Category Investments

Paladin Capital’s intrinsic value increases to R2,45 per share

07 October 2010 Paladin Capital

Paladin Capital, the listed private equity investment company, saw its intrinsic value per share for the six months to 31 August 2010, increase by 20,7% to R2,45. Total intrinsic value now amounts to more than R1,4 billion.

Paladin CEO, Francois Swart, said recurring headline earnings increased by 16.2% to R38,8 million due to solid performances from the investment companies and services segments, amid difficult trading conditions seen in the mining, construction and related services segment, which was particularly hard hit by the downturn in the construction sector. Recurring headline earnings per share, however, decreased by 11,8% to 6,7 cents per share.

Reportable headline earnings increased by 14,2% to R147.6 million before providing for the performance fee of R46.2 million. This increase was due to the inclusion of marked-to-market profits at Thembeka resulting from its investments in Capitec, PSG Group and the JSE. Headline earnings after providing for the performance fee decreased by 21.5% to R101.4 million.

Paladin Capital, which made its debut on the AltX in September last year, is an 81% held subsidiary of PSG Group and the group's preferred investment vehicle in industries other than agriculture, food and beverages. Given the company’s long term growth strategy, no dividend is paid.

“Paladin Capital is strategically involved in its investee companies and actively partners with the entrepreneurs and management to advance the business to the next level and look for organic and acquisitive growth opportunities,” Swart said.

As at the end of August, Paladin managed thirteen investments across the economic spectrum. This has reduced to twelve given the subsequent sale of Lesotho Milling. Paladin obtained regulatory approval for the purchase of an additional 26% stake for a controlling interest of 76% in Curro, a private school group, during the six months under review.

“Curro’s expansion plans are on track and Paladin remains confident that the education industry can provide above average, sustainable rates of growth. The recently announced transaction whereby CIC will be disposed of is still subject to various regulatory approvals. Obtaining these approvals will result in a cash inflow of R371 million. This will be invested in new and existing opportunities.” Swart said.

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