EMPOWERMENT: Brimstone Delivers Good Results
Recent Western Cape Business News
Cape Town-based BEE group Brimstone delivered excellent results for the six months to 30 June 2012. Headline earnings of R474.8 million were up by 140% from the comparative period’s R197.9 million. Basic headline earnings per share commensurately increased to 194.6 cents per share from 81.2 cents per share in the previous period.
Profit for the period of R482.2 million was 111% higher than the prior period’s R229 million. Net profit before taxation increased meaningfully from the R280.6 million reported for 30 June 2011 to R697.3 million in the current period, mainly as a result of an increase in the value of marked-to-market assets and increased profitability from underlying operating businesses.
Brimstone’s CEO, Mustaq Brey commented:
"Our good results, despite a lackluster economy, are very encouraging. We grew our intrinsic net asset value by 19% and the underlying operations performed in line with expectations. Brimstone is well capitalised and has access to unutilised credit lines and will pursue value enhancing transactions, as we deem fit. We will continue to exercise prudence and strict criteria when considering potential investment opportunities.”
The Group’s investment strategy is mainly into defensive sectors such as food, financial services and healthcare.
Total assets increased from R4.6 billion at 31 December 2011 to R5.2 billion at the end of the current period, primarily as a result of the increase in the value of marked-to-market assets and the acquisition of stakes in Afena Capital and Taste Holdings. Net asset value of R2.4 billion compares well with the R2.0 billion reported at 31 December 2011 and translates to a net asset value per share of R9.99 at period end (31 December 2011: R8.20)
Sea Harvest posted pleasing results on the back of firm demand for Hake as a result of lower supply from Namibia and Argentina. Marginal price increases were achieved in traditional European markets. Exports to new markets are increasingly gaining traction. During the review period, Sea Harvest managed to position itself in new categories within the perishables segment with the launch of Findus range of Vegetable and Ready Meals.
Brimstone for the first time included share of profits of associates at the increased shareholding level, following its acquisition of a further 8.5 million shares in Oceana on 21 December 2011. Growth in equity accounted earnings during the period was satisfactory. Oceana posted good results for their interim period with a 21% increase in headline earnings per share on the back of improved performance across all operating divisions.
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