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Cape Town – Empowerment group Sekunjalo Investments [JSE:SKJ] posted a R3.7m profit for the interim period to end-February 2010 – but a lack of operational cash flow overshadowed directors’ claims of a "strong recovery".
While Sekunjalo – which saw its key Premier Fishing subsidiary returning to profits – reported profit from operations of nearly R12m the company’s cash flow statement showed no commensurate profit inflow.
Operational cash flow was reflected as an outflow of almost R15m.
After tallying the cash flows from investing activities (+R10.7m) and financing activities (-R20.7m), Sekunjalo saw its positive cash position of R7.5m at the end of the 2009 financial year reversed into a deficit of over R17m.
Sekunjalo’s balance sheet showed an overdraft of R49m (up from R44m at the end of August 2009) with available cash reducing from R51m at the end of August 2009 to R32m.
More critically, though, the income statement showed that finance costs (of around R6.7m) eroded more than half of Sekunjalo’s operating profits.
But Sekunjalo CEO Khalid Abdullah remained upbeat.
He believed the company had low gearing and was well positioned to fund future growth of its businesses as well as to unlock value in its underlying investments.
In his divisional review, Abdullah said Premier Fishing – Sekunjalo’s biggest investment by value and turnover – performed satisfactorily despite the effects of the stronger rand on sales and depressed international prices.
Premier earns much of its keep from exporting south coast and west coast lobster.
He said the restructuring process of Premier Fishing had successfully been completed. Premier generated R4.1m in operating profit off turnover of R70.6m
Sekunjalo’s Informatics arm recorded profits of R3.8m, but the smaller healthcare and financial services investments continued to trade in the red.
There were no new developments as regards Sekunjalo’s much mooted biotechnology investment, Bioclones.
Abdullah said Bioclones continued to prepare for a listing on an international stock exchange.
"Although investor appetite is slowly improving abroad, market conditions are not yet optimal."
Looking ahead Abdulla said Sekunjalo, recently named as “most empowered company on the JSE”, was continuously looking for strategic opportunities – perhaps a significant comment considering that Sekunjalo issued a cautionary announcement on Tuesday referring to talks with an unnamed third party.
- Fin24.com
While Sekunjalo – which saw its key Premier Fishing subsidiary returning to profits – reported profit from operations of nearly R12m the company’s cash flow statement showed no commensurate profit inflow.
Operational cash flow was reflected as an outflow of almost R15m.
After tallying the cash flows from investing activities (+R10.7m) and financing activities (-R20.7m), Sekunjalo saw its positive cash position of R7.5m at the end of the 2009 financial year reversed into a deficit of over R17m.
Sekunjalo’s balance sheet showed an overdraft of R49m (up from R44m at the end of August 2009) with available cash reducing from R51m at the end of August 2009 to R32m.
More critically, though, the income statement showed that finance costs (of around R6.7m) eroded more than half of Sekunjalo’s operating profits.
But Sekunjalo CEO Khalid Abdullah remained upbeat.
He believed the company had low gearing and was well positioned to fund future growth of its businesses as well as to unlock value in its underlying investments.
In his divisional review, Abdullah said Premier Fishing – Sekunjalo’s biggest investment by value and turnover – performed satisfactorily despite the effects of the stronger rand on sales and depressed international prices.
Premier earns much of its keep from exporting south coast and west coast lobster.
He said the restructuring process of Premier Fishing had successfully been completed. Premier generated R4.1m in operating profit off turnover of R70.6m
Sekunjalo’s Informatics arm recorded profits of R3.8m, but the smaller healthcare and financial services investments continued to trade in the red.
There were no new developments as regards Sekunjalo’s much mooted biotechnology investment, Bioclones.
Abdullah said Bioclones continued to prepare for a listing on an international stock exchange.
"Although investor appetite is slowly improving abroad, market conditions are not yet optimal."
Looking ahead Abdulla said Sekunjalo, recently named as “most empowered company on the JSE”, was continuously looking for strategic opportunities – perhaps a significant comment considering that Sekunjalo issued a cautionary announcement on Tuesday referring to talks with an unnamed third party.
- Fin24.com
