Despite challenging conditions in a subsidiary, the Company reported steady growth in Intrinsic Net Asset Value (INAV,) up 16.1% from R4.19bn in the previous year to R4.86bn. This translates to an increase in INAV per share to R19.79 for the year under review from R17.09 at 31 December 2013.
Profit for the year was down from R473m to R278m, impacted by losses incurred at Lion of Africa Insurance Company, lower fair value adjustments of underlying investments, reduced equity accounted earnings and an impairment of an investment in an associate. The Company maintained its track record of cash dividend payments, declaring a total dividend of 50 cents per share, comprising a final dividend of 30 cents per share and a special dividend of 20 cents per share.
Brimstone CEO, Mustaq Brey commented, “We are satisfied with the overall growth in the portfolio, and more importantly growth in Intrinsic Net Asset Value. The second half of the year presented us with challenges in a subsidiary which has had a negative effect on profits.”
Fred Robertson, Executive Chairman, Brimstone added, “2015 marks Brimstone’s 20th year of existence since being founded on the Cape Flats. We have consciously introduced community shareholders to the mainstream economy and created tangible value for investors, including the 26 broad based shareholder NGOs who represent more than 3 million beneficiaries. An investor who invested R6,250 in Brimstone in 1995, re-invested all his dividends, followed their rights and received their unbundled Life Healthcare shares, would now have accumulated a value of R1.4m.”
“Brimstone’s track record of solid growth in intrinsic net asset value and cash dividends paid has contributed to a growth in the share price over the years. We remain committed to our philosophy of being profitable, empowering and having a positive social impact.”
Brimstone’s investments in the food sector performed well, with increased catch rates and improved vessel utilisation reported by Sea Harvest and Oceana respectively. Sea Harvest catches for 2014 were 18% ahead of the prior year. Local and international demand was strong and further supported by a favourable exchange rate. Sea Harvest expanded its fleet with the acquisition of a new vessel, Harvest Atlantic Peace at a cost of R130m.
The Company experienced disappointing results from Lion of Africa, reporting a loss from operations of R179.9m. This included a charge of R86m arising from the annual impairment review of reinsurance assets. Brimstone has initiated remedial action which includes a strategic and operational review of the business.
Brimstone’s investments in the healthcare sector was supported by a special dividend of R52.5m, amounting to total dividend receipts from South Africa’s leading private hospital operator of R126.5m. Brimstone remains one of the largest investors in the hospital group.
In its 20th year of existence Brimstone remains well capitalised to pursued value enhancing transactions based on cash generative, quality assets. The Company has proven its ability to act as lead empowerment partner of choice with a capacity to lead broad-based empowerment consortia. The group will continue to maintain a long-term view and partnership approach to its underlying investments.