Wrap Text
Audited financial results for the financial year ended 31 March 2022
BRAIT P.L.C.
(Registered in Mauritius as a Public Limited Company)
(Registration No. 183309 GBC)
Share code: BAT ISIN: LU0011857645
Bond code: WKN: A2SBSU ISIN: XS2088760157
LEI: 549300VB8GBX4UO7WG59
(“Brait”, the “Company” or the “Group”)
AUDITED FINANCIAL RESULTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2022
The Board of Directors (“Board”) hereby reports to Brait’s shareholders (“Shareholders”) on the Group’s
audited results for the financial year ended 31 March 2022.
GROUP FINANCIAL HIGHLIGHTS
• Premier:
o Continued strong operational performance driven by market share gains, volume growth, input
costs pass-through and cost management/operational leverage
o Performance enhanced by completion of Mister Sweet acquisition and debt refinancing
o Company has completed its IPO readiness plans and will potentially proceed with the listing, market
conditions permitting
• Virgin Active:
o Significant year completing the Restructuring Plan and debt refinancings, raising of GBP88.4 million
(R1.8 billion) of new capital in Virgin Active at Brait’s valuation and appointment of new
management (Virgin Active CEO, CFO and VASA MD)
o Strong growth in the membership base since the start of the calendar year across the key territories,
from 754k active members as at 31 December 2021 to 847k active members currently, with a
significant reduction of the members on freeze
o The capital raise and amalgamation of Kauai and Nü chains of healthy fast casual restaurants,
which remains subject to regulatory approvals, will expedite Virgin Active’s recovery back to 2019
operational levels and accelerate the transition into the broader wellness space
• New Look:
o Strong performance for 3 quarters of FY22 offset by underperformance in October – December
2021 due to Omicron, with lower than expected footfall and supply chain issues
o Recovery in operating performance since the beginning of the calendar year with a good start to
FY23
• Brait:
o Runway to execute monetisation strategy post the R3.0 billion capital raised from December 2021
issuance of Exchangeable Bonds by wholly owned subsidiary Brait Investment Holdings (“BIH”)
(“December 2021 Capital Raise”) listed on the Main Board of the JSE and the Official Market of
the Stock Exchange of Mauritius Ltd (“SEM”)
o Net proceeds raised partially repaying Brait’s committed revolving credit facility (“BML RCF”),
facilitating its amendment and extension to 30 June 2024 with a facility limit of R3.0 billion
o Awarded 2nd place in the inaugural Intellidex Investor Relations Mid Cap awards
o Post year end, realised Brait IV’s investment in Consol at a 16% premium to its September 2021
valuation
o NAV per share of R8.37, a 5.9% increase on FY21 reported R7.90 (2.9% increase on 1H22: R8.14)
o Available cash and facilities:
- R0.6 billion at reporting date
- Post the Consol realisation, R1.0 billion
o As an investment holding company, Brait's key reporting metric is NAV per share. From an IFRS
reporting perspective, Brait's earnings per share and headline earnings per share is 44 cents
(FY2021: 34 cents)
REPORTED NAV PER SHARE
The following disclosure changes applicable to FY22 have had no impact on the Group’s audited NAV per
share of R8.37:
• During its term of domiciliation in Malta, Brait was legally required to present its financial results in EURO,
resulting in the use of two presentation currencies, the SA Rand and the EURO. Following the transfer in
September 2021 of Brait’s registered office from Malta to Mauritius (the “Redomiciliation”), the Board has
elected to present the Group’s results solely in SA Rand.
• The issuance of the BIH’s Exchangeable Bonds by BIH has resulted in BIH’s classification changing to
that of an Investment Entity. In terms of IFRS10: Consolidated Financial Statements, this results, effective
1 October 2021, in the prospective exemption for the Group from consolidation, with the Group audited
financial results accordingly reflecting the fair value of the investment in BIH as opposed to the “look-
through” consolidation method applied in the previous financial years.
At the reporting date, the composition of the respective peer groups remain unchanged. Premier is valued
using a Last Twelve Months (“LTM”) post-IFRS16: Leases valuation multiple of 7.6x, compared to the peer
average spot multiple of 7.7x. In the case of Virgin Active and New Look, where maintainable earnings are
based on an estimate sustainable EBITDA level, the reference measure considered is the pre-IFRS16 peer
average multiple for the corresponding forward period:
• Virgin Active is valued using a two-year forward multiple of 9.0x, which represents a 10% discount to the
peer average two-year forward multiple of 10x.
• New Look is valued using a one-year forward valuation multiple of 5.0x, which represents a 25% discount
to the 6.7x peer average one-year forward.
HIGHLIGHTS FOR THE GROUP’S INVESTMENT PORTFOLIO
Premier (49% of Brait’s total assets)
• A leading South African FMCG manufacturer, offering branded and private label solutions, Premier
delivered a strong FY22 performance despite the headwinds faced from high commodity prices.
• Group results for the financial year ended 31 March 2022 (quoted on a post-IFRS16 basis):
o Revenue of R14.5 billion, a 16% increase on FY21 revenue of R12.5 billion.
o Adjusted EBITDA of R1.5 billion, a 36% increase on FY21 Adjusted EBITDA of R1.1 billion
o Adjusted EBITDA margin: 10.3% (FY21: 8.8%)
o Return on invested capital: 14.8% (FY21: 11.5%)
o Operating cash conversion (post maintenance capex): 67% of Adjusted EBITDA (FY21: 97%)
o Net third party debt leverage ratio of 1.6x (FY21: 1.9x)
• Premier completed the integration of its R419 million bolt-on acquisition of the Mister Sweet confectionary
business and has realised most of the merger synergies identified at the time of the transaction. The results
of Mister Sweet have been included in the FY22 results for the 10 months since 1 June 2021.
• Divisional highlights for the financial year ended 31 March 2022:
o Premier’s MillBake business (82% of group revenue) has continued its strong momentum,
significantly outperforming its peers and successfully passing on inflationary increases in a tough
trading environment:
- Revenue growth of 12.5% to R11.9 billion, comprising volume growth of 6.0% and average
price inflation of 6.5%
- Adjusted EBITDA, excluding head office costs, increased by 32% to R1.4 billion, with Adjusted
EBITDA margins expanding by 170bps to 11.7%
o Premier’s Groceries and International division (18% of group revenue) increased revenue by 35%.
Adjusted EBITDA, excluding head office costs, increased by 24% to R200 million, driven by
significant historic capex spend, brand loyalty and product expansion:
- Sugar confectionery revenue increased by 238% to R763 million with revenue from Mister
Sweet contributing R540 million for the 10 months since acquisition
- Beverages revenue decreased by 6.5% to R80 million
- Home and personal care revenue increased by 6% to R651 million
- CIM revenue increased by 10.4% to R1,174 million
• Capital expenditure for the group of R519 million (FY21: R504 million) comprises R186 million maintenance
(FY21: R244 million) and R333 million expansionary (FY21: R260 million), largely relating to the new
Pretoria mill and bakery, which was recently commissioned.
• Premier repaid Brait R173 million of shareholder funding during the current financial year (FY21: R237
million), increasing Brait’s share of realised proceeds received to date to R1,905 million. Post year-end, in
May 2022, Brait converted the preference shares it held in Premier to ordinary shares, and Premier settled
the outstanding shareholder loan amount owing to Brait through the issuance of ordinary shares in Premier,
thereby settling in full Brait’s shareholder funding to Premier.
• Valuation as at 31 March 2022 (performed on a post-IFRS16 basis):
o Maintainable EBITDA of R1,505 million, which is referenced to Premier’s LTM Adjusted EBITDA,
is applied to a valuation multiple of 7.6x, compared to the peer average LTM multiple of 7.7x.
o Net third party debt of R2,008 million is based on Premier’s reported net third party debt of R2,379
million (FY21: R2,098 million), adjusted to exclude R371 million mostly in respect of capital
expenditure on the new, recently commissioned, Pretoria mill and bakery.
o Brait’s shareholding in Premier is 98.5%. Brait’s equity value participation at reporting date is 96.5%
(FY21: 97.1%) due to the dilutionary impact of the management incentive scheme put in place in
FY21. Shareholder funding participation remains unchanged at 100%.
o Premier’s unrealised carrying value at the reporting date is R9,266 million, reflecting a 22% increase
for the financial year (FY21: R7,597 million) and comprising 49% of Brait’s total assets (FY21: 45%).
Virgin Active (44% of Brait’s total assets):
• One of the leading international health club operators, Virgin Active’s results for the financial year ended
31 December 2021 have been significantly impacted by Coronavirus lockdown restrictions. All territories
have been operational since 30 October 2021.
• Significant year completing the Restructuring Plan and debt refinancings, raising of GBP88.4 million (R1.8
billion) of new capital in Virgin Active at Brait’s H12022 Enterprise Value and appointment of new
management. The amalgamation of Kauai and Nü chains of healthy fast casual restaurants remains
subject to regulatory approval. These transactions will expedite Virgin Active’s recovery back to 2019
operational levels and accelerate the transition into the broader wellness space.
• Territory update
o Southern Africa:
- Clubs were subject to capacity restrictions in line with lockdown regulations until February 2022.
Since the relaxation of Coronavirus restrictions and the removal of capacity restraints in Q1
2022, Virgin Active South Africa has shown good traction on membership recovery.
- Sales have recovered to levels similar to 2019 levels with active members growing from 497k
as at 31 December 2021 to 557k as at May 2022. Membership engagement and usage levels
continue to improve and termination levels have fallen, comparing favourably to 2019 levels.
- Focused spend to rejuvenate the estate and drive further membership engagement during the
next few years.
o Italy:
- Restrictions in Italy have resulted in a prolonged negative impact on membership growth in
2022. Clubs reopened in May 2021, having been closed since October 2020, subject to certain
restrictions (swimming pools, showers, saunas closed) and proof of vaccination being required
to enter.
- All restrictions were lifted in March 2022 resulting in increased sales, with strong performance
recorded in residential clubs and a positive uptake in new clubs.
- The active membership base has increased from 106k in December 2021 to 123k as at May
2022.
- Membership engagement is strong and club usage is at 96% of 2019 levels.
o UK:
- Clubs reopened in April 2021, having been closed since December 2020, with group exercise
classes in operation since May 2021.
- Since the removal of all restrictions in July 2021, the UK has delivered good performance in
residential clubs, however the recovery in London Corporate clubs remains slower with
changing working habits.
- The active membership base has increased from 107k in December 2021 to 120k as at May
2022.
- Termination levels have fallen and club usage is at 101% of 2019 levels, with strong
membership engagement and an increased uptake of group exercise and personal training.
o Asia Pacific:
- Australian clubs were subject to repeated short lockdowns (circuit-breakers) since February
2020, with all clubs closed in August 2021. Sydney reopened on 11 October 2021 and clubs in
Melbourne reopened on 30 October 2021. Membership recovery has been slow as restrictions
have gradually been eased.
- Thailand closed its gyms in April 2021, re-opening on 1 October 2021, however clubs are still
subject to operating restrictions. Singapore closed its gyms from May 2021 to June 2021 but
after a period of trading, closed again in July 2021 before reopening in August 2021.
- Recovery in Asia Pacific has been slower than expected due to ongoing restrictions.
- The active membership base has increased from 43k in December 2021 to 47k as at May 2022.
- Club usage for Asia Pacific is at 91% of 2019 levels.
• Valuation as at 31 March 2022 (performed on a pre-IFRS16 basis):
o Maintainable EBITDA is based on a look-through to a 2-year forward estimated sustainable level
of GBP110 million, which is 23% less than the GBP142 million actual EBITDA achieved in its pre-
Covid affected financial year ended 31 December 2019.
o The valuation multiple has been maintained at 9.0x, which represents a 10% discount to the peer
average two-year forward multiple of 10.0x.
o Net third party debt of GBP353.2 million per the March 2022 management accounts has been
increased by GBP27.2 million to GBP380.4 million. The normalisation adjustment applied takes
consideration of the estimated effect of working capital and costs deferred during the lockdowns
(March-21 net debt of GBP455 million included a GBP58 million normalisation adjustment).
o Post the GBP88.4 million capital raise, Brait’s equity and shareholder funding participation
decreased to 70.6% (FY21: 79.4%).
o Brait’s resulting unrealised carrying value for its investment in Virgin Active at reporting date is
R8,282 million (FY21: R7,970 million) and comprises 44% of Brait’s total assets (FY21: 45%).
New Look (4% of Brait’s total assets):
• New Look is a UK based multichannel fashion brand, operating in the value segment of the clothing,
footwear and accessories market.
• New Look’s completion of the CVA process and its recapitalisation have provided the funding and
operational flexibility to execute on its strategy:
• Solid performance for 3 quarters of FY22 offset by underperformance in October – December 2021 due to
the impact of Omicron in the lead up to Christmas, with lower than expected footfall and global supply
chain issues.
• Based on Kantar Worldpanel published data, New Look is Number 1 for women’s dresses and denim
clothing among the key 18-44s in the UK (by value) for the 24 weeks to 3 April 2022.
• Positive start to trading since the beginning of the 2022 calendar year.
• Valuation as at 31 March 2022 (performed on a pre-IFRS16 basis):
o Maintainable EBITDA is based on a look-through to a 1-year forward sustainable level of GBP55
million.
o The 1-year forward applied of 5.0x represents a 25% discount to the peer average forward
multiple of 6.7x.
o Net third party debt of GBP78.5 million (FY21: GBP86 million) includes an estimated GBP30.1
million (FY21:GBP47 million) normalisation adjustment, to take consideration of certain deferred
costs during the lockdown periods.
o Brait continues to hold 18.3% of the New Look shareholder loans/PIK facility and equity (17.4%
equity participation post dilution for management’s incentive plan).
o Brait’s resulting unrealised carrying value for its investment in New Look at reporting date is R672
million (FY21: R545 million) and comprises 4% of Brait’s total assets (FY21: 3%).
Other Investments (2% of Brait’s total assets):
Other Investments comprise Brait’s remaining private equity fund investments, mostly relating to Brait IV’s
investment in Consol, the largest manufacturer of glass packaging products on the African continent. As
previously announced, all conditions and approvals relating to the sale of Consol were fulfilled on 3 May 2022.
Brait’s share of R402 million proceeds, reflects the carrying value used at reporting date (16% premium to the
September 2021 carrying value).
GROUP LIQUIDITY POSITION
Reporting date
• As previously announced, post the December 2021 Capital Raise, the BML RCF, secured by the assets of
BML, was amended to have a facility limit of R3.0 billion, with agreed reductions as Brait de-gears, and
term extension to 30 June 2024. The BML RCF bears interest at JIBAR plus 4.0% repayable quarterly,
with the margin decreasing as utilisation reduces, with a right to rollup these quarterly interest payments.
• The reduction in the drawn balance on the BML RCF for FY22 of R0.9 billion is a function of the net R2.9
billion proceeds received from the December 2021 Capital Raise, offset by R1.7 billion investment in
Virgin Active and an interest accrual of R0.3 billion.
• The drawn balance at reporting date was R2.478 billion, resulting in an undrawn available facility of R532
million. Including the closing cash balance of R83 million, available liquidity at reporting date was R615
million.
• Brait is in compliance with all covenants at reporting date:
o BML RCF covenants are NAV based.
o Per the terms of the 2024 Convertible Bonds, Brait’s ‘Tangible NAV/Net Debt’ ratio is required to
be not less than 200%. The definition of ‘Net Debt’ per this covenant excludes the convertible and
exchangeable bonds, with Tangible NAV referenced to Brait’s net asset value.
Post balance sheet date liquidity position
Post receipt of the Consol proceeds of R402 million, available liquidity post balance sheet date is R1.017
billion.
UPDATE ON GOVERNANCE MATTERS
• Following the Redomiciliation, the dual listing of Brait’s 2024 Convertible Bonds and BIH Exchangeable
Bonds on the SEM completed on 30 November 2021 and 11 May 2022 respectively. The 2024
Convertible Bonds continue to trade on the Open Market (Freiverkehr) segment of the Frankfurt Stock
Exchange, with the BIH Exchangeable Bonds trading on the Main Board of the JSE.
• Since 1 March 2020, Ethos Private Equity Proprietary Limited (“EPE” or the “Advisor”) has been the
contracted investment advisor to Brait. The contract provided for a three-year tenor, with an annual
renewal thereafter at an initial cost of R100 million per annum with inflation linked increases:
o In FY21 EPE voluntarily reduced the advisory fee to R91 million in response to the Covid
pandemic. In recognition of the challenging environment due to Covid and the restructuring of the
Brait cost base, EPE volunteered to retain this fee level for FY22 (compared to the contracted
value of R105 million). In FY23, the advisory fee is set at R96 million (compared to a contracted
value of R110 million).
o The Board has approved a 1-year extension of the EPE advisory contract to 31 March 2024 at a
fee of R65 million.
o The annual Short Term Incentive (“STI”) serves to align the interests of Shareholders and the
Advisor in terms of value creation. The STI is based on pre-determined key performance
indicators focused on (i) progress on path to exit for the portfolio; (ii) growth in net asset value,
and (iii) capital and liquidity management. The Board approved an STI award for FY22 of R30
million (FY21: R23 million). This results in total fees to the Advisor in FY22 of R121 million (FY21:
R114 million).
o The Long Term Incentive Plan (“LTIP”) is accounted for as a contingent liability.
GROUP OUTLOOK
The December 2021 Capital Raise and refinancing of the BML RCF provides runway to execute Brait’s
strategy of maximising value through the realisation of its portfolio companies in the medium term. Virgin
Active has started to recover from the effects of the numerous Covid-induced lockdowns and this momentum
should continue. Premier’s strong performance has continued since the start of its financial year. New Look is
benefitting from the operational and strategic changes that have been made over the past two years.
In addition to the Long Form Results Announcement published on the website of the LuxSE today, Brait’s
FY22 results presentation booklet is available at www.brait.com. This short form announcement is published
under the responsibility of the Board and is a summary of the information in the full announcement available
on the Luxembourg Stock Exchange website and the JSE Stock Exchange News Service at:
https://senspdf.jse.co.za/documents/2022/JSE/ISSE/BAT/BPLCMar22.pdf and on the Company’s website
http://brait.investoreports.com/investor-relations/results-and-reports/
This announcement does not contain full details and should not be used as a basis for any investment decision
in relation to the Company’s shares. The full announcement is available for inspection, at no charge, at the
Company’s registered office (C/o Stonehage Fleming, Suite 420, 4th Floor, Barkly Wharf, Le Caudan
Waterfront, Port Louis, Mauritius) and the office of the sponsor during standard office hours.
Port Louis, Mauritius
21 June 2022
Brait’s Ordinary Shares are primary listed and admitted to trading on the Luxembourg Stock Exchange
(“LuxSE”) and its secondary listing is on the exchange operated by the JSE. Brait’s 2024 Convertible Bonds
due 4 December 2024 are dual listed on the Open Market (“Freiverkehr”) segment of the Frankfurt Stock
Exchange as well as the SEM.
LuxSE Listing Agent:
Harney Westwood & Riegels SARL
JSE Sponsor:
Rand Merchant Bank (A division of FirstRand Bank Limited)
SEM Authorised Representative and Sponsor:
Perigeum Capital Ltd
Date: 21-06-2022 08:45:00
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