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Brimstone 'resilient' in volatile market

Feb 29 2016 15:19
Carin Smith

(iStock)

Company Data

BRIMSTONE INVESTMENT CORPORATION LIMITED [JSE:BRN]

Last traded 8
Change 0
% Change 0
Cumulative volume 150000
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Cape Town - Brimstone Investment Corporation [JSE:BRN] reported a loss of R668.1m for the year to December 2015 compared to a profit of R277.8m in the prior year, it announced in Monday.

This was mainly attributable to volatile market conditions which negatively impacted the value of certain of its listed holdings, and operating losses at subsidiary Lion of Africa Insurance Company.

Notwithstanding these factors the company said it still received strong dividend income and it declared a 35 cent dividend payable to all shareholders. The company also said its net asset value proved resilient.
 
CEO Mustaq Brey said, despite the loss at Lion of Africa Insurance Company, its other subsidiaries, namely Sea Harvest and House of Monatic, both reported profits in challenging market conditions.

“We are pleased with the performance of our other subsidiaries and associate companies, but are naturally disappointed with the insurance subsidiary which has had some operational challenges we are now rectifying," said Brey.

"The loss is attributable to a decrease in premium income and large claims and one-off charges incurred. We have put in place a new management team and we have jointly developed a focused strategy to return the company to profitability over the next few years."

READ: Investing in SA's economic gloom

At Sea Harvest, the company increased operating profit by 10% to R121.6m and Ebitda by 9% to R205m. Revenue grew by 1% despite a 5% reduction in fish catch volumes.

“Sea Harvest continued with its capital investment programme by investing in an additional freezer trawler as well as upgrading its fresh fish plant. In the last two years over R200m has been invested in vessels and plant upgrades,” said Fred Robertson, executive chair of Brimstone.

Sea Harvest acquired a 19.9% stake in Mareterram - a vertically integrated agri-business which listed on the ASX in Australia - an investment Robertson said secures Sea Harvest’s route to a critical market and provides a platform for future international growth.

Associate and joint venture companies which performed well during the year under review include Oceana Group where Brimstone received R80.6m in dividends; Aon Re Africa which paid Brimstone dividends of R12.9m (2014: R4.5m) and at Life Healthcare, where Brimstone received dividends of R80.9m. Brimstone remains one of the largest shareholders in Life Healthcare.

During the period under review Brimstone sold its investment in The Scientific Group for a profit of R44.8m. Brimstone increased its shareholding in the Grindrod Consortium SPV from 59.2% to 72.4% and acquired 4.2 million Grindrod shares directly. Brimstone also subscribed for 28 million shares in JSE-listed specialist logistics property developer and owner, Equites Property Fund for R350m, representing a 10% shareholding in Equites.

The company sold its shares in Nedbank realising R568.5m, while in Old Mutual, Brimstone’s BEE transaction had matured on May 1 2015, which left Brimstone with 7.4 million shares after repaying its debt. It then sold 3.4 million shares, realising R131.4m, and subsequent to the year-end, Brimstone sold the remaining 4 million shares for R148.3m.

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