Makalani grows invested assets 223% at interims

Makalani Holdings posted a satisfying set of results for the six months to December 2006, with total invested assets rising to R1.78 billion, with a solid rise in earnings and distributions to unitholders.

"This marks an excellent turnaround from the position six months prior to this," says Makalani CEO Vusi Mahlangu, "All of our new investments have been of an excellent quality."

Total invested assets grew by R1.23 billion, or 223%, compared with the eight months to 31 December 2005, or R688 million when compared with 30 June 2006's R1.1 billion. This was thanks to a number of large transactions, including the most recent R320 million preference share investment in empowerment firm True Class, to fund its investment in Sandown Motors.

Headline earnings per linked unit rose to 518 cents from 450 cents for the eight months to 31 December 2005, a 15.1% increase, while the total distribution per linked unit rose 11.2% to 446 cents (401 cents at 31 Dec 2005) and the total distribution yield per linked unit rose from 5.9% to 9.4%.

The pre-tax yield on invested assets rose to 14.8% from 12.9% at 30 June 2006, while net asset value per linked unit rose to R105.27 from R103.03, excluding a distribution of 299 cents paid in October 2006.

Makalani also repurchased approximately R257 million (10.28%) of its own linked units in the period.

"The period under review was a very busy one in terms of transactions," says Makalani CIO Sydney Mhlarhi, "We are pleased to have seen a number of quality assets come into our portfolio, resulting in further diversification our asset base."

The increase in invested assets meant that Makalani was able to reduce the interest on cash portion of its income from 71% to 33%. The maturity profile of the portfolio has also lengthened, says Mhlarhi.

"Our level of invested assets now sits at 75% of assets, which gives us critical mass but still leaves us with a healthy R500 million to invest."

Mhlarhi says the outlook for Makalani is promising, with a healthy profile of potential investments.

"Our strategy remains to grow the portfolio with quality assets at attractive yields," he says.