Imara alerts investors to potential earnings surge

Imara, the Africa-focused financial services group, this week (Friday March 8) alerted investors and shareholders to the potential for a late surge in earnings from its asset management activities as international interest in the continent’s frontier markets continues at a high level.

Africa’s attractiveness as an investment destination – already strong – has become even more pronounced following the international credit crisis and its dampening effect on returns from developed markets. In contrast, many low-correlation jurisdictions across Africa have continued to achieve substantial gains.

Gaborone-listed Imara has now published a Botswana Stock Exchange Trading Statement to investors and shareholders to point out the possible impact of recent events on Group earnings. Its financial year-end is only eight weeks away.

The statement from Imara Holdings Limited points out: “As a financial services company, recent stock market turbulence has reduced the visibility and predictability of our earnings. However, we are pleased to report that to date Group profits, under these difficult circumstances, have been gratifyingly resilient, although under some pressure.

“Our final year-end results could be significantly impacted on the upside by a number of year-end adjustments, especially the potential performance fee on our extremely successful Imara African Opportunities Fund.

“Under current accounting conventions and a strict interpretation of accounting guidelines, we have not been able to provide for this in our accounts to date as the performance fee can only be crystallised at year-end. However, having passed through a period of extreme market turbulence relatively unscathed and on a major assumption that market conditions have now stabilised, the performance fee could have an extremely significant and beneficial impact on our year-end results.”

The statement makes the caveat that uncertainty persists and changes in a jurisdiction such as Zimbabwe might yet have implications for Imara’s 2007-08 performance.

Mark Tunmer, Imara’s Group chief executive, noted: “In all our public utterances we have been extremely upbeat about Africa’s attraction as a low-correlation investment destination. But no one could have predicted the extent of the international credit crunch and the rapid strengthening of the sophisticated investor’s appetite for African equity and debt.

“On the marketing front, we were so confident we pressed ahead with the expansion of our Africa series of funds by creating a dedicated East African portfolio and we anticipated continued interest in the Africa-wide Imara African Opportunities Fund in view of its established track record.

“However, for purposes of business reporting as a listed Group, it is proper that we support positive pronouncements in the Press with a formal statement to our shareholders and the local investment community. This we’ve now done.”