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JSE-listed African Equity Empowerment Investments Limited (AEEI), a diversified investment and empowerment company announced its interim results for the six months ended 28 February 2018.
It is the JSE's largest black economic empowered (BEE) listed entity.
Its performance is attributed to strong contributions from all its divisions, with a combination of organic and acquisitive growth and the successful separate listing of its Technology business, AYO, the company said in a statement.
AEEI has shown consistent above-market growth and has out-performed the JSE index over the past few years.
The consistent increase in earnings and asset growth during a period of ongoing economic volatility demonstrates the group’s efficient and effective business model during challenging market conditions.
Group revenue increased by 33% from R455m to R604m. This was mainly due to significant revenue growth achieved from AEEI’s holding in the technology division.
Operating profit increased substantially by 1 326% from R587m to R8 371m due to consistent organic and acquisitive growth, and efficiencies achieved in all its divisions. The successful separate listing of AYO also contributed significantly.
Profit before tax, excluding fair value/gain “cash profit”, increased by 455% from R34m to R188m. The company said this is testament to the solid management of the underlying operational management.
Group earnings grew by 1 773% from R449m compared to the prior interim period, reflecting R8 412m, while the earnings increased significantly as a result of a once-off gain from a disposal of one of AEEI’s subsidiaries.
Headline earnings
Headline earnings per share (HEPS), however, decreased from 92.71c to 40.06c, while earnings per share (EPS) increased from 92.65c to 1 708.13c for the period under review.
The decrease in HEPS is as a result of the prior interim period being restated and includes a once-off fair value adjustment prior to BT Communication Services South Africa (BT) becoming an associate.
Profit before tax for the period under review increased by 1 343% from R585m to R8 443m, with strong returns from AEEI’s diversified portfolio and the gain from the considered disposal of subsidiaries.
AEEI’s strategy to increase its asset base and broaden its portfolio is evident as the increase in its total asset base increased significantly by 351% from R2 151m to R9 696m.
This is mainly due to the growth in current assets and the value unlocked on the listing of Premier Fishing and Brands Limited as well as its associate AYO Technology Solutions Limited, and the consistent increase in underlying investments as compared to the prior period.
Net Asset Value (NAV) for the Group increased by 492% from R1.4bn to R8.3bn with the NAV per share increasing by 506% from 279.65 cents in the prior period to 1 694.67cents.
Net cash generated from operating activities increased by 23% compared to the prior period from R35m to R43m.
Working capital has been provided for growth and if one adds back the working capital provision, net cash generated from operating activities has increased from R35m to R146m after providing for the working capital needs of R103m.
AEEI announced an interim dividend of 3.30 cents per share, a 65% increase from 2.00 cents paid in 2017. AEEI also paid a total dividend of 7.50 cents per share for the financial year ended 31 August 2017.
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