Brimstone year-end results - Brimstone posts 43% rise in assets to R4 billion in 2007
Brimstone Investment Corporation’s (Brimstone) year end results released today for the period ended 31 December 2007 show that the diversified investment company has continued on its rapid growth path, with Net Asset Value per share rising 50,2%, from 674,5c to 1013c and total assets up 43% to R4 billion from R2,7 billion a year ago
There were strong performances from a number of the group’s investments, which combined with the proceeds from the sale of its stake in Lenco, enabled Brimstone to declare a dividend of 32 cents per share, 100% higher than the previous year.
According to Brimstone CEO, Mustaq Brey, the prolific rise in assets is as a result of strong value growth across the group’s portfolio of investments as well as some significant transactions conducted during the year. “In particular, Brimstone benefited from its 22% stake in the Life Healthcare (LHC) business - one of the largest private hospital operations outside the United States – which has become one of Brimstone’s anchor investments. LHC continues to show strong organic growth, which has contributed to increased revenues, operating profit and cash flows.”
Brey says that while headline earnings per share were 33% lower than the previous year, this was as a result of the re-evaluation and re classification of the investment in Life Healthcare (LHC) now being accounted for at fair value through profit and loss. “This change had a significant impact on the results to 31 December 2006 as the 22% stake in Life Healthcare was accounted for on a fair value basis over a 21 month period from date of acquisition, compared to the current 12 month reporting period.”
According to Brimstone Executive Deputy Chairman, Fred Robertson, it was a busy year for Brimstone on the transaction front. “House of Monatic, Brimstone’s wholly-owned subsidiary, acquired an effective 51% of Canterbury SA on 1 March 2007. Canterbury SA is the official kit supplier to the World Rugby Champion Springboks, a high profile contract that is expected to impact positively on future earnings.”
He adds that in September 2007, Brimstone acquired an effective 34.6% of the Queenspark Retail Group through the acquisition of shares in Rex Trueform Clothing Company Limited and African and Overseas Limited. “The acquisition by Brimstone makes Queenspark one of the most empowered clothing retailers in the country.
He comments that Brimstone is moving forward with its strategy to strengthen the House of Monatic Group’s Brand, Design and Manufacturing portfolio through the acquisition and development of premium brands, such as Carducci, Canterbury, O’Neill, Viyella and Lyle and Scott.
As of 1 March 2007, Brimstone acquired an effective 18% of Aon Re Africa (Pty) Ltd. Aon Re Africa is an established reinsurance broker operating throughout sub-Saharan Africa. “We are well satisfied with the results achieved to date and future prospects look promising, says Robertson.
Finally, Brimstone’s investment in Lenco was disposed of in July 2007 realising R203 million and delivering a significant profit for the group.
Brimstone recorded strong earnings contributions from a number of its other investments, including Oceana, Sea Harvest. and Scientific Group. The group is confident that its investments in Old Mutual, Nedbank and Lion of Africa Insurance Company will deliver significant value over the medium to long term.
Robertson says that since Brimstone’s inception twelve years ago, the company has always sought to stay true to its goals of being profitable, empowering, and having a positive social impact on the business and the individuals with whom it is involved, including shareholders, employees, suppliers, customers and the greater community.
“By adding value to our business partners and through strategic acquisitions, job creation and involvement in the upliftment of disadvantaged communities in South Africa, we are confident that Brimstone will continue to deliver on each of these mantras in 2008.”
Brimstone Chairman, Prof Jakes Gerwel says; “We are rightly proud of the performance of Brimstone, which has consistently delivered value to its shareholders. Our dividend of 32 cents per share is 100% up on last year. More than 50% of the total dividends, which is in excess of R75 million, will go directly into the pockets of historically disadvantaged individuals and groups who are shareholders. This is our 6th annual dividend, excluding the special R1,50 paid to shareholders in 1999.
“Our shareholders who have remained loyal since inception have had an excellent return on investment. We hope to continue this trend into the future.”
