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Liberty Holdings Limited - Audited Preliminary Results For The Year Ended 31
Release Date: 02/03/2005 08:00:04 Code(s): LBH
Liberty Holdings Limited - Audited Preliminary Results For The Year Ended 31
December 2004
Liberty Holdings Limited
Incorporated in the Republic of South Africa
Registration number: 1968/002095/06
Alpha code: LBH
ISIN code: ZAE000004032
AUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004
LIBERTY HOLDINGS LIMITED AUDITED RESULTS
Summarised group balance sheet
Rm 2004 2003
ASSETS
Investments 104 072 91 508
Owner-occupied properties 757 725
Goodwill 163 81
Other intangible assets 203 196
Tangible assets 343 363
Deferred taxation 1 -
Current assets 4 615 3 687
Total assets 110 154 96 560
CAPITAL, RESERVES AND LIABILITIES
Shareholders` funds 4 807 4 755
Minority interests 4 234 4 021
Policyholders` liabilities 98 049 83 840
Liabilities under investment contracts 32 128 27 544
Liabilities underinsurance contracts 65 921 56 296
Convertible bonds - 1 500
Retirement benefit obligation 160 155
Deferred taxation 636 313
Current liabilities 2 268 1 976
Total capital, reserves and liabilities 110 154 96 560
Summarised group income statement
Rm 2004 2003 % Change
Operating profit from insurance operations net
of taxation 929 720 +29
Operating profit from shareholders` funds 323 229 +41
Minority interests in headline earnings (585) (435) +34
Headline earnings 667 514 +30
Goodwill amortisation and impairment (12) (78) -85
Investment gains attributable to shareholders`
assets 575 315 +83
Capital gains taxation attributable to
shareholders` investment gains (10) (25) -60
Minority interests (243) (97) +151
Total earnings 977 629 +55
Attributable to ordinary shareholders 975 627 +56
Attributable to preference shareholders 2 2 -
Per share details
Cents 2004 2003 % Change
Headline earnings after preference
dividend per ordinary share 1 348,0 1 038,3 +30
Total earnings per ordinary share 1 976,5 1 272,2 +55
Dividends per ordinary share 920,0 840,0 +10
Interim 490,0 490,0 -
Final declared(1) 430,0 350,0 +23
Total number of shares in issue at
31 December (million) 49,3 49,3 -
Weighted average number of shares in issue
(millions) 49,3 49,3 -
1 To be accounted for in the 2005 financial year
Summarised group cash flow statement
Rm 2004 2003
Cash flows from operating activities 3 641 4 219
Cash flows from investing activities 327 (4 179)
Cash flows from financing activities (2 810) 46
Net increase in cash and cash equivalents 1 158 86
Cash and cash equivalents at beginning of year 346 274
Foreign exchange movements on cash balances (12) (14)
Cash and cash equivalents at end of year 1 492 346
Statement of changes in group shareholders` funds
Rm 2004 2003
Shareholders` funds at the beginning of the year 4 755 4 671
Restatement of opening retained surplus on implementation
of AC133 - (50)
Shareholders` funds as restated 4 755 4 621
Total earnings 977 629
Unrealised investment gains on shareholders` assets
recognised directly against equity 39 (77)
Capital gains taxation attributable to shareholders`
investment gains recognised directly
against equity (78) 11
Preference dividends (2) (2)
Ordinary dividends accounted for in the current year (414) (414)
Translation difference relating to equity component of the
convertible bonds (43) (13)
Subscription for shares 4 -
Black Economic Empowerment transaction (639) -
Unrealised profit on sale of subsidiary shares 208 -
Shareholders` funds at the end of year 4 807 4 755
Commitments
Rm 2004 2003
Operating lease commitments 97 48
Capital commitments
Capital Alliance Holdings Limited Acquisition
The board of directors of Liberty Group Limited
have approved the purchase of
the entire issued share capital of
Capital Alliance Holdings Limited 3 094 -
Tangible assets 203 165
Investment properties under contracts 290 -
Total commitments 3 684 213
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. The financial statements for 2004, incorporating
the appropriate accounting for the Black Economic Empowerment transaction, have
been prepared on a consistent basis with the previous year as well as the
interim financial statements for 2004.
IFRS 4; Insurance contracts (issued March 2004). The objective of the standard
is to specify the financial reporting requirements for insurance contracts
rather than address the recognition and measurement of obligations arising from
insurance contracts, which will be addressed in phase 2 of the International
Accounting Standards Board`s project on insurance .
Interpretations of definitions regarding investment contracts and insurance
contracts have also developed further following the issue of IFRS 4. Liberty
Group will deal with these changes in interpretation as part of its adoption of
IFRS in 2005.
IFRS 2; Share-based payments (issued February 2004). Options issued to staff
in terms of the Liberty group`s share option scheme will be accounted for in
accordance with IFRS 2 from 1 January 2005. IFRS 2 will be applied
retrospectively for all options granted after 7 November 2002 that have not
vested on the effective date, 31 December 2004. IFRS 2 requires the recognition
of an expense equal to the fair value of options granted to employees. The fair
value will be expensed over the vesting period based on the services received
from these employees.
Currently the South African Institute of Chartered Accountants is obtaining an
opinion from the International Financial Reporting Interpretation Committee
(IFRIC) on whether BEE transactions fall within the ambit of IFRS 2. If this is
the case there may be implications for the group`s accounting for the BEE
transaction concluded this year.
A further significant issue referred for interpretation by IFRIC, concerns the
rate of taxation to be applied to any deferred taxation applicable to
revaluations on investment properties. Liberty Group Limited considers the
Capital Gains Taxation rate to be the appropriate rate to be applied to such
valuations, whereas conflicting interpretations of IAS 12 appear to call for the
corporate rate of taxation.
It is unlikely that IFRIC/IFRS clarification on this matter will be obtained
in the short term.
Liberty Holdings Limited Audited Results
Commentary on results
Liberty Holdings Limited (Liberty Holdings) is the holding company of Liberty
Group Limited. Liberty Holdings has no other investments (apart from cash) and
carries on no business other than that related to its investment in Liberty
Group Limited. At 31 December 2004 Liberty Holdings held a 50,17% interest in
Liberty Group Limited (31 December 2003: 54,2%).
Shareholders are consequently referred to the announcement published by Liberty
Group Limited simultaneously with this announcement, for details of the
operations (the results of which are consolidated into Liberty Holdings) and
prospects of Liberty Group Limited.
As a result of the Black Economic Empowerment (`BEE`) transaction concluded by
Liberty Group Limited in November 2004, Liberty Holdings disposed of 14 271 955
Liberty Group Limited shares for which it received proceeds of R692 million.
During the second half of 2004 Liberty Holdings acquired 4 099 069 Liberty Group
Limited shares at a total cost of R237 million in line with its stated intention
to utilise such proceeds to rebuild its shareholding in Liberty Group Limited.
In accordance with the base principle supporting the accounting for the BEE
transaction, the Group profit of R208 million on sale of the Liberty Group
Limited shares has been accounted for directly in reserves. This will be
released to income when the redeemable preference shares held by Liberty
Group Limited supporting the BEE transaction are redeemed or sold.
Dividend
Notice is hereby given that the final ordinary dividend No. 71 of 430 cents
per share has been declared in respect of the year ended 31 December 2004. This
dividend distributes the entire under lying Liberty Group Limited final
dividend to shareholders of Liberty Holdings.
The important dates pertaining to this dividend are:
Last day to trade cum dividend
on the JSE Friday, 1 April 2005
First trading day ex dividend
on the JSE Monday, 4 April 2005
Record date Friday, 8 April 2005
Payment date Monday, 11 April 2005
Share certificates may not be dematerialised or rematerialised between Monday,
4 April 2005 and Friday, 8 April 2005, 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, 11 April 2005.
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 2004. A copy of the auditors` unqualified reports is available
for inspection at the Company`s registered office.
Derek Cooper Myles Ruck
Chairman Chief Executive
1 March 2005
Sponsor
Merrill Lynch
Global Markets & Investment Banking Group
Merrill Lynch South Africa (Pty) Ltd
Registration number 1995/001805/07
Registered Sponsor and Member of the
JSE Securities Exchange South Africa
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Limited
(Registration number : 2004/003647/07)
Ground floor, 70 Marshall Street, Johannesburg 2001
PO Box 61051, Marshalltown, 2107
Telephone +27 11 370 5000
