Uphill battle ahead
How Liberty lost its flame
Liberty’s double-digit drop in earnings has resulted in it emerging as the laggard of the sector
If a company chooses a smug slogan like “The Advantage of Knowing” it is asking for trouble. Chances are, sooner or later it won’t live up to this arrogant message. In the case of Liberty it has been hard to know what this advantage is even supposed to be. Granted, there were a few encouraging points from the company’s annual results. The fall in headline earnings was down 39%, not as bad as the 60% suggested in January’s trading update. Group equity value, what used to be known as embedded value, was almost unchanged at R145.86/share. This is NAV once actuaries put it through the mangle. But is Liberty just going through a cyclical dip, or is it time to review the entire business model? CE Thabo Dloti is certainly in the evolutionary, not revolutionary, camp.His management changes have been piecemeal. He is redeploying chief actuary David Jewell into the individual arrangements (retail) business. He has an uncanny resemblance to a young Matt Damon in The Rainmaker, so perhaps he wi...
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