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Johannesburg - Brimstone Investment Corporation [JSE:BRT] on Tuesday reported diluted headline earnings per share of 69.5c for the six months ended June 2011 from 149c a year ago. HEPS decreased to 81.2c from 149c.
This is its first reporting period following the unbundling and realisation of a portion of its investment in Life Healthcare Group Holdings [JSE:LHC] and the company described the results as "satisfactory."
Headline earnings declined 44% to R198m, partially due to the LHC transactions. Net profit before tax was R280m compared with a loss of R500 000 for the same period last year.
"Brimstone has entered a new cycle of growth, following the unlocking of R1.4bn in shareholder value last year, when we unbundled a portion of Brimstone's investment in Life Healthcare" commented CEO Mustaq Brey.
"In this context, we are pleased with the results, which reflect a satisfactory performance across the underlying portfolio."
Brimstone reported revenue of R874m for the period, compared with R892m a year ago. Sales and fee income from operating divisions increased by 19% to R840m.
Dividend income contracted to R35m compared to R185m in 2010, which included the LHC dividend. Significant fair value gains of R228m, versus 2010's fair value loss of R110m, in particular from LHC and Nedbank contributed to a pre-tax profit of R280m.
Lion of Africa Insurance, the country's largest black-owned short-term insurer, showed strong growth, with gross written premiums up 21.3% at R317.7m and net written premiums increasing by 30.2% to R233.9m.
As part of its strategy for growth, Brimstone significantly de-geared its balance sheet post the LHC transactions. As a result, finance costs for the reporting period reduced to R43m, from R113m a year ago.
Total assets decreased to R3.87bn against R4.97bn at June 2010, due to the LHC unbundling. Consequently the overall book net asset value (book NAV) of the Company is lower at R1.75bn from R2.74bn in 2010.
Brey pointed out that a more appropriate comparison of the company's total assets and NAV is with the financial year-end figures at end December 2010 as these reflect the effects of the LHC transactions. On that basis, total assets of R3.87bn and NAV of 1.75bn at the end of the first half of this year compares well with the figures of R3.62bn and R1.57bn respectively, at year end.
Brimstone's strategy is to invest in attractive businesses in its preferred sectors of healthcare, financial services, food producers, resources and property.
"With a view on further developing and diversifying the portfolio, we are exploring additional sectors for investments which meet our investment criteria, in addition to adding to our existing portfolio" Brey said.
"One such investment is Galaxy Gold, a South African gold mining and exploration company, where we now hold a stake of 10%," he concluded.
This is its first reporting period following the unbundling and realisation of a portion of its investment in Life Healthcare Group Holdings [JSE:LHC] and the company described the results as "satisfactory."
Headline earnings declined 44% to R198m, partially due to the LHC transactions. Net profit before tax was R280m compared with a loss of R500 000 for the same period last year.
"Brimstone has entered a new cycle of growth, following the unlocking of R1.4bn in shareholder value last year, when we unbundled a portion of Brimstone's investment in Life Healthcare" commented CEO Mustaq Brey.
"In this context, we are pleased with the results, which reflect a satisfactory performance across the underlying portfolio."
Brimstone reported revenue of R874m for the period, compared with R892m a year ago. Sales and fee income from operating divisions increased by 19% to R840m.
Dividend income contracted to R35m compared to R185m in 2010, which included the LHC dividend. Significant fair value gains of R228m, versus 2010's fair value loss of R110m, in particular from LHC and Nedbank contributed to a pre-tax profit of R280m.
Lion of Africa Insurance, the country's largest black-owned short-term insurer, showed strong growth, with gross written premiums up 21.3% at R317.7m and net written premiums increasing by 30.2% to R233.9m.
As part of its strategy for growth, Brimstone significantly de-geared its balance sheet post the LHC transactions. As a result, finance costs for the reporting period reduced to R43m, from R113m a year ago.
Total assets decreased to R3.87bn against R4.97bn at June 2010, due to the LHC unbundling. Consequently the overall book net asset value (book NAV) of the Company is lower at R1.75bn from R2.74bn in 2010.
Brey pointed out that a more appropriate comparison of the company's total assets and NAV is with the financial year-end figures at end December 2010 as these reflect the effects of the LHC transactions. On that basis, total assets of R3.87bn and NAV of 1.75bn at the end of the first half of this year compares well with the figures of R3.62bn and R1.57bn respectively, at year end.
Brimstone's strategy is to invest in attractive businesses in its preferred sectors of healthcare, financial services, food producers, resources and property.
"With a view on further developing and diversifying the portfolio, we are exploring additional sectors for investments which meet our investment criteria, in addition to adding to our existing portfolio" Brey said.
"One such investment is Galaxy Gold, a South African gold mining and exploration company, where we now hold a stake of 10%," he concluded.
