Publications
Partners
Johannesburg - Alexander Forbes Equity Holdings (AFP) has reported a reduced headline loss per share from 55c to 31c for the year ended March.
The group's attributable loss for the year amounted to R413m compared to a R136m loss previously.
However, the group believes it has demonstrated resilience in a year of turbulent conditions for the financial services industry, with income from operations increasing by 8% to R5.4bn.
Trading results declined marginally on the back of subdued performances from South Africa and its international financial services as a direct result of the difficult trading conditions, it said.
In addition the downturn in equity markets also affected Investment Solutions. As such, the group delivered a respectable trading result of R992m for the period - down 4% year-on-year.
"The protracted effects of a harsh global business environment have been challenging, particularly for the financial services industry, but against the backdrop of this environment Alexander Forbes has shown resilience from its diverse businesses, revenue streams and client base, delivering credible results," the group said.
"The operating loss reported by the ultimate holding company, Alexander Forbes Equity Holdings (Pty) Limited (and as a result also the listed investment vehicle Alexander Forbes Preference Share Investment Limited), is mainly a result of the amortisation and write-off of intangible assets and goodwill which arose on consolidation following the acquisition by the private equity consortium.
"Furthermore, interest costs related to the funding structure also increases the reported loss by these entities. It should be noted that these amortisation charges, impairment write-offs and a large component of the interest costs are non-cash items," the group added.
John van Wyk from Actis, speaking on behalf of the private equity consortium said: "The characteristics of Alexander Forbes which made it an attractive acquisition - diversity of income stream, strong cash flow and growth initiatives - have protected it now in the downturn, particularly in South Africa, and position it well for when the economy picks up again.
"Subsequent to year-end, the decision to refinance a substantial (R1.5bn) portion of the component of the group's funding structure also demonstrates our confidence in the group by equipping it to take advantage of opportunities as required and pursue growth in areas, such as the Alexander Forbes Insurance business and the retail operations of the Financial Services division benefiting individual pension fund members."
Group chief executive Bruce Campbell commented that "the Alexander Forbes clearly demonstrated the value of the group's diversification of operations by delivering a credible result in the extremely tough global economic environment and difficult trading conditions."
- I-Net Bridge
