Cape Town - Despite tough trading conditions for two subsidiaries contributing to a drop in earnings, Brimstone declared a dividend of 42 cents per share - unchanged from the previous year.
Brimstone released its results for the financial year ended December 31, 2017 on Tuesday.
The group said in a statement that its newly-listed subsidiary Sea Harvest recorded excellent results, which contributed positively to earnings.
Brimstone reported a profit of R147m for the year compared to a profit of R197m in the previous year. It regards this as a considerable improvement from the loss of R201m reported for the six months to June 2017.
Dividends received were R223m, down from R339m in the previous year. Fair value gains improved to R71m from losses of R70m reported in the previous period.
Intrinsic Net Asset Value (INAV) decreased by 15.9% to R4.3bn at December 31, 2017 from R5.1bn at December 31 2016. This translates to an INAV of R18.00 per share at December 31, 2017 and a share price discount to INAV of 27.8% and 37.5% on the Brimstone Ordinary Shares and N Shares respectively, the group explained. Its net asset value increased by 14.7% to R2.8bn.
Brimstone executive chair Fred Robertson attributed the results to tough trading conditions in the economy last year, which were seen in many of its portfolio companies.
“To that extent our dividends received from investee companies decreased by 34%,” he said.
“Brimstone’s subsidiary Sea Harvest has performed remarkably well after having successfully listed on the JSE last year. This resulted in a positive contribution of R786m to our net asset value."
Sea Harvest reported earnings before interest and tax of R383m, an increase of 53% from the prior year and profit after tax of R267m, up by 103% from the prior year.
Investments in Equites and Stadio alone contributed R353m in fair market value adjustments.
Subsequent to year-end Brimstone disposed of shares in Life Healthcare and its entire stake in Tiger Brands, allowing the company to reduce debt by R633m.
Brimstone CEO Mustaq Brey said this year the group will be paying its 16th consecutive dividend and for the first time it is giving shareholders the option of choosing a cash dividend or a scrip dividend.
“We are confident that our long-term investment vision and the group’s focused management, which allows us to make positive interventions when required, will continue to deliver tangible value and profit for our shareholders,” said Robertson.
By mid-afternoon on Tuesday the Brimstone share price was trading up 0.09% at R11 per share.
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