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Cape Town – Brimstone Investment Corporation [JSE:BRT] reported a profit for the six months to June 2016 of R48.3m compared to a loss of R480.1m in the previous comparative period.
While revenue increased by 10% to R1.1bn, operating profit increased by 103% to R123m. Total assets at the end of the period were reported at R7.3bn.
According to executive chair and co-founder of Brimstone, Fred Robertson, the main contributors to this improvement were the turnaround at subsidiary Lion of Africa Insurance Company, the increase in fair value of investments including Life Healthcare and Tiger Brands, and no further equity accounted losses in the Grindrod joint venture structure.
“Our three largest investments Oceana, Life Healthcare, and Sea Harvest which comprise over 65% of our gross intrinsic asset value, all now have significant off-shore exposure through trading and investments in foreign geographies, including USA, India, Poland, and Australia. The Group will continue to maintain its positive long-term view on its investments and pursue value accreting opportunities,” said Robertson.
He pointed out that Brimstone indicated earlier this year that it would continue to rationalise its portfolio. During the period the group disposed of its entire interest in Rex Trueform and African & Overseas Enterprises and realised R76.9m. The company also disposed of its entire shareholding in Taste Holdings for R143.4m.
During question time Robertson was asked about the decision to dispose of its Taste shares. The general answer given was that there was a difference of approach between the two companies.
"Hopefully over the next few years our spread of investments will be even wider across the world," said Robertson.
"Our aim is always to create value for shareholders over a sustained period of time evidenced by long-term growth in the share price, dividends paid and intrinsic net asset value," said Robertson. The strong empowerment credentials of the company is also of great importance to him.
Financial director Geoff Fortuin said during the interim period Brimstone has increased its stake in Sea Harvest to 85%. Sea Harvest, in turn, increased its stake in the Australian listed Mareterram to 56% at a cost of R203m in July 2016. Brimstone's investment in the Oceana Group makes up 19.7% of its portfolio and accounts for 31% of its gross intrinsic asset value.
In line with previous years, no interim dividend is declared for the half year.
Robertson said the group will continue to maintain its positive long-term view on its investments and pursue value accreting opportunities.
