INVESTMENT: Sekunjalo Posts Impressive Interim Results
Recent Western Cape Business News
LEADING empowerment company Cape Town-based Sekunjalo Investments yesterday reported satisfactory growth in bottom line earnings, cashflow and net asset value (NAV) for the six months to end February 2012.
The Group, as an investment holding company, has set its objective to increase net asset value (NAV) by improving operational performance of its underlying businesses and investments, and has done so successfully for the period under review.
Group revenue has grown by 33% from the prior interim period due to the strong operational performance of the underlying businesses. The Group’s gross profit percentage has increased from 28% to 38% with improved margins and efficiencies, particularly from the IT and fishing operations.
Profit before taxation for the period has increased significantly to R19, 3million as compared to the prior period profit of R8.4million, driven mainly by the subsidiaries organic growth and strategies implemented over the past two years.
Earnings and headline earnings per share have increased by 34% and 38% respectively as a result of the operational performance of the subsidiaries.
The Group’s asset base has increased by R43 million to R783million from R740million over the comparative period under review.
Net asset value (NAV) per share grew to 88.70c from 83.62c in the prior interim period, while tangible NAV per share grew to 78,68c from 68,84c for the same period.
Sekunjalo’s CEO Khalid Abdulla said that this performance has resulted in the improvement in cash generation from operations which compares well with the cash deficit experienced during the prior interim period. Cash flows from operating activities have improved by R26 million compared to the prior interim period.
Abdulla said the Group is pleased to announce that the business strategies previously implemented are showing the expected improved results for the six month period under review.
He said that due to the re-investment into the organic growth of the Information Technology Communication Group (Sekunjalo TSG), the division is performing above expectation with operating profits of R26m for the period as compared to R5m for the prior period. This was achieved through the implementation and roll out of the long term contracts secured during the prior financial years.
Abdulla was heartened by the performance of the Sekunjalo TSG division. “These operations continue to perform well with revenue from operations increasing by 88% to reflect revenue of R73million as compared to R39million during the prior period.
Premier Fishing SA (Pty) Ltd has steadily maintained its performance with the major contribution coming from the pelagic and south coast rock lobster division. The fishing sector generally performs better in the second half of the year due to the seasonal nature of the industry.
He said Premier Fishing, generated a profit from operations for the period under review. The Information Technology Communication Group also performed above target, and that both generated positive cash flows. This has resulted in these divisions being in a strong financial position.
He added that the Environmental Impact Analysis (EIA) process was progressing well and this will pave the way for the re-opening of the pelagic fish processing plant in Saldanha Bay.
Abdulla said that the healthcare division’s revenue has grown by 49% with the core dermatological range of products in the pharmaceutical division showing a good improvement in performance, despite significant competition from generic equivalents.
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