Financial services company Liberty has published its financial results for the six months ending 30 June – showing lower earnings but an improved cash flow.
Normalised headline earnings for H1 2017 were R1.27 billion, lower than the first half of 2016, but reflective of a recovery in comparison to the second half of 2016.
The value of new business in the group’s retail operations in South Africa was lower in the period at a reduced margin due to a weaker business mix.
The group’s asset management operations in South Africa also experienced margin pressure as a result of subdued investment performance and product mix.
However, the capital position remained strong with a capital adequacy cover of 2.82 times the statutory requirement.
“Liberty is taking decisive action to address operating challenges and revitalise the group,” the company said in its shareholder statement.
“Our short term to medium term priorities are managing expenses, improving the value of new business and related margins for the insurance operations and fund performance for the asset management business.”
Commenting on the results, David Munro Liberty Group CEO said: “The results for the six months reflect difficult market conditions and the challenges we face as a business.”
“While these results are disappointing, our sales volumes and net cash inflows are showing positive growth, highlighting the strength of our brand, the value customers see in what we offer and the power of our sales and distribution team.”
“These results reflect lower profitability and generation of the value of new business. We have prioritised initiatives to make an immediate impact on our service to customers and financial performance.
“We will not shirk from the necessary decisions needed to equip Liberty to do better in this difficult and highly competitive environment.”