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BRAIT SE - Net asset value (NAV) update for the third quarter ended 31 December 2013 (Q3 FY2014)

Release Date: 22/01/2014 07:05
Code(s): BAT BATP     PDF:  
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Net asset value (“NAV”) update for the third quarter ended 31 December 2013 (Q3 FY2014)

Brait SE
(Registered in Malta as a European Company)
(Registration No.SE1)
Share code: BAT ISIN: LU0011857645
Share Code: BATP ISIN: MT0000680208
(“Brait”, “the Company”)

NET ASSET VALUE (“NAV”) UPDATE FOR THE THIRD QUARTER ENDED 31
DECEMBER 2013 (Q3 FY2014)

Shareholders of the Company are advised that:

  - NAV per share increased by 4.3% to R30.41 for the quarter
    ended 31 December 2013 (30 September 2013: R29.17 per share).
  - NAV per share of R30.41 reflects an increase of 23.1% for the
    twelve months ended 31 December 2013 (31 December 2012:
    R24.70 per share), which translates into a 24.9% CAGR since 1
    April’s R16.50 Rights Offer Price.
  - Valuation multiples for Brait’s investments remain unchanged.
  - Pepkor’s carrying value grew by 6.5% for the quarter,
    attributable to continued strong trading and resulting growth
    in EBITDA and cash flow generation.
  - Premier Group’s core business traded well during the quarter,
    generating solid growth in EBITDA and cash flow. The
    acquisitions announced in Brait’s interim results
    presentation (Star Bakeries and Lil-lets Group) were
    completed during November and funded by Brait. They have been
    recognised in the Premier Group valuation at their combined
    cost of R1.3 billion. R330 million of this funding is a
    scheduled loan repayment to be received by Brait in the next
    quarter and accordingly is shown in accounts receivable as
    opposed to the carrying value for Premier Group. Brait
    increased its shareholding in Premier Group from 80.0% to
    84.6% through the exercise of existing put and call option
    agreements with former Premier Group shareholders. The
    combined effect of these items resulted in the carrying value
    for Premier Group increasing by 54.4% for the quarter.
  - Iceland Foods’ cash generation remains on plan. However, the
    difficult trading conditions in the UK market have led to a
    downward revision of the forecast FY2014 EBITDA which has
    negatively impacted the valuation of Iceland Foods in GBP
    terms. The weakening of the Rand/GBP exchange rate has
    largely mitigated this, resulting in the carrying value in
    Rand terms declining by 2.4% for the quarter.
  - Further to the announcement in its FY2014 interim results
    presentation, Brait has acquired 37% of Southern View Finance
    (“SVF”). SVF is an international financial services business
    which specializes in the provision of unsecured loans. SVF
    has acquired the right to use the Pepkor footprint to
    originate unsecured loans for its own account. The SVF
    carrying value shown represents the cost of Brait’s
    investment to date. Further information on this investment
    will be reported in Brait’s March 2014 results.
  - The 6.2% reduction in Other investments is attributable to
    proceeds received from realisations.
  - The increase in Brait’s borrowings during the quarter is due
    to having funded the acquisitions made by Premier Group and
    the investment in SVF. The Company remains adequately
    capitalised with sufficient available cash and facilities for
    potential new investments. Alternative sources of funding to
    enhance flexibility and efficiency continue to be explored.
  - Operating costs for the Company remain in line with
    previously communicated performance targets.

NAV Detailed Analysis:
                                 31-Dec-13   30-Sept-13   31-Dec-12
                                       R'm          R'm         R’m
Investments                         16,639       14,806      12,204
Pepkor                              10,816       10,154       8,471
Premier Group                        2,910        1,885       1,313
Iceland Foods                        1,764        1,808       1,380
Southern View Finance                  249            -           -
Other investments                      900          959       1,040

Loan receivable                      1,492        1,460       1,370
Cash and cash equivalents              424          583         512
Property and equipment                   9            9          10
Accounts receivable                    338          106          10

Total Assets                        18,902       16,964      14,106

Borrowings                         (1,369)         (83)        (59)
Deferred tax liability                (25)         (25)        (34)
Accounts payable                      (78)         (54)        (63)

Total liabilities                  (1,472)        (162)       (156)

Preference share equity            (1,964)      (1,964)     (1,470)

Net Asset Value                     15,466       14,838      12,480

Number of issued shares ('mil)
excluding treasury shares            508.5        508.6       505.2

Net asset value per share
(ZAR)                                30.41        29.17       24.70

The financial information on which this announcement is based
has not been reviewed and reported on by the Company`s external
auditors.
For and on behalf of the Company’s Board of Directors

Phillip Jabulani Moleketi
Non-Executive Chairman
22 January 2014


The Company is primarily listed on the Euro MTF market of the
Luxembourg Stock Exchange and secondarily listed on the
Johannesburg Stock Exchange.

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

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