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Voluntary Quarterly Intrinsic Net Asset Value (“NAV”) disclosure
Brimstone Investment Corporation Limited
(Incorporated in the Republic of South Africa)
Registration number 1995/010442/06
Share Code: BRT ISIN: ZAE000015277
Share Code: BRN ISIN: ZAE000015285
("Brimstone" or the “Company”)
Voluntary Quarterly Intrinsic Net Asset Value (“NAV”) disclosure
A full analysis of the Intrinsic NAV, together with applicable explanations for the quarter ended 30 September 2019 is set out below.
Summary Change 30 September 30 June 31 December 31 December 31 December 31 December
June 2019 to 2019 2019 2018 2017 2016 2015
September 2019
Intrinsic NAV of Brimstone (Rm) (5.7)% 3 495.4 3 705.0 3 899.6 4 317.9 5 133.9 4 229.4
Book NAV (Rm) 1.4% 2 444.0 2 410.9 2 713.4 2 782.0 2 427.1 2 530.3
Intrinsic NAV per share (cents) ¹ (3.4)% 1 481.9 1 534.5 1 615.1 1 800.9 2 139.5 1 741.4
Fully diluted Intrinsic NAV per share (cents) ¹ (3.4)% 1 469.0 1 520.6 1 598.8 1 750.9 2 043.1 1 647.8
Book NAV per share (cents) (3.8)% 1 036.1 998.5 1 123.8 1 160.3 1 011.5 1 044.0
Market price per share (cents)
Ordinary shares 0.0% 850 850 1 050 1 300 1 299 1 350
‘N’ Ordinary shares (18.1)% 750 916 949 1 125 1 200 1 270
Discount to Intrinsic NAV
Ordinary shares 42.6% 44.6% 35.0% 27.8% 39.3% 22.5%
‘N’ Ordinary shares 49.4% 40.3% 41.2% 37.5% 43.9% 27.1%
Intrinsic NAV analysis by asset
An analysis of the Intrinsic NAV of Brimstone as at 30 September 2019 is set out below, including the valuation basis of each asset.
Where applicable, Intrinsic NAV is net of ring-fenced debt and potential CGT relating to that asset.
Asset % held Share Share Valuation basis Gross Debt CGT September September Gross December December Increase /
price at 30 price at 31 value (R'000) (R'000) 2019 2019 portfolio 2018 2018 (Decrease)
September December (R'000) Intrinsic Intrinsic weighting Intrinsic Intrinsic
2019 2018 NAV NAV per NAV NAV per
(R'000) share (R'000) share
(cents) (cents)
Oceana 24.0% 69.44 73.88 Market value per share 2 257 294 (564 490) (175 140) 1 517 664 643.4 29.1% 1 243 065 514.8 25.0%
Sea Harvest ² 54.2% 14.00 13.75 Market value per share 2 232 565 - - 2 323 565 946.5 28.8% 1 898 055 786.1 20.4%
Life Healthcare 6 3.4% 22.68 26.40 Market value per share 1 122 610 (1 226 655) (227 697) (331 741) (140.6) 14.5% 1 037 812 429.8 (132.7)%
Life Healthcare Zero n/a n/a n/a Option valuation 184 138 - (41 247) 142 891 60.6 2.4% - - 0.0%
Cost Collar7
Equites 7.7% 20.50 19.36 Market value per share 715 379 - (50 374) 665 005 281.9 9.2% 233 995 96.5 190.9%
Grindrod Shipping 0.0% 84.00 75.36 Market value per share - - - - - 0.0% 45 262 18.7 (100)%
Phuthuma Nathi 7.0% 113.64 135.36 Market value per share 538 494 65 - 538 559 228.3 6.9% 512 221 212.1 7.6%
Stadio & Milpark 5.3% 2.27 3.49 Market value per share & 139 484 - 11 709 151 192 64.1 1.8% 192 436 79.7 (19.6)%
cost
Investment properties 100.0% Capitalisation rate 206 680 (60 911) (18 625) 127 144 53.9 2.7% 127 013 52.6 2.5%
FPG Property Fund 10.0% Book value 162 575 - (6 666) 155 909 66.1 2.1% 144 689 59.9 10.3%
Lion of Africa 100.0% Book value - - 139 429 139 429 59.1 0.0% 139 429 57.7 2.4%
MTN Zakhele Futhi 5 1.5% Option valuation 35 944 - 5 483 41 427 17.6 0.5% 42 546 17.6 (0.3)%
Aon Re Africa 18.0% PE valuation 72 577 - (14 469) 58 107 24.6 0.9% 64 015 26.5 (7.1)%
House of Monatic 100.0% Adjusted book value 25 542 - - 25 542 10.8 0.3% 27 847 11.5 (6.1)%
Other investments Various Valuation 109 099 - (14 796) 94 303 40.0 1.4% 100 036 41.4 (3.5)%
Cash / (net debt) 100.0% Book value (42 155) (2 020 400) - (2 062 556) (874.4) (0.5)% (1 908 780) (790.6) 10.6%
7 760 226 (3 872 391) (392 393) 3 495 442 1 482 100.0% 3 899 639 1 615.1 (8.2)%
Grindrod – BEE 3 4 6.1% 6.60 13.65 Market value per share 305 684 (936 529) - - -
8 065 910 (4 808 920) (392 393) 3 495 442 1 482
Intrinsic NAV per share (cents) 3 290 (1 642) (166) 1 482
Fully diluted Intrinsic NAV per share (cents) 3 258 (1 625) (165) 1 469
Notes:
1. Based on 241.4 million shares (December 2018: 241.4 million shares) in issue, net of treasury shares as calculated below:
Number of shares in Fully diluted number
issue of shares
Gross number of shares in issue 259 432 321 259 432 321
Treasury shares (fully diluted number is net of notionally realised shares issued to staff and management share trusts and FSPs) (23 554 098) (21 087 726)
235 878 223 238 344 595
Outstanding in the money share options - -
Net shares in issue for INAV purposes 235 878 223 238 344 595
2. No CGT provided on shareholding in Sea Harvest due to potential use of the corporate relief provisions of the Income Tax Act.
3. Due to the limited recourse nature of the Grindrod BEE funding structure, Brimstone's investment is shown at a minimum value of zero.
4. Brimstone now holds a combination of Grindrod Limited and Grindrod Shipping shares. Price shown calculated on a pro forma basis.
5. Valuation of MTN Zakhele Futhi investment treated as an option and was updated by an independent expert as at 30 September 2019.
6. Brimstone has entered into a securities lending arrangement with Nedgroup Securities. At the end of the lending arrangement, Nedgroup Securities will be obligated to return the stock to
Brimstone.
7. The Zero Cost Collar derivative over Life Healthcare investment was valued as at 30 September 2019.
The INAV information presented has been prepared on a basis consistent with that used in the integrated report for the year ended 31 December 2018, which is available on the Company’s website at
www.brimstone.co.za.
The above information is the responsibility of the directors and has not been reviewed or reported on by the Company’s auditors.
06 December 2019
Sponsor
Nedbank Corporate and Investment Banking
Date: 06-12-2019 10:00:00
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