| Wed 3 Mar 2004, 8:40 | | Liberty Group Limited - Audited Preliminary Result |
|
Liberty Group Limited - Audited Preliminary Results For The Year Ended 31
Release Date: 03/03/2004 07:11:11 Code(s): LGL
Liberty Group Limited - Audited preliminary results for the year ended 31
December 2003
Liberty Group Limited
(Registration number 1957/002788/06)
(Alpha code LGL)
(Issuer code LIBU)
(ISIN code ZAE000024543)
(Incorporated in the Republic of South Africa)
Audited preliminary results for the year ended 31 December 2003
Features:
Indexed new business premiums up 4,8%
New business margin maintained at 20%
Market share of new business increased during 2003
Net cash inflow from insurance operations of R4,5 billion
Headline earnings per share down 11,5%
Capital adequacy cover of 2,6
Embedded value per share of R57,58 up 4,2%
Total dividend for the year maintained at 278 cents per share
Commentary on results
Liberty"s results for 2003 benefited from the rally in both local and
international equity markets during the second half of the year despite the
strengthening of the Rand.
Although the long-term insurance industry experienced a challenging operating
environment in 2003, new business nevertheless increased by 3,2%, new business
margins were maintained at 20% and the group"s capital adequacy requirement was
covered 2,6 times by shareholders" funds. Customer service issues remain an area
of high focus. A keen focus on expense control resulted in recurring expenses of
the life companies being contained within the actuarial assumption on a per
policy basis. Embedded value per share increased by 4,2% to R57,58.
Notwithstanding the much-improved investment market conditions during the second
half of 2003, headline earnings of R949,1 million were 11,2% down on 2002 for
reasons outlined later in this report.
Net cash inflows from Liberty"s insurance business remained strong at R4 497,0
million. Despite a reduction of 11,2% in headline earnings, the final dividend
for 2003 has been maintained at 116,0 cents per share due to the continued
strong cash inflows during 2003 and the group"s healthy capital position.
Salient features of the 2003 results are:
Headline earnings
Group headline earnings for the year ended 31 December 2003 of R949,1 million
decreased by 11,2% from 2002"s R1 068,8 million. On a per share basis, headline
earnings were 346,4 cents, down 11,5% from 2002"s level of 391,5 cents.
Although much improved from the position at the half-year, headline earnings
were nevertheless affected by the operating profit from insurance operations net
of tax of R719,5 million for the whole year, down 19,1% from R889,1 million in
2002. This was mainly due to the inclusion in 2002 of releases from the life
fund, not repeated in 2003.
As the following table shows, the implementation of AC 133 also impacted
headline earnings negatively:
2003 2002
Rm Rm
Operating profit from insurance operations
net of tax 719,5 889,1 (19,1%)
Before AC 133 adjustment 755,9 889,1 (15,0%)
AC 133 adjustment (36,4)
Revenue attributable to shareholders" funds 324,8 261,6 24,2%
Preference dividend paid by subsidiary (95,2) (81,9) 16,2%
Headline earnings post AC 133 949,1 1 068,8 (11,2%)
Headline earnings pre AC 133 985,5 1 068,8 (7,8%)
Revenue earnings attributable to shareholders" funds increased by 24,2% as a
result of the following:
Income from financial services operations increased by 25,3% to R199,9 million.
Earnings from Liberty Ermitage rose by R15,1 million or 54,1% to R43,0 million,
while Liberty"s share of STANLIB earnings decreased by R17,5 million to R38,7
million. STANLIB incurred retrenchment costs in addition to the expected merger
and integration costs in 2003. Liberty"s shareholding in STANLIB reduced from
50% to 37,4% following the sale of 25,2% of STANLIB to an empowerment consortium
led by Safika (Proprietary) Limited in 2003. The shareholders" trading portfolio
in Electric Liberty recorded a profit of R47,2 million in 2003, compared to
R14,9 million in 2002.
Electric Liberty"s R39,7 million loss in 2002 in respect of the discontinued
Freestyle loyalty programme and the MyLife financial planning facility was
trimmed to R1,7 million last year; while Liberty Healthcare recorded a R0,5
million loss in 2003. This is not comparable with Healthcare"s profit of R29,8
million in 2002, due to the outsourcing of administration to Medscheme in 2002
as well as further rationalisation in 2003 and the discontinuation of the
Liberty Medical Scheme reinsurance. The only remaining activity in Liberty
Healthcare is the Medscheme marketing interface. Earnings from Charter Life and
Liberty Group Properties remained flat on 2002 levels.
Dividends from listed investments were 17,5% down at R32,9 million due to lower
dividend income from SABMiller (as a result of the conversion of flat US Dollar
denominated dividends into a stronger Rand) and GoldFields as a result of a
lower shareholding (following the sale of 2,5 million shares in 2002 and 1
million shares in 2003), while other investment income increased by 30,3% to
R304,4 million as a result of higher cash balances and preference share
investments.
The preference dividend of R95,2 million payable to Standard Bank was 16,2% up,
and is attributable to a corresponding increase in embedded product
bancassurance sales.
Total earnings
Liberty"s total 2003 earnings of R1 161,7 million exceed 2002"s R1 098,8 million
by 5,7%.
A goodwill impairment charge of R62,4 million was raised in the first half of
the year in respect of the UK"s Hightree Financial Services.
Total earnings per share in 2003 increased by 5,4% to 424,0 cents.
Adoption of AC 133
The accounting statement on Financial Instruments: Recognition and Measurement
(AC 133), was adopted in 2003.
The financial effects of the adoption of AC 133 are summarised as follows:
- effective 1 January 2003, policies classified as investment contracts in terms
of AC 133 were valued at a minimum of their surrender value. This resulted in an
increase in policyholders" liabilities at the beginning of the year of R130,8
million (before tax) and a corresponding reduction in retained earnings together
with the attributable tax credit thereon. Headline earnings for 2003 were
reduced by R36,4 million (after tax) for the same reason.
- unrealised investment losses of (R150,8) million and the attributable capital
gains tax credit thereon of R20,6 million for 2003 on available for sale
financial assets attributable to shareholders were accounted for directly
against equity.
- AC 133 does not permit the restatement of prior year numbers.
- the adoption of AC 133 has had no material effect on embedded value or the
value of new business.
- Further changes, refinements and clarification of interpretation are expected
to be contained in the International Financial Reporting Standard for insurance
to be issued in 2004. This may result in further changes to the group"s
recognition, measurement and disclosure on investment contracts.
Operating profit from insurance operations
The decrease of 19,1% from R889,1 million in 2002 to R719,5 million in 2003 in
the operating profit from insurance operations is mostly attributable to the
following:
- the inclusion in 2002 of releases from policyholder liabilities amounting to
approximately R350 million (after tax), due mainly to reduced expenses on a per
policy basis in that year. Expenses per policy for 2003 were roughly in line
with actuarial assumptions and consequently no material releases from
policyholder liabilities in this respect occurred during 2003.
- the improvement in policyholder investment returns for the year ended 31
December 2003 which had a positive impact on the operating profit from insurance
operations. Shareholders" entitlements to 10% of capital bonuses declared to
policyholders on certain classes of business were significantly better than in
2002.
- the implementation of AC 133 which reduced headline earnings in 2003 by R36,4
million (after tax). In 2002 the amount that would have reduced headline
earnings if AC 133 had been applied retrospectively amounted to R23,0 million
(after tax).
Investment returns
The improvement in the JSE All Share index in the last quarter of 2003 had a
positive impact on the shareholders" participation in 10% of capital bonuses.
This participation is best approximated with reference to a weighted
policyholder investment portfolio return calculated specifically for this
purpose, which was 12,5% for the year ended 31 December 2003. This compares with
a negative return of 9,5% for 2002 and the actuarial assumption for 2003 of
12,3%.
Negative investment market returns in Rand terms in the foreign portfolio (-
3,1%) can be ascribed to the strengthening of the rand compared to all major
foreign currencies during 2003 notwithstanding strong investment performance in
foreign currency.
STANLIB Asset Management produced investment returns that beat the benchmarks in
both the equity (by 1,2%) and bond (by 2,3%) component portfolios of the life
fund, while the international component portfolio return was slightly below its
benchmark. The Preferred Assets portfolio, which is a good proxy for the
performance of assets attributable to policyholder liabilities administered by
STANLIB, delivered a return of 14,9% for the year. Over five years, the
portfolio reflects a compound annual return of 18,3%.
New business
Indexed new business (a generally accepted measure used in the industry, which
comprises 10% of single premiums plus recurring new business premium) of R3
807,8 million during 2003 was 4,8% ahead of 2002, while total new business of
R11 667,0 million was 3,2% up, comprised as follows:
Total new recurring premiums R2 934,6 million +5,5%
Total new single premiums R8 732,4 million +2,5%
Liberty Group"s total individual new business for 2003 (which includes Charter
Life) reduced by 3,9% to R9 311,4 million compared to 2002, while corporate new
business rose 46,5% to R2 355,6 million. On an indexed basis, individual new
business was up by 3,0%, and corporate new business by 14,6%.
Total 2003 bancassurance new business premiums decreased by 16,0% to R2 659,3
million compared to 2002 - though on an indexed basis, new bancassurance
business was up 5,5%. New recurring premiums were up 19,0%, while single
premiums were down 23,4%.
Market share
The group"s share of the total South African recurring individual new business
market according to the Life Offices" Association statistics as at 30 September
2003 plus Charter Life remained at 23,5% (against statistics at 31 December
2002), while our share of the single premium individual new business market grew
from 20,2% at 31 December 2002 to 22,4% at 30 September 2003.
Value of new business and new business margin
The value of new business increased by 0,7% from R604,6 million for 2002 to
R608,9 million for 2003, while the new business margin was maintained at 20%.
Net cash inflow from insurance operations
Net inflow of funds remained strong in the year to 31 December 2003 at R4 497,0
million. Total inflows increased by 10,4% to R18 121,8 million, while total
claims, policyholder benefits and payments under investment contracts were 14,4%
up, at R13 624,8 million.
Liberty"s number of in force policies increased by 42 745 during 2003 (2002: 50
595).
Management expenses and costs per policy
Average acquisition cost per new policy in 2003 increased by 7,2% over 2002.
Renewal expenses per policy increased by 6,5% in line with actuarial
assumptions. No material expense profits or losses have been included in the
operating profit from insurance operations for the year ended 31 December 2003.
Total group expenditure of R1 860,9 million was 10,1% higher than in 2002.
Embedded value
Embedded value at 31 December 2003 amounted to R15 816,9 million or R57,58 per
share (R55,28 at 31 December 2002). Shareholders" funds increased from R8 588,1
million at 31 December 2002 to R8 782,2 million at 31 December 2003, while the
net value of in force business increased from R5 700,4 million at 31 December
2002 to R6 493,8 million at 31 December 2003 and the fair value adjustment
decreased from R838,1 million at 31 December 2002 to R540,9 million at 31
December 2003. The fair value adjustment for 2003 includes a deduction of the
carrying value of the purchase consideration of the business acquired from
Investec Employee Benefits in order to avoid duplication of that amount which
has been included in Liberty"s embedded value of in force business at 31
December 2003.
Capital adequacy
The capital adequacy requirement (CAR) for the group increased by 19,1% from R2
856,6 million at 31 December 2002 to R3 402,7 million at 31 December 2003.
Charter Life"s CAR increased by R154,1 million largely due to the re-modeling of
investment guarantees. The group capital adequacy multiple decreased from 3,0
times at 31 December 2002 to 2,6 times at 31 December 2003.
Prospects
There have been some initial signs of improving investor confidence and, should
this continue, we expect increased new business volumes in the months to come.
Should growth in financial results continue at 2003 levels during 2004, headline
earnings for 2004 are expected to reflect a real increase over 2003.
Dividend
Notice is hereby given that a final dividend No. 76 of 116,0 cents per share has
been declared in respect of the year ended 31 December 2003, bringing the total
dividend for the year to 278,0 cents, the same as for 2002. Dividend cover for
2003 on this basis is 1,3 times headline earnings per share.
The important dates pertaining to this dividend are:
Last day to trade cum dividend on the JSE Friday, 26 March 2004
First trading day ex dividend on the JSE Monday, 29 March 2004
Record date Friday, 2 April 2004
Payment date Monday, 5 April 2004
Share certificates may not be dematerialised or rematerialised between Monday 29
March 2004 and Friday 2 April 2004 both days inclusive.
Where applicable, dividends in respect of certificated shareholders will be
transferred electronically to shareholders" bank accounts on payment date. In
the absence of specific mandates, dividend cheques will be posted to
shareholders. Shareholders who have dematerialised their shares will have their
accounts with their CSDP or broker credited on Monday, 5 April 2004.
Audit opinion
The auditors, PricewaterhouseCoopers Inc., have issued their opinions on the
group financial statements and embedded value statement for the year ended 31
December 2003. A copy of the auditors" unqualified reports are available for
inspection at the Company"s registered office.
Derek Cooper Myles Ruck
Chairman Chief Executive
2 March 2004
Accounting policies and presentation
The accounting policies adopted by the company and the group comply with South
African Statements of Generally Accepted Accounting Practice as well as the
South African Companies Act, 1973. The financial statements are prepared on the
historical-cost basis, modified by the revaluation of investment properties,
owner-occupied properties and financial instruments to fair value and the
application of the equity method of accounting for investments in subsidiary
companies and joint ventures. These accounting policies are consistent with
those applied at 31 December 2002, except for 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 AC 133 read together with the guidance on the application of
AC 133 to liabilities arising from long-term insurance contracts, certain
policyholder liabilities have been classified as "insurance contracts" while
others have been classified as "investment contracts". Liberty classifies all
policyholder contracts that transfer significant insurance risk as insurance
contracts and values them in terms of the Financial Soundness Valuation (FSV)
basis contained in PGN104 issued by the Actuarial Society of South Africa. The
liabilities under insurance contracts are 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 its guidance
statement.
There is currently no International Financial Reporting Standard for insurance
contracts, although the International Accounting Standards Board has a project
underway to address this issue. It is likely that an International Financial
Reporting Standard on insurance contracts (phase 1) will be released in 2004.
Finalisation of phase 2 which will deal with the valuation of insurance
contracts 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 conforming to AC 133.
TRANSFER SECRETARIES:
Computershare Limited
(Registration number 2000/006082/06
70 Marshall Street, Johannesburg, 2001.
PO. Box 1053, Johannesburg, 2000.
Telephone +27 11 370-5000
SPONSOR:
Merrill Lynch
(Global markets and investment banking group)
Summarised group balance sheet
31 December 31 December
2003 2002
Rm Rm
Assets
Investments 91 508,4 81 369,3
Owner-occupied properties 725,4 625,1
Goodwill 80,5 158,2
Intangible assets 195,5 35,6
Tangible assets 363,3 321,7
Current assets 3 684,8 3 750,2
Total assets 96 557,9 86 260,1
Capital, reserves and liabilities
Shareholders" funds 8 782,2 8 588,1
Minority interests 1,0 1,0
Policyholder liabilities 83 839,6 73 595,6
Liabilities under insurance contracts 56 296,0
Liabilities under investment contracts 27 543,6
Convertible bonds 1 499,8 1 946,8
Retirement benefit obligation 155,1 143,0
Deferred tax 313,2 225,5
Current liabilities 1 967,0 1 760,1
Total capital, reserves and liabilities 96 557,9 86 260,1
Capital adequacy requirement 3 402,7 2 856,6
Capital adequacy requirement: times covered 2,6 3,0
Summarised group income statement
31 December 31 December
2003 2002 %
Rm Rm Change
Operating profit from insurance
operations net of tax 719,5 889,1 (19,1%)
Revenue earnings attributable to
shareholders" funds 324,8 261,6 24,2%
Preference dividend in subsidiary (95,2) (81,9) 16,2%
Headline earnings 949,1 1 068,8 (11,2%)
Goodwill amortisation and impairment (77,7) (13,6) 471,3%
Realised investment gains attributable
to shareholders" assets 315,4 52,4 501,9%
Capital gains tax attributable to
realised shareholders"
investment gains (25,1) (8,8) 185,2%
Total earnings 1 161,7 1 098,8 5,7%
Headline return on equity 11,7% 13,5%
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 shareholders" assets are shown in
the income statement (below headline earnings). For the year ended 31 December
2003 unrealised losses amounting to R150,8 million have been taken directly to
equity and realised gains of R315,4 million are reflected in the income
statement. The comparatives have not been restated. Both unrealized losses and
realised gains amounting to R450,7 million and R503,1 million respectively for
the year ended 31 December 2002 are included in the income statement
comparative.
Per share details
cents cents
Headline earnings per share
Basic 346,4 391,5 (11,5%)
Fully diluted 345,9 389,6 (11,2%)
Total earnings per share
Basic 424,0 402,5 5,3%
Fully diluted 417,9 400,5 4,3%
Weighted average number of shares in
issue (millions) 274,0 273,0 0,4%
Total number of shares in issue (millions) 274,7 273,6 0,4%
Fully diluted weighted average number of
shares (millions) 297,5 274,3 8,5%
Group embedded value
31 December 31 December
2003 2002 %
Rm Rm Change
Risk discount rate used 11,50% 12,75%
Shareholders" net assets 8 782,2 8 588,1 2,3%
Net value of life business in force 6 493,8 5 700,4 13,9%
Value of life business in force 6 685,5 5 837,0 14,5%
Cost of solvency capital (191,7) (136,6) 40,3%
Fair value adjustment 540,9 838,1 (35,5%)
Embedded value 15 816,9 15 126,6 4,6%
Value of new business and new business margins
31 December 31 December
2003 2002 %
Rm Rm Change
Value of new business written in the
year 608,9 604,6 0,7%
Gross of cost of solvency capital 624,9 618,2 1,1%
Cost of solvency capital (16,0) (13,6) 17,6%
New business index net of
contractual increases 3 060,2 2 983,2 2,6%
Value of new business as a
percentage of indexed
new business (new business margin) 19,9% 20,3% (0,4%)
Embedded value profits
31 December 31 December
2003 2002
Rm Rm
Embedded value at the end of the year 15 816,9 15 126,6
Less capital raised (38,9) (44,1)
Plus dividends paid 760,9 851,0
Less embedded value at the beginning of the year (15 126,6) (14 767,4)
Embedded value profits 1 412,3 1 166,1
Return on shareholders" net assets 16,4% 14,0%
Return on embedded value 9,3% 7,9%
Analysis of embedded value profits
31 December 31 December
2003 2002
Rm Rm
Investment return on shareholders" net assets
and fair value adjustment 86,2 (311,5)
Translation gains/(losses) in respect of
foreign assets (48,0) (189,0)
Other investment returns on shareholders" assets 256,2 (122,5)
Deduction of the carrying value of Investec
Employee Benefits, included within
the value of life business in force (122,0)
Net effect of changes required on the
implementation of AC 133 (1,7) -
Expected return on value of life business 741,4 756,9
Investment experience variation on life business 107,8 (696,8)
Other experience variations (68,4) 155,2
Changes in economic assumptions 239,5 227,7
Changes in non-economic assumptions (10,4) 260,5
Variation in tax - 50,8
Value of new business 608,9 604,6
Changes in modelling methodology (291,0) 118,7
Embedded value profits 1 412,3 1 166,1
Bases and assumptions
(i) Future investment returns on the major asset classes were set with
reference to the market yield on medium-term South African government
stock. The investment returns used are:
Investment return p.a.
2003 2002
Government stock 9,5% 10,75%
Equities 11,5% 12,75%
Property 10,5% 11,75%
(ii) The risk discount rate has been set equal to the investment return on
equity assets 11,5% 12,75%
(iii) Maintenance expense inflation rate 5,5% 6,75%
(iv) The expected return on value of life business is obtained by applying the
previous year"s discount rate to the value of life business in force at
the beginning of the year and the current year"s discount rate for half a
year to the value of new business.
(v) Tax has been allowed for on the Four Fund Tax basis at 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.
Allowance has been made for future Secondary Tax on Companies.
(vi) Other bases, bonus rates and assumptions:
In general, parameters reflect best estimates of future experience,
consistent with the 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 the fair value adjustment:
The fair value adjustment reflects the excess of the fair value over the
value of the tangible net assets of entities as included in the
shareholders" funds and removes the carrying value of the present value of
in force business acquired from Investec Employee Benefits from
shareholders" net assets (since it is now included in the value of in
force business).
This adjustment consisted of the following:
31 December 31 December
2003 2002
Rm Rm
Liberty Group Properties (Proprietary) Limited 216,0 240,0
Liberty Ermitage Jersey Limited 140,0 190,4
STANLIB Limited 306,9 407,7
Carrying value of in force business acquired
from Investec Employee Benefits (122,0) -
540,9 838,1
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 10 (2002: 10 and 15) respectively.
The fair value adjustment for STANLIB Limited has been determined with
reference to the price obtained for the sale of 25,2% of STANLIB to the
black empowerment consortium led by Safika (Proprietary) Limited during
2003. This effectively values STANLIB at R1,4 billion.
(viii) The amount of R1,7 million shown as the effect of changes required on
the implementation of AC 133, being an increase in policyholders"
liabilities of R130,8 million, is the result of:
a reduction in shareholders" net asset value of R91,5 million (R130,8
million before tax); and
an increase in the value of the life business in force of R89,8
million being the embedded value thereof.
(ix) The amount of R68,4 million shown for other experience variations arises
mainly from:
increased allowance for shareholders" recurring expenses;
the termination of medical reinsurance business; offset by
the Investec Employee Benefits initial embedded value; and
other experience variations amounting to R21,6 million.
(x) The amount of R239,5 million shown for changes in economic assumptions
arises from the change to a lower level of economic assumptions.
(xi) The amount of R291,0 million shown for the changes in modelling
methodology arises mainly from:
allowing more accurately for premium increases and paid-up policies on
individual business;
allowance for reinsurance in respect of corporate business in line with
current practice; and
refinements made to Charter Life"s embedded value model.
(xii) Non-recurring expenses amounting to R111,3m were identified in 2003.
These were largely due to discontinued salary costs, previously-incurred
corporate activity costs (now expensed) and a provision required to cover
an estimated adjustment in the Liberty pension fund as a result of initial
calculations of the surplus apportionment in terms of the Pension Fund
Second Amendment Act 39 of 2001. These expenses are included in the
analysis of embedded value profits but do not form part of the future
projections.
Summarised group cash flow statement
31 December 31 December
2003 2002
Rm Rm
Cash flows from operating activities 4 225,7 3 096,1
Cash flows from investing activities (4 178,8) (3 712,2)
Cash flows from financing activities 38,9 32,0
Net increase/(decrease) in cash and cash
equivalents 85,8 (584,1)
Cash and cash equivalents at beginning of year 273,5 912,1
Foreign exchange movements on cash balances (13,8) (54,5)
Cash and cash equivalents at end of year 345,5 273,5
New business
Recurring Single
premiums premiums
and fund inflows and fund inflows
31 December 31 December
2003 2002 2003 2002
Rm Rm Rm Rm
Individual business 2 503,5 2 356,6 6 807,9 7 335,7
Corporate business 431,1 425,8 1 924,5 1 182,5
Total new Business 2 934,6 2 782,4 8 732,4 8 518,2
Change 5,5% 2,5%
Total premiums
and fund inflows
31 December
2003 2002 %
Rm Rm Change
Individual business 9 311,5 9 692,3 (3,9%)
Corporate business 2 355,5 1 608,3 46,5%
Total new Business 11 667,0 11 300,6 3,2%
New business Index 3 807,8 3 634,2 4,8%
Net cash flow from insurance operations
Individual Corporate
Business Business
31 December 31 December
2003 2002 2003 2002
Rm Rm Rm Rm
Net premium income and
fund inflows 13 556,3 13 376,4 4 565,5 3 038,7
Net single premium income
and fund inflows 6 938,1 7 376,7 2 458,4 1 182,5
Net recurring premium
income and fund inflows 6 618,2 5 999,7 2 107,1 1 856,2
Total claims and
policyholders" benefits and
fund outflows (10 435,8) (9 665,6) (3 189,0) (2 248,2)
Net cash inflow 3 120,5 3 710,8 1 376,5 790,5
Total
31 December
2003 2002 %
Rm Rm Change
Net premium income and
fund inflows 18 121,8 16 415,1 10,4%
Net single premium income
and fund inflows 9 396,5 8 559,2 9,8%
Net recurring premium
income and fund inflows 8 725,3 7 855,9 11,1%
Total claims and
policyholders" benefits and
fund outflows (13 624,8) (11 913,8) 14,4%
Net cash inflow 4 497,0 4 501,3 (0,1%)
Analysis of shareholders" funds
group
funds invested
at
31 December
2003 2002
Rm Rm
Charter Life (excluding
operating profit from
insurance operations) 885,6 698,2
Financial services
operations 1 137,5 1 232,1
Listed investments 1 303,6 1 250,6
Edcon 38,6 117,4
GoldFields 153,6 315,1
Metro Cash and Carry 232,1 210,7
SABMiller 655,1 585,7
Other 224,2 21,7
Other investments 5 455,5 5 407,2
Cash, preference shares and
unit trusts 2 096,6 1 177,5
Foreign assets 1 560,0 2 037,6
Convertible bond liability (1 499,8) (2 032,1)
Unlisted investments 76,6 338,7
Fixed assets and working
capital 1 708,9 1 931,9
Share of pooled portfolios 1 513,2 1 953,6
Management expenses
Normal tax
Secondary tax on
companies on ordinary
dividends
Total 8 782,2 8 588,1
group
net revenue earned
year ended
31 December
2003 2002
Rm Rm
Charter Life (excluding
operating profit from
insurance operations) 49,3 47,5
Financial services
operations 150,6 112,1
Listed investments 32,9 39,9
Edcon 5,0 4,7
GoldFields 8,2 10,4
Metro Cash and Carry
SABMiller 18,7 23,9
Other 1,0 0,9
Other investments 304,4 233,7
Cash, preference shares and
unit trusts 128,4 100,8
Foreign assets 99,7 151,2
Convertible bond liability (119,7) (189,4)
Unlisted investments 8,0 41,8
Fixed assets and working
capital
Share of pooled portfolios 188,0 129,3
Management expenses (91,3) (57,3)
Normal tax (39,9) (28,2)
Secondary tax on
companies on ordinary
dividends (81,2) (86,1)
Total 324,8 261,6
group investment
gains/(losses)
year ended
31 December
2003 2002
Rm Rm
Charter Life (excluding
operating profit from
insurance operations) 47,5 3,6
Financial services
operations 3,3 298,7
Listed investments 128,1 62,8
Edcon 93,8 59,3
GoldFields (52,1) 193,0
Metro Cash and Carry 13,4 15,7
SABMiller 69,5 (166,4)
Other 3,5 (38,8)
Other investments (14,3) (312,7)
Cash, preference shares and
unit trusts 98,0 (2,1)
Foreign assets (442,9) (954,4)
Convertible bond liability 470,4 980,5
Unlisted investments (52,2) (59,1)
Fixed assets and working
capital
Share of pooled portfolios (87,6) (277,6)
Management expenses
Normal tax
Secondary tax on
companies on ordinary
dividends
Total 164,6 52,4
Statement of changes in group shareholders" funds
31 December 31 December
2003 2002
Rm Rm
Shareholders" funds at 31 December as
previously published 8 588,1 8 345,8
Restatement of opening retained surplus on
implementation of AC 133 (91,5)
Shareholders" funds restated at 1 January 8 496,6 8 345,8
Total earnings 1 161,7 1 098,8
Unrealised investment losses on shareholders"
assets recognised directly
against equity (150,8)
Capital gains tax attributable to unrealised
shareholders" investment losses
recognised directly against equity 20,6
Ordinary dividends (760,9) (851,0)
2001 Final dividend No. 72 of 150 cents - LDR
20 March 2002 (408,6)
2002 Interim dividend No. 73 of 162 cents - LDR
23 August 2002 (442,4)
2002 Final dividend No. 74 of 116 cents - LDR
20 March 2003 (317,4)
2003 Interim dividend No. 75 of 162 cents - LDR
22 August 2003 (443,5)
Translation difference relating to equity
component of the convertible bonds (23,9) (49,6)
Subscriptions for shares 38,9 44,1
Shareholders" funds at 31 December 8 782,2 8 588,1
Commitments
31 December 31 December
2003 2002
Rm Rm
Capital commitments 164,8 450,8
Under contracts 147,7 297,2
Authorised by the directors but not contracted 17,1 153,6
Operating lease commitments 48,5 156,4
Less than 5 years 45,9 114,7
5 to 10 years 2,6 41,7
Total commitments 213,3 607,2
These results are available at www.liberty.co.za.
