Cape Town - Sekunjalo shareholders will no doubt breathe a sigh of relief when noting that its main investment, Premier Fishing, managed a strong operational turnaround in the second half of the year to end-August.
But any optimism around Sekunjalo's much-improved profit showing will be offset by concerns around the group's determination to back its ailing healthcare arm.
Results released on Wednesday morning showed Sekunjalo generating operating profits of R16m, a vast improvement on the R68m operating loss notched up last year. Cash flow was a reassuring R32m, but no dividend was declared.
The group's fishing and informatics divisions were the star performers, with the new enterprise development division also chipping in.
Sekunjalo CE Mo Kajee said Premier Fishing continued to improve its operating profits, thanks to positive performances from west and south coast rock lobster divisions as well as the squid operations. "These are all prized in international markets."
Premier, as promised earlier this year, recovered from an interim operating loss of about R11m to shift into the black to the tune of R26m. Premier's turnover, however, was down slightly at R274m for the year with the pelagic business continuing to show losses.
Kajee said the much improved showing at Premier was due to cost containment and ongoing restructuring.
The prospects for Premier in the new financial year have been much enhanced by the weaker rand (50% of the company's revenue is export-based) and by the lower fuel price, a large cost component in fishing fleets.
Sekunjalo's informatics division also performed admirably, nearly doubling its operating profits to R15m after concluding "major licensing deals" and a major tender with the Gauteng Department of Health.
Sekunjalo's relatively new Enterprise Development Enterprise division - comprising the espAfrika/Cape Town International Jazz Festival and Tripos Travel - contributed profits of almost R5m.
The fledgling financial services business continued to trade in the red, but there is progress operationally.
In the year to end-August operating losses were reduced to R9m off markedly higher turnover of R126m.
Healthcare still problem child
Last year Sekunjalo's financial services division reported a R21m operating loss from turnover of R73m.
The most disappointing aspect of Sekunjalo's results remained the healthcare division, which managed an R8m operating loss from turnover of just R14m.
Earlier this year Sekunjalo injected roughly R60m into the business in form of a rescue rights issue. It is difficult to justify such an investment, especially since the development pushed Sekunjalo's overdraft to R86m.
It is quite possible that without the extra burden of funding healthcare, Sekunjalo could well have afforded to pay out a dividend for the year to end-September 2008.
Kajee reiterated that Sekunjalo Healthcare aimed to be a leading healthcare company in SA through "the acquisition, marketing and sales of market relevant products".
He said the division has been significantly restructured for turnaround, pointing out that the operating loss was well down on last year's loss of over R40m.
Sekunjalo Healthcare comprises niche businesses like Sekpharma (antibiotics and dermatalogical products) and Rapimed (medical diagnostics).
- Fin24.com