foreign assets (40,8) (96,1)
Other investment returns on shareowners" assets (303,6) 234,2
Expected return on value of life business (iv) - Bases
and assumptions 362,6 360,4
Investment experience variation on life business (258,7) (182,2)
Other experience variations (29,0) 336,4
Changes in assumptions 19,3 111,8
Value of new business 261,7 247,9
Allowance for current and future Secondary Tax on
Companies (STC) - (60,0)
Changes in modelling methodology (viii) - Bases and
assumptions (203,0) 143,0
Embedded value (losses)/profits (191,5) 1 095,4
Bases and assumptions (unaudited) (audited)
30 June 31 December
2003 2002
The principal bases and assumptions used are:
(i) Future investment returns on the major classes
were set with reference to
the market yield on medium-term South African government stock. The
investment returns used are:
Government stock 9,5% 10,8%
Equities 11,5% 12,8%
Property 10,5% 11,8%
(ii) The risk discount rate has been set equal to the investment
return on equity assets 11,5% 12,8%
(iii) Maintenance expense inflation rate 5,5% 6,8%
(iv) The expected return on value of life business is obtained by applying
the previous year"s discount rate for the full analysis period to the
value of life business in force at the beginning of the year and the
current year"s discount rate for half of the analysis period to the
value of new business.
(v) Tax has been allowed for on the Four Fund Tax basis with tax rates of
30%. Full tax relief on expenses to the extent permitted was assumed.
Capital Gains Tax (CGT) has been taken into account in the embedded
value. STC was allowed for based on the expected dividend cover and
future dividend credits.
(vi) Other bases, bonus rates and assumptions:
In general, parameters reflect best estimates of future experience,
consistent with the Financial Soundness Valuation basis used by the
Statutory Actuary, excluding any first- or second-tier margins. However,
in contrast to the valuation basis assumption, the embedded value does
make allowance for automatic premium and benefit increases.
(vii) Basis of calculation of financial services entities fair value
adjustment: The financial services entities fair value adjustment
reflects the excess of the fair value over the value of the tangible
net assets of entities as included in the shareowners" funds.
This adjustment consisted of the following:
(unaudited) (audited)
30 June 31 December
2003 2002
Rm Rm
Liberty Group Properties
(Proprietary) Limited 233,0 240,0
Liberty Ermitage Jersey Limited 125,0 190,4
STANLIB Limited 353,2 407,7
711,2 838,1
These items were calculated as follows:
* In the case of Liberty Group Properties (Proprietary) Limited
and Liberty Ermitage Jersey Limited a price earnings ratio
multiplier was applied to the net after tax recurring
earnings of the subsidiaries. The multipliers used were 10
and 12 (2002: 10 and 15) respectively.
In the case of STANLIB Limited the R353,2 million excess
* above net asset value effectively impairs the value of
STANLIB by R54,5 million since 31 December 2002.
(viii) The amount of R203,0 million shown for changes in modelling methodology
arises mainly from:
* allowing more accurately for premium increases and paid-up
policieson individual business; and
* allowance for reinsurance in respect of corporate business in line
with actual practice.
Summarised Group cash flow statement (unaudited)
Six months ended 30 June
2003 2002
Rm Rm
Cash flows from operating activities 2 603,4 1 651,0
Cash flows from investing activities (2 343,2) (1 785,1)
Cash flows from financing activities 8,1 22,4
Net increase/(decrease) in cash and cash equivalents 268,3 (111,7)
Cash and cash equivalents at beginning of period 273,5 912,1
Foreign exchange movements on cash balances (8,2) (13,7)
Cash and cash equivalents at end of period 533,6 786,7
New Recurring premium Single premium
Business (unaudited) (unaudited)
Six months ended Six months ended
30 June 30 June
2003 2002 2003 2002
Rm Rm Rm Rm
Individual
business 1 149,4 1 044,9 3 036,3 3 804,7
Corporate
business 223,2 183,0 1 028,1 679,9
Total new
business 1372,6 1 227,9 4 064,4 4 484,6
Change 11,8% (9,4%)
Total premium
(unaudited)
Six months ended
30 June
2003 2002 %
Rm Rm Change
Individual
business 4 185,7 4 849,6 (13,7%)
Corporate
business 1 251,3 862,9 45,0%
Total new
business 5 437,0 5 712,5 (4,8%)
New
business
index 1 779,0 1 676,4 6,1%
Net cash flow from Individual Corporate
insurance operations Business Business
(unaudited) (unaudited)
Six months ended Six months ended
30 June 30 June
2003 2002 2003
Rm Rm Rm Rm
Net premium income and
inflows from investment
contracts 6 060,4 6 080,2 1 943,7 1 471,5
Single 2 901,8 3 550,4 1 028,1 654,5
Recurring 3 158,6 2 529,8 915,6 817,0
Claims, policy-owners"
benefits and payments
under investment
contracts (5 201,7) (4 797,7) (1 072,2) (1 117,5)
Net inflow 858,7 1 282,5 871,5 354,0
Total
(unaudited)
Six months ended
30 June
2003 2002 %
Rm Rm Change
Net premium income and
inflows from investment
contracts 8 004,1 7 551,7 6,0%
Single 3 929,9 4 204,9 (6,5%)
Recurring 4 074,2 3 346,8 21,7%
Claims, policy-owners"
benefits and payments
under investment
contracts (6 273,9) (5 915,2) 6,1%
Net inflow 1 730,2 1 636,5 5,7%
Analysis of shareowners" Group
funds funds invested
(unaudited) (audited)
30 June 31 December
2003 2002
Rm Rm
Charter Life (excluding life fund
operating surplus) 726,1 698,2
Financial services activities
1199,3
1 232,1
Listed investments 1 126,2 1 250,6
Edcon 165,8 117,4
Gold Fields 235,4 315,1
Metro Cash and Carry 218,8 210,7
SABMiller 489,8 585,7
Other 16,4 21,7
Other investments 5 214,1 5 407,2
Cash, preference shares and unit
trusts 1 340,1 1 177,5
Foreign assets 1 800,8 2 037,6
Convertible bonds (1 713,7) (1 946,8)
Unlisted investments 236,6 253,4
Fixed assets and working capital 1 233,7 1 931,9
Share of pooled portfolios 2 316,6 1 953,6
Management expenses
Normal taxation
Secondary tax on companies on
ordinary dividends
Total 8 265,7 8 588,1
Analysis of shareowners" funds Group net revenue
earned
(unaudited)
Six months ended
30 June
2003 2002
Rm Rm
Charter Life (excluding life fund
operating surplus) 25,4 17,1
Financial services activities 1
46,9 80,2
Listed investments 24,6 24,9
Edcon 4,3 1,9
Gold Fields 6,2 4,6
Metro Cash and Carry
SABMiller 13,9 17,9
Other 0,2 0,5
Other investments 129,0 85,5
Cash, preference shares and unit
trusts 61,7 54,1
Foreign assets 51,1 81,7
Convertible bonds (62,4) (100,0)
Unlisted investments 9,6 21,3
Fixed assets and working capital
Share of pooled portfolios 69,0 28,4
Management expenses (39,2) (25,8)
Normal taxation (5,0) (11,2)
Secondary tax on companies on
ordinary dividends (33,5) (44,2)
Total 148,2 126,5
Analysis of shareowners" funds
Group investment
gains/(losses)
(unaudited)
Six months ended
30 June
2003 2002
Rm Rm
Charter Life (excluding life fund
operating surplus) 2,5 14,4
Financial services activities
(57,8) 352,4
Listed investments (123,2) 387,0
Edcon 48,4 23,3
Gold Fields (79,7) 356,6
Metro Cash and Carry 8,1 26,6
SABMiller (95,9) 15,2
Other (4,1) (34,7)
Other investments (147,9) (152,0)
Cash, preference shares and unit
trusts 1,9 1,8
Foreign assets (236,8) (501,7)
Convertible bonds 246,5 468,0
Unlisted investments (32,1) (145,8)
Fixed assets and working capital
Share of pooled portfolios (127,4) 25,7
Management expenses
Normal taxation
Secondary tax on companies on
ordinary dividends
Total (326,4) 601,8
Statement of changes in Group shareowners" funds (unaudited)
Six months ended 30 June
2003 2002
Rm Rm
Shareowners" funds at beginning of period 8 588,1 8 345,8
Total earnings 293,8 1 199,3
Unrealised investment losses attributable to
shareowners" funds (338,5)
Capital gains tax attributable to shareowners"
unrealised investment losses 47,4
Ordinary dividends (317,4) (408,6)
2001 Final dividend No. 72 of 150 cents -
LDR 20 March 2002 (408,6)
2002 Final dividend No. 74 of 116 cents -
LDR 20 March 2003 (317,4)
Translation difference relating to equity component of
the
convertible bonds (12,5) (23,7)
Subscriptions for shares 4,8 23,3
Shareowners" funds at end of period 8 265,7 9 136,1
Commitments (unaudited) (audited)
30 June 31 December
2003 2002
Rm Rm
Capital commitments 317,2 450,8
Under contracts 302,1 297,2
Authorised by the directors but not contracted 15,1 153,6
Operating lease commitments 136,5 156,4
Less than 5 years 94,8 114,7
5 to 10 years 41,7 41,7
Total commitments 453,7 607,2
Group figures above include the Group"s share of commitments of joint
ventures amounting to R93,0 million (31 December 2002: R85,3 million).
The expenditure will be financed by available bank facilities, existing
cash resources and funds internally generated.
TRANSFER SECRETARIES:
Computershare Limited
(Registration number 1958/003546/06)
70 Marshall Street, Johannesburg, 2001.
PO Box 1053, Johannesburg, 2000.
Telephone +27 11 370-5000
