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LGL
LIBU
Liberty Life - Trading Statement
Liberty Group Limited
(Registration number 1957/002788/06)
(Incorporated in the Republic of South Africa)
Share Code: LGL
ISIN Code: ZAE000057360
("Liberty Life")
Trading Statement
Liberty Life"s audited results for the year ended 31 December 2005 will be
released on 2 March 2006. Shareholders are advised that the group"s headline
earnings per share for 2005, which include investment surpluses on shareholders"
funds from 1 January 2005 in accordance with International Financial Reporting
Standards*, are expected to be between 55% to 65% higher than the 461,5 cents
per share recorded for the year ended 31 December 2004.
This is after a provision of R406 million made through the income statement in
respect of minimum standards for savings product values in line with the
statement of intent signed between the Life Offices Association and National
Treasury in December 2005. R321 million of the provision impacts headline
earnings and R85 million is reflected below headline earnings as a goodwill
impairment on acquisition of Capital Alliance. This, together with a R193
million reduction in the value of in-force business as a result of the statement
of intent, represents the total negative impact (R599 million) on embedded value
at 31 December 2005.
The most meaningful earnings comparison is Liberty Life"s BEE normalised**
headline earnings per share, before taking the once-off provision and IFRS
adjustments into account, which are expected to be between 35% and 45% higher
than in 2004.
Strong operational results were complemented by the positive impact of buoyant
investment markets for 2005. The weighted average investment return used as a
proxy to calculate shareholders" 10% share of policyholder capital bonuses on
certain classes of business was 33,2% at 31 December 2005 compared with 22,7% at
31 December 2004.
The information contained in this announcement has not been reviewed and
reported on by the company"s auditors.
*Previously, realised investment surpluses on shareholders investments were
included in total earnings as opposed to headline earnings and unrealised
surpluses were taken directly to equity.
*As defined in the 2004 annual report, Black Economic Empowerment (BEE)
normalised headline earnings per share include dividends received but accounted
for directly in equity on the Group"s BEE preference shares and also include the
reinstatement of the number of shares in issue relating to the Group"s BEE
transaction. This measure reflects the economic reality of the transaction as
opposed to the required technical accounting treatment that reflects the BEE
transaction as a share buy-back.
Johannesburg
17 February 2006
Sponsor
Merrill Lynch SA (Pty) Ltd
Date: 17/02/2006 05:39:11 PM Produced by the JSE SENS Department
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