Cape Town - African Equity Empowerment Investments [JSE:AEE] (AEEI) - formerly Sekunjalo Investments Limited - has posted half year results ahead of the forecast range.
The JSE-listed black economic empowerment company reported on Wednesday that the group’s interim financial results for the six months to February showed group revenue up by 7% from the prior 2014 as a result of strong operational performances of the underlying businesses.
Operating profits increased by 36% and profit before taxation was up by 40%. The group’s asset base increased by R286m to R1 245m, an increase of 30%, mainly due to the growth in its operations as well as its strategic investments. Tangible net asset value was up by 22%.
Earnings and headline earnings per share increased by 125% and 188% respectively as a result of the operational performance of the subsidiaries.
The group said its main objective was to increase its total and net asset value (NAV) by improving the operational performance of its underlying businesses and investments due to the strength of the business fundamentals.
“Through the rigorous implementation of this strategy, a remarkable improvement is already evident within the first six months," said AEEI group CEO Khalid Abdulla.
The group generated more cash (R20m) from its operations compared to the prior period. This performance was a result of improved operational efficiencies, he said.
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All of the group’s subsidiaries have shown good profit performance and growth as well as an increase in asset value.
Profit before tax for the period increased by R13m to R46m, driven mainly by the organic growth of the subsidiary companies.
"Our major operations in marine and IT have shown outstanding performances due to strategies to extract efficient organic growth and synergies within the broader group," said Abdulla.
“My executive teams have been intentionally focused on driving the strategy in their operations and we expect a robust and consistent increase in business growth and shareholder value going forward.”
The group has previously alluded to acquisitive growth and is well positioned to increase its investments. It has alerted shareholders that it is in a closed period while negotiations are taking place.
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If successful, the negotiations will have a positive impact on the company’s asset base, the company said in a statement.
The performance of the group’s investments in large multinational companies British Telecom Communication Services, SAAB South Africa and the Pioneer Foods Group have also contributed to the group’s financial position.
“The performance to date has to be applauded as traditionally the second half of the group’s performance produces significantly stronger results due to the seasonal nature of some of the businesses,” said Prof. Vukile Mehana, non-executive chair of the AEEI board.
“We are working towards significant growth in the second half of the year and the years to come. This would not have been possible without our people and their continued focus on operating efficiencies and better portfolio management which remain the key drivers of our performance”.
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