Presentation to the Investment Analysts Society 4th & 5th March 2014

Transcription

1 Presentation to the Investment Analysts Society 4th & 5th March

2 Presentation overview Overview and Highlights Financial Results Fred Robertson Lawrie Brozin Underlying Investment Performance Mustaq Brey Questions 2

3 Overview and Highlights Fred Robertson 3

4 Overview Profitable Empowering Making a difference Founded in 1995 and listed in % economic interest held by previously disadvantaged individuals Track record of creating value for shareholders evidenced by share price growth and dividends 23 broad based NGOs as shareholders, with more than 3 million beneficiaries 4

5 Overview Sector focus: Financial Services, Food, Healthcare Long-term partnership approach to investments Enterprise Development Fund Strong, diverse and experienced team 5

6 Key investment sectors Food Healthcare Financial Services Other RE AFRICA 6

7 Contribution to Intrinsic Gross Asset Value Other 8% Healthcare 37% Food 41% Financial Services 15% 7

8 Financial Highlights Total assets increased by R1b to R6.8b NAV increased by R422m to R3.2b Intrinsic NAV increased by 16.1% to R4.2b Attributable Profit for the year R464m Headline Earnings for the year R461m Dividend increased by 20% to 30cps Special Dividend of 10cps Share price growth of 24.4% (BRT) and 17.2% (BRN) for the year Share price discount to INAV of 18.1% on Ords and N Ords at year end 8

9 Financial Results Lawrie Brozin 9

10 Statement of Comprehensive Income (R m) change 31 Dec Dec 2012 Revenue Sales and fee income Dividends 7.2% 7.5% 2.6% Operating profit -51.1% Fair value gains -47.1% Share of profits of associates -53.6% Finance costs 15.9% (111) (132) Profit before tax -49.7% Taxation 69.0% (81) (261) Profit for the year -43.8% Basic EPS (cps) -45.4% Diluted EPS (cps) -45.4% Basic HEPS (cps) -45.5% Diluted HEPS (cps) -45.5%

11 Financial Position change 31 Dec Dec 2012 Total assets (R m) 18.8% Interest bearing borrowings (R m) 1.4% Book NAV (R m) 15.0% Book NAV per share (cps) 14.8% Intrinsic NAV (R m) 16.1% Intrinsic NAV per share (cps) 15.9%

12 Fair Value Gains Investment 2013 R m 2012 R m Life Healthcare Old Mutual Nedbank MTN Zakhele Phuthuma Nathi African & Overseas Ords Rex Trueform Ords Galaxy Gold Taste Holdings Rex Trueform N African & Overseas N Tiger Brands Emthunzini BEE Business Partners Trust Lion of Africa Holdings TOTAL

13 NAV & INAV history (R m) NAV (R m) INAV (R'm)

14 Dividend history (cps)

15 Underlying Investment Performance Mustaq Brey 15

16 Contribution to Intrinsic Gross Asset Value Other 8% Food 41% Healthcare 37% Financial Services 15% 16

17 Food Oceana Group Ltd (16.82%) Oceana accounts for 27.4% of Brimstone s intrinsic gross asset value Strong growth in the horse mackerel and hake divisions Lower canned fish sales due to weaker local demand Closing share price R82.00 per share (2012:R69.82) Received and accrued R64.7m in dividends and recorded R8.1m in equity accounted earnings (for 9 months to Sept 13) 17

18 Food Sea Harvest (58%) Overall catch rates 16% lower than previous period Sales volumes 16% higher that previous period Revenue increased by 20% to R1.2bn Operating profit before interest increased by 78% to R72m Recovery in US and Europe export markets Export revenue increased by 22% on prior year Maintained its market leader position in local market Findus & Quorn now selling well in domestic market In process of refinancing debt structure on more favourable terms 18

19 Food Sea Harvest change 31 Dec Dec 2012 TAC (tons) 7.9% Sea Harvest quota (tons) 1.7% Sea Harvest percentage 25.2% 26.8% Sales (R m) 20.2% EBITDA (R m) 19.5% External debt -4.6% Cash on hand Average exchange rates R/Euro R/US$ Average oil price ($/barrel)

20 Food Tiger Brands Rights to shares (0.95%) at R Matures in Dec 2017 Trickle Dividend of R2.4m received Recorded R87.5m fair value loss Closing price R per share (2012:R325.25) Taste Holdings Hold shares at average cost of R1.57 per share Dividends received during the period R1.3m Recorded R13.5m fair value loss Closing price R3.75 per share (2012:R4.30) 20

21 Contribution to Intrinsic Gross Asset Value Other 8% Food 41% Healthcare 37% Financial Services 15%

22 Financial Services Lion of Africa Insurance Company (100%) Lion of Africa is the largest black-owned short term insurer Dismal underwriting cycle Gross premium increased by 12.4% Net loss ratio 78.4% After tax loss of R67m for the year NAV R147m at year end 22

23 Financial Services Old Mutual plc Rights to shares (0.35%) acquired in 2005 at R13.08 per share Revalued by R105.1m to R172m Closing price R32.79 per share (2012:R24.49) Performance fees earned R8.2m Deal matures on 1 May 2015 Nedbank Group Rights to shares (0.78%) (initial 2.6m shares acquired at R74.75 per share in 2005) Revalued by R99.1m to R424m Closing price R per share (2012:R188.00) Performance fees earned R7.5m Deal matures on 1 January

24 Financial Services AON Re Africa (18%) Leading reinsurance broker in SA and sub-saharan Africa Received dividends of R2.3m Equity accounted earnings R1.7m Afena Capital (28.8%) Investment manager offering specialist equity and balanced portfolios Received dividends of R3.1m Equity accounted earnings of R0.9m 24

25 Contribution to Intrinsic Gross Asset Value Other 8% Food 41% Healthcare 37% Financial Services 15% 25

26 Healthcare Life Healthcare (5.04%) Total dividends received for the year R66.2m Share price growth from R33.70 to R41.86 per share at year end Fair value adjustment of R428.5m Special dividend R52m receivable in March 2014 The Scientific Group (28.2%) Shareholder loan repayments R6.0m to December 2013 Equity accounted earnings R0.2m 26

27 Contribution to Intrinsic Gross Asset Value Other 8% Food 41% Healthcare 37% Financial Services 15% 27

28 Other House of Monatic (100%) Turnover increased by 3% to R179m Profit after tax increased by 40% to R6.9m Employment levels remained stable throughout the year Continues to benefit from the DTI Productivity Incentive enabling upgrade of plant and equipment by R15m over the past 3 years Rex Trueform and African & Overseas (Queenspark) (33%) Acquired in 2007 for R47.3m Dividend received of R3.1m Fair value loss of R35.3m Valued at R77.8m at year end 28

29 Other Phuthuma Nathi (2.53%) Phuthuma Nathi is a 20% shareholder in Multichoice SA Valued at R153.4m at year end Closing price of R90.00 per share MTN Zakhele (1.25%) Hold shares MTN Zakhele is a 4% shareholder in MTN Group Ltd Revalued by R44m to R132.3m MTN closing price R per share (2012:R177.60) 29

30 Intrinsic NAV summary % change 31 Dec Dec 2012 Book NAV (R m) 15.0% Intrinsic NAV (R m) 16.1% Book NAV per share (cps) 14.8% Intrinsic NAV per share (cps) 15.9% Fully diluted intrinsic NAV per share (cps) 15.5% Market price per share (cps) Ordinary shares N ordinary shares 24.4% 17.2% Discount to Intrinsic NAV Ordinary shares N ordinary shares 18.1% 18.1% 23.7% 18.9% 30

31 Intrinsic NAV detail Asset % held Valuation basis Gross Value (R 000) Debt (R 000) CGT (R 000) INAV (R 000) Life Healthcare 5.04% Mkt val per share ( ) Oceana 16.82% Mkt val per share ( ) ( ) Sea Harvest 58.10% DCF & EV/EBITDA (52 304) Nedbank option 0.78% Option valuation (51 489) Lion of Africa 100% Price to book & PE (2 367) Tiger Brands option 0.95% Option valuation (31 180) A&O / Rex Trueform 33.0% Mkt val per share (5 693) Taste Holdings 12.46% Mkt val per share ( 9 997) MTN Zakhele 1.25% Option valuation Old Mutual option 0.35% Option valuation (28 012) Afena Capital 28.8% AUM & PE Investment properties 100% Discount to mkt cap rate (24 256) (7 081) Phuthuma Nathi 2.53% Mkt val per share (2 683) AON Re Africa 18% Price to earnings (8 546) The Scientific Group 28.2% EV/EBITDA (481) House of Monatic 100% Book value (965) Other investments Various Book value Other BEE options Various Market value (1 147) Funding Book value (3 975) ( ) (77 265) ( ) TOTAL ( ) ( ) Intrinsic NAV per share (cps) (393) (356) 1 709

32 In conclusion Strong balance sheet and access to facilities Well positioned to pursue value enhancing transactions Solid track record of unlocking value Strong experienced team with proven deal-making ability Long term view on underlying investments Continue to do empowerment differently and make a real difference to all our stakeholders 32

33 Questions 33

34 PROFITABLE. EMPOWERING. MAKING A DIFFERENCE. 34