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Media release
Sekunjalo Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/006093/06)
Share code: SKJ & ISIN: ZAE000017893
("Sekunjalo" or "the Company" or “the Group”)
SEKUNJALO DELIVERS STRONG PROFITS AND SOLID INVESTMENT VALUE
Highlights
Revenue increased by 25% from R455m to R569m.
Headline earnings increased by 63% from R18m to R30m.
NAV per share increased by 7% from 90.49c to 96.50c.
Cash generation from operations consistent at R56m sustainable
level.
The continued organic growth of underlying assets, substantial
growth in investment performance and new contracts obtained in
operating businesses, resulted in diversified investment group
Sekunjalo Investments Limited (“SIL”), delivering strong
financial results for the financial year ending 31 August 2013.
Sekunjalo today reported that its Net Asset Value, the most
important measure of performance in an investment holding
company, grew to 96.50c per share (previously 90.49c per share).
The Group’s tangible Net Asset Value grew by 7% to 86.26 per
share. The company’s underlying NAV is 154.20c per share at year
end.
Sekunjalo’s underlying operations shows consistent sustainable
earnings with profit before tax at R58m (compared to R48m last
year), thanks to the solid performances from its two main
operating subsidiaries, Sekunjalo Technology Solutions Group and
Premier Fishing.
SIL, as an investment holding company, has set its objective to
increase its net asset value (NAV) by improving operational
performance of its underlying businesses and investments and has
done so successfully for the year under review.
The Executive Chairman of Sekunjalo Investments Limited, Dr
Iqbal Survé said he is delighted by the performance of the
listed Sekunjalo Investment Limited Group. He said that the
strategies implemented by the board are beginning to bear fruit
and the strong growth in earnings and NAV as well as the good
cash flows indicates that the Group is beginning to generate
significant value for its shareholders.
Dr Survé has indicated that he is delighted that the fishing and
technology and communications subsidiaries, as well as the
investments in Pioneer Foods and British Telecom all continue to
perform strongly.
Sekunjalo’s strategy of growing NAV by investing its surplus
capital in its underlying businesses is reaping the benefits of
this approach and the board and the company is looking forward
to a strong performance in the years ahead.
Group revenue has grown by 25% from the prior year due to the
strong operational performance of its underlying businesses.
The Group’s gross profit percentage is in line with expectations
with its technology solutions and fishing operations achieving
efficient performances which are shown in their gross margins
and results.
Profit before taxation for the year has increased significantly
to R58m as compared to the prior period year of R48m, driven
mainly by the subsidiaries organic growth and strategies
implemented over the past few years.
Earnings and headline earnings per share have increased by 66%
and 63% respectively as a result of the operational performance
of the subsidiaries.
The Group’s asset base has increased by R48m to R903m from R855m
as compared to the prior year.
Sekunjalo said that this performance has resulted in sustainable
cash generation from operations which compares well with the
prior year.
Sekunjalo CEO, Khalid Abdulla said that “The R42m generated in
net operational cash flow was consistent, and underpinned the
quality and sustainability of Sekunjalo’s strong earnings flow”.
Abdulla said that due to the re-investment into the organic
growth of the Information Technology Communication Group
(Sekunjalo TSG), the division is performing in line with
expectation with operating profits of R35m for the year. This
was achieved through the implementation and roll out of the long
term contracts secured during the prior financial years.
Sekunjalo TSG’s operations continue to perform well with revenue
from operations increasing by 27% from R192m compared to R152m
during the prior year. The Information Technology Communication
Group also performed above target and generated a positive cash
flow.
Premier Fishing generated an operating profit from operations
for the year under review. Premier Fishing has steadily
maintained its performance with the major contribution coming
from the south coast and west coast rock lobster divisions.
The Group’s non-controlling interests in large multinational
companies, British Telecom Communication Services South Africa
and Pioneer Foods Group have also strengthened the Group’s
financial position.
The ICT and fishing divisions have built a strong platform for
further organic growth and the Group is well positioned to
increase its investments further through acquisition.
Sekunjalo Media owns the rights of and manages the Cape Town
International Jazz Festival. The Cape Town International Jazz
Festival continues to bear fruit and contributes greatly to the
gross domestic product of the Western Cape and national economy
of R475m and R800m respectively.
Looking ahead, Abdulla says, “Sekunjalo is on a firm footing and
moving towards a position where directors can focus their minds
on further expansion, both operationally and through strategic
investments”.
Abdulla says, "Overall, Sekunjalo is in a much stronger
position. Our balance sheet is strong, our cash flow is
improving and prospects for our mainstay businesses are looking
promising. We are also expanding our existing businesses and
looking at new strategic investments."
PERFORMANCE HIGHLIGHTS FOR 2013:
- Net asset value – the most important indicator of
performance in Sekunjalo grew to 96.50c per share from
90.49c per share last year. Sekunjalo’s tangible Net Asset
Value appreciated by 7% to 86.26c per share;
- Sekunjalo’s turnover shifted over to above the R500m mark;
gross trading margins consistent over 30%;
- Continuing operations generated 6.10c per share in headline
earnings; profit before tax increased to R58m compared with
R48m last year;
- The company’s main operating subsidiaries, Sekunjalo
Technology Solutions Group and Premier Fishing,
collectively generated R59 in operating profits;
- The company’s first strategic partnership with a multi-
national, British Telecoms, is delivering consistent
dividends;
- Operational cash flows of R42m;
- Gearing is 10% and finance cost cover shifting up to 3.88
times.
5 November 2013
Sponsor
PSG Capital
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