African Rainbow Capital Investments (ARC), a firm founded by billionaire Patrice Motsepe, has posted a double-digit rise in its portfolio valuation for its 2022 year, given a boost by gains from its key digital businesses, TymeBank and data-focused mobile operator Rain.
ARC's intrinsic portfolio value rose 11.3% to R13.6 billion in the investment holding company's year to end-June, with the effective value of its TymeBank stake rising a fifth to R1.41 billion, while Rain's valuation gained 9.7% to R3.6 billion.
TymeBank, about a tenth of the ARC Fund's value, has now reached 5 million customers, ARC said on Tuesday, 36 months after launch. The firm says it was increasingly focused on tracking customer activity and ensuring new product roll-outs.
The fair value of the TymeBank investment was adjusted to reflect a successful capital raise in late 2021, during which Chinese tech giant Tencent and the UK development financier the CDC Group invested into TymeBank and Tyme Global. TymeBank received $142.5 million (R2.4 billion).
Rain, more than a quarter of the fund's value, had successfully participated in the SA government's spectrum auction, when it spent R1.43 billion on allocations that are expected to significantly enhance its competitiveness.
Rain had also achieved its budgeted R1 billion in earnings before interest, taxation, depreciation and amortisation (ebitda) for its year to end-February, ARC said, adding that demand for its 4G and 5G products had been sustained throughout the pandemic, even as employees started returning to their offices.
ARC on Tuesday made no mention in its results about its recent expression of interest in a tie-up between Telkom and Rain. The Takeover Regulation Panel in August had ordered a withdrawal of the statement, given it hadn't provided the prior approval required by law.
ARC also did not declare a dividend, which is part of its strategy as a long-term investor. Just under half of the ARC Fund’s intrinsic value is made up of early-stage businesses, including Rain, TymeBank and Tyme Global.
In early trade on Tuesday ARC's shares were up almost 6% to R5.92, having fallen almost 13% in the year so far.