Liberty's earnings are too low, say analysts
Shareholder confidence wanes as the insurer’s new chief fails to fire up earnings
Liberty’s share price tumbled more than 7% on Friday, as the insurer’s expected turnaround under Standard Bank-appointed David Munro failed to materialise. In a brief trading update, Liberty said it expected normalised headline earnings per share (heps) for the year to December 2017 to be between 1% and 15% ahead of the previous year. But analysts said that the increase in earnings should have been much higher. "Most analysts were expecting normalised heps to increase beyond 15% year on year given the one-off costs in [the 2016 year]," said Warwick Bam, an analyst at Avior Capital Markets. "The concern is that there are further operating issues coming out in these results," he said. Liberty’s 2016 results were a shocker. Normalised headline earnings fell 39% to R2.5bn, reflecting a 37% drop in operating earnings and a 42% fall in earnings from the shareholder investment portfolio. A challenging consumer environment, lower investment returns, accounting anomalies arising from its lis...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.