Insurer Liberty’s shares fall sharply after disappointing update
A 40%-55% spike in basic HEPS was thanks to an accounting oddity, and normalised HEPS rose a much more modest 1%-15%
Insurance group Liberty’s share price fell as much as 7.2% to R124 on Friday morning after it issued a disappointing trading update.Though Liberty said it expected to report on March 2 that its basic headline earnings per share (HEPS) for the year to end-December grew as much as 55%, this was mainly due to the way its holding in real estate investment trust Liberty Two Degrees was accounted for.Normalised HEPS — which it said "reflects the economic substance" of its investment in Liberty Two Degrees — rose within a modest range of 1% to 15%, the trading update said.Liberty Two Degrees was unbundled from the parent group in November 2016.Basic HEPS, calculated using International Financial Reporting Standards (IFRS) rules which Liberty said did not correctly reflect its earnings, would increase by between 40% and 55%."The increase in basic and headline earnings per ordinary share is mainly attributable to an accounting mismatch arising on consolidation of Liberty Two Degrees into the...
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