Wrap Text
Audited results for the year ended 31 March 2014 and declaration of bonus share issue (cash dividend alternative)
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" or "Group")
Summary Audited Results For The Year Ended 31 March 2014 and Declaration of a Bonus Share Issue (with Cash Dividend Alternative)
Key Highlights
NAV per share:
– 19.9% increase for FY2014 to R31.95
– 24.6% CAGR for three years to 31 March 2014 on reported NAV per share
– Uplift attributable to operational performance of investments – solid profit growth and cash flow generation
Dividends:
– Proposed ordinary share bonus issue (with cash dividend alternative) of 31.95 cents per share
– Preference share dividend of R89.9 million (449.34 cents per share) for the six months ended 31 March 2014 declared on 27 May 2014
R1.8 billion invested primarily into:
– Funding of Premier Group's investments in Lil-lets and Star Bakeries
– Acquisition of 37% of Southern View Finance, an international financial services business
R354 million cash inflows from investment portfolio
Treasury management:
– R500 million perpetual preference share tap issue in June 2013
– R1 billion received in March 2014 from the refinance of loan receivable
– R2.7 billion available cash and facilities for new investments
Salient features for the year ended 31 March
Audited Audited Audited Audited
31 March 31 March 31 March 31 March
2013 2014 2014 2013
R'm R'm Note EUR'm EUR'm
2 664 3 195 Net asset value (NAV) per share (cents) 220 225
27% 25% NAV CAGR # N/A N/A
0.68% 0.66% Operating cost: Assets Under Management (AUM)* 0.66% 0.68%
0.34% 0.33% Operating cost after fee income: AUM* 0.33% 0.34%
274 354 Cash inflow from investment portfolio 24 23
26.64 31.95 Proposed/Paid ordinary dividends per share (cents) 2.24 2.12
135.63 443.21 Interim preference dividend per share paid (cents) 32.8723 11.9903
440.79 449.34 Final preference dividend per share declared/paid (cents) 31.5439 35.0883
17 752 27 330 Market capitalisation 1 835 1 500
510 514 Ordinary shares in issue (m) 514 510
(5) (5) Treasury shares (m) (5) (5)
505 509 Ordinary shares outstanding (m) 509 505
504 507 Weighted average ordinary shares in issue (m) – basic and diluted 507 504
3 480 5 321 Closing ordinary share price (cents) 357 294
# Compound Annual Growth Rate "CAGR" is calculated over any three-year period commencing on 1 April 2011 and assuming an opening NAV of R16.50
* Assets under management represent the aggregate of the Group's total assets and Brait IV invested capital under management
Summary group statement of comprehensive income for the year ended 31 March
2 713 2 348 Investment gains 173 246
488 452 Other investment income 34 46
(124) (144) Operating expenses (11) (11)
(59) (57) Finance costs (5) (6)
(5) (1) Indirect taxation – –
(1) 14 Direct taxation 1 –
3 012 2 612 Profit for the year 192 275
163 349 Translation adjustment (197) (143)
3 175 2 961 Comprehensive income for the year (5) 132
581 480 Earnings/Headline earnings per share (cents) – Basic and Diluted 9 35 53
Summary group statement of financial position as at 31 March
Audited Audited Audited Audited
31 March 31 March 31 March 31 March
2013 2014 2014 2013
R'm R'm Notes EUR'm EUR'm
ASSETS
14 523 17 742 Non-current assets 1 224 1 226
13 114 17 211 Investments 3 1 187 1 108
1 399 523 Loan receivable 4 36 117
10 8 Property and equipment 1 1
618 681 Current assets 46 53
115 342 Accounts receivable 23 10
503 339 Cash and cash equivalents 5 23 43
15 141 18 423 Total assets 1 270 1 279
EQUITY AND LIABILITIES
14 927 18 211 Equity and reserves 1 255 1 261
13 458 16 247 Ordinary shareholders' equity and reserves 6 1 120 1 137
1 469 1 964 Preference shareholders' equity 7 135 124
163 165 Non-current liabilities 11 14
141 164 Borrowings 8 11 12
22 1 Deferred tax liability – 2
51 47 Current liabilities 4 4
15 141 18 423 Total equity and liabilities 1 270 1 279
510 514 Ordinary shares in issue (m) 514 510
(5) (5) Treasury shares (m) (5) (5)
505 509 Outstanding shares for NAV calculation (m) 509 505
2 664 3 195 Net asset value per share (cents) 220 225
Summary group statement of changes in equity as at 31 March
Audited Audited Audited Audited
31 March 31 March 31 March 31 March
2013 2014 2014 2013
R'm R'm Note EUR'm EUR'm
Attributable to ordinary shareholders
10 321 13 458 Ordinary shareholders' balance at beginning of the year 1 137 1 008
3 012 2 612 Profit for the year 192 275
163 349 Translation adjustments (197) (143)
(2) (5) Net purchase of treasury shares – –
(16) (12) Ordinary dividends paid (cash election) (1) (1)
(20) (155) Earnings attributed to preference shares (11) (2)
13 458 16 247 Ordinary shareholders' balance at end of the year 1 120 1 137
Attributable to preference shareholders
– 1 469 Preference shareholders' balance at beginning of the year 124 –
1 469 495 Preference share issue net of cost 7 36 134
– – Translation adjustments (25) (10)
20 155 Earnings attributed to preference shares 11 2
(20) (155) Preference dividend paid (11) (2)
1 469 1 964 Preference shareholders' balance at end of the year 135 124
Group statement of cash flows as at 31 March
Audited Audited Audited Audited
31 March 31 March 31 March 31 March
2013 2014 2014 2013
R'm R'm Note EUR'm EUR'm
126 219 Investment proceeds 15 11
61 99 Fees received 7 5
24 57 Interest received 4 2
111 83 Dividends received 6 9
(135) (152) Operating expenses paid (10) (10)
(24) (11) Taxation paid (1) (2)
(59) (19) Interest paid (1) (5)
104 276 Operating cash flow excluding purchase of investments 20 10
(386) (1 805) Purchase of investments (124) (33)
(282) (1 529) Net cash used in operating activities (104) (23)
(8) (2) Acquisition of property and equipment – (1)
(8) (2) Net cash used in investing activities – (1)
1 500 500 Proceeds from issue of preference shares 34 127
(31) (5) Preference share transaction cost – (3)
– 1 000 Loan received from Fleet 4 69 –
(1 231) (4) Net repayment of long-term borrowings – (104)
(2) (5) Net purchase of treasury shares – –
(16) (12) Ordinary dividend paid (cash election) (1) (1)
(20) (155) Preference dividend paid (11) (2)
200 1 319 Net cash from financing activities 91 17
(90) (212) Net decrease in cash and cash equivalents (13) (7)
70 48 Effects of exchange rate changes on cash and cash equivalents (7) (1)
523 503 Cash and cash equivalents at beginning of year 43 51
503 339 Cash and cash equivalents at end of year 23 43
Notes to the summary financial statements for the year ended 31 March
1. BASIS FOR PREPARATION
The financial statements of the Group are prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union, on the going concern principle, using the historical
cost basis, except where otherwise indicated. The summary financial statements are prepared in accordance
with IAS 34 (Interim Financial Reporting). The accounting policies and methods of computation are consistent
with those applied in the annual financial statements for the year ended 31 March 2013.
The Group's financial statements are prepared using both the Euro (€/EUR) and SA Rand (R/ZAR) as its
presentation currencies. The Group has three functional currencies: USD (US$), GBP (£/GBP) and SA Rand
for the respective jurisdictions in which it operates. The financial statements have been prepared using the
following spot exchange rates:
2014 2013
Closing Average Closing Average
USD/ZAR 10.5325 10.1178 9.2358 8.5067
GBP/ZAR 17.5500 16.1108 14.0359 13.4380
EUR/ZAR 14.5028 13.5779 11.8391 10.9589
USD/EUR 0.7262 0.7451 0.7802 0.7770
GBP/EUR 1.2101 1.1866 1.1858 1.2279
Audited Audited Audited Audited
31 March 31 March 31 March 31 March
2013 2014 2014 2013
R'm R'm EUR'm EUR'm
2. RELATED PARTIES
Trading period
During the period, Group companies entered into the following transactions
with related parties who are not members of the Group:
Related party balances and transactions
Statement of financial position balances
1 399 523 – Loan receivable 36 117
Profit from operations include:
(7) (8) – Non-executive directors' fees (1) (1)
119 124 – Interest income on loan receivable 9 11
Statement of changes in equity (amount charged directly to equity)
(3) – Transaction cost (amount charged directly to equity) – M Partners S.à r.l. – –
3. INVESTMENTS
Given the nature of the Group's operations, investments in which the Group has significant influence, but not
control are accounted for at fair value through profit and loss (scoped out of IAS 28 and into IAS 39). Changes
in fair value are recognised in profit or loss in the period of change. The Group applies a number of methodologies
to determine and assess the reasonableness of the fair value, which may include the following:
- Earnings multiple
- Recent transaction prices
- Net asset value
- Price to book multiple
Listed investments are held at recent quoted transaction prices. Where the listed investment is either thinly
traded and/or the market is inactive, the valuation applied to determine carrying value is based on the applicable
unlisted investment valuation methodology set out below. The primary valuation model utilised for valuing unlisted
investee companies is the maintainable earnings multiple model: Maintainable earnings are derived with reference
to the mix of prior year audited and latest available current year forecast EBITDA per the portfolio company,
adjusted for any non-recurring income/expenditure. As the year progresses, so the weighting is increased towards
the portfolio company's forecast. The directors decide on an appropriate group of comparable quoted companies from
which to base the EV/EBITDA multiple. The average multiple of the comparable quoted companies, derived as at the
date of valuation, is adjusted for points of difference to the portfolio company being valued. The equity valuation
takes consideration of the portfolio company's net debt/cash on hand as per its latest available financial results.
Further valuation information can be obtained from the 31 March 2014 investor presentation on the Group's website,
www.brait.com.
Audited Audited Audited Audited
31 March 2013 31 March 2014 31 March 2014 31 March 2013
R'm R'm EUR'm EUR'm
9 278 11 145 Pepkor 768 784
1 463 3 053 Premier Group 211 124
1 449 1 513 Iceland Foods 104 122
924 1 500 Other Investments 104 78
13 114 17 211 Total investments 1 187 1 108
13 114 17 211 1 187 1 108
12 297 15 566 Investment in equity securities 1 074 1 040
817 1 645 Investment in loans 113 68
Fair Value Hierarchy
IFRS 13 provides a hierarchy that classifies inputs used to determine fair value. Investments measured and reported
at fair value are classified and disclosed in one of the following categories:
Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as quoted prices) or
indirectly (i.e. derived from quoted prices).
Level 3 Inputs for the assets or liability that are not based on observable market data
There are no financial assets that are categorised as Level 2 and no transfers between levels in the current or prior year.
Investment in Investment in Investment in Investment in
Securities Securities Securities Securities
Level 1 Level 3 Total Level 1 Level 3 Total
R'm R'm R'm 31 March 2014 EUR'm EUR'm EUR'm
– 11 145 11 145 Pepkor – 768 768
– 1 719 1 719 Premier Group – 119 119
– 1 493 1 493 Iceland Foods – 103 103
22 1 187 1 209 Other Investments 2 82 84
22 15 544 15 566 Total investment in securities 2 1 072 1 074
Audited Audited Audited Audited
31 March 31 March 31 March 31 March
2013 2014 2014 2013
R'm R'm EUR'm EUR'm
4. LOAN RECEIVABLE
1 399 1 523 Loan to Fleet Holding Ltd ("Fleet" – represents the Investment Team's SPV) 104 117
– (1 000) Loan from Fleet (68) –
1 399 523 Net loan to Fleet 36 117
In the current year Fleet refinanced the loan from the Group with The Standard
Bank of South Africa Limited and First Rand Bank Limited (trading through its
Rand Merchant Bank division) ("The Lenders"). The proceeds from the refinance
were advanced back to the Group as a new separate loan. This new loan has
been pledged by Fleet to the Lenders.
In the event that the Group applies a legal set-off of the loans due to and from
Fleet, this will negatively impact the pledge to the Lenders. In this scenario, the
Group has made a capital undertaking to the Lenders for the amount set-off. This
mechanism effectively results in a re-draw of the first loan to Fleet as provided for
in the 2011 loan agreement.
Both loans bear interest at the three month Johannesburg Inter Bank Acceptance
Rate ("JIBAR") plus 3.45%, with the right to roll up interest. The loans are
repayable at the end of their term with an option to extend for a further five years.
As a result of the refinance, shares pledged by Fleet are now subject to a joint and
several pledge to both the Group and the Lenders. The pledged shares as at
31 March 2014 were 92.3 million (2013: 91.6 million); such shares having
no vesting or restrictive conditions. Any bonus shares issued on this pool of
shares are also pledged as security. The closing Brait share price of R53.21 on
31 March 2014 increases the cover ratio to 300% (2013: 228%).
Audited Audited Audited Audited
31 March 31 March 31 March 31 March
2013 2014 2014 2013
R'm R'm EUR'm EUR'm
5. CASH AND CASH EQUIVALENTS
325 339 Balances with banks 23 28
178 – Short-term treasury investments – 15
503 339 Total cash and cash equivalents 23 43
503 339 23 43
101 168 – ZAR cash 11 9
394 160 – USD cash 11 33
8 11 – GBP cash 1 1
6. ORDINARY SHARE CAPITAL AND PREMIUM
Authorised share capital
1 500 000 000 at par value of EUR0.22 per share
Issued share capital
31 March 2013 510 122 347
Bonus share issue 3 510 329*
31 March 2014 513 632 676
* The EUR1 million (R10 million) par value of the bonus shares issued in August 2013
are accounted for in Ordinary Share Premium with no adjustment to any other
reserves in Equity. The bonus share issue option was converted at a 60-day
Volume Weighted Average Price (VWAP) ended 31 May 2013 of R35.29 per share
to result in the R0.2664 per share distribution translating into 0.75489 shares for
every 100 shares held.
Audited Audited Audited Audited
31 March 31 March 31 March 31 March
2013 2014 2014 2013
R'm R'm EUR'm EUR'm
7. PREFERENCE SHARES
1 469 1 964 Authorised 135 124
20 000 000 cumulative, non-participating perpetual preference shares with a
nominal value of EUR0.01 each.
Issued
20 000 000 cumulative, non-participating perpetual preference shares issued at
EUR9.50/R100.00 per share with a nominal value of EUR0.01 each with a primary listing
on the LuxSE and secondary listing on JSE. 15 000 000 preference shares were
issued on 6 August 2012 and 5 000 000 preference shares were issued on
25 June 2013.
The discretionary preference dividend is calculated on a daily basis at 104% of the
SA Prime interest rate and is payable after each reporting date. Arrear preference
dividends shall accrue interest at 144% of the SA Prime interest rate.
Audited Audited Audited Audited
31 March 31 March 31 March 31 March
2013 2014 2014 2013
R'm R'm EUR'm EUR'm
8. BORROWINGS
Loan from FirstRand Bank Limited (trading through its Rand Merchant Bank division)
and The Standard Bank of South Africa Limited is Rand denominated, bears interest
at three month Johannesburg Inter Bank Acceptance Rate (JIBAR) plus 2.7% and
interest is repayable semi-annually, with a right to roll-up. The principal amount
borrowed is repayable on maturity of the facility on 4 July 2016, with an option to
141 164 extend for a further five years: This facility is secured by Group assets. 11 12
9. EARNINGS / HEADLINE EARNINGS PER SHARE
The calculation of the basic and diluted earnings/headline earnings per share is
based on the following data:
3 012 2 612 Profit for the year 192 275
(20) (89) Interim Preference dividend paid (7) (2)
(66) (90) Final Preference dividend declared/paid (7) (6)
2 926 2 433 Earnings/Headline Earnings 178 267
Audited Audited Audited Audited
31 March 31 March 31 March 31 March
2013 2014 2014 2013
R'm R'm EUR'm EUR'm
10 CONTINGENT LIABILITIES AND COMMITMENTS
10.1 Contingencies
38 33 Sureties 3 3
850 1 024 Guarantees(1) 71 72
(1)R472 million/EUR33 million (2013: R479 million/EUR41 million) of the guarantees total is provided
to the lenders to the Pepkor SPV. The remaining R552 million/EUR38 million relates to the
guarantee provided to the lenders to Southern View Finance Ltd in the current year. The
previous year's guarantee of R371 million/ EUR31 million in respect of BVI 1499 was released
in the current year.
888 1 057 Total contingencies 74 75
10.2 Commitments
161 111 Private equity funding commitments 8 14
Rental commitments (Malta and Mauritius)
4 2 – Within one year – –
11 3 – Between one and five years – 1
176 116 Total commitments 8 15
10.3 Other
The Group has rights and obligations in terms of shareholder or purchase and
sale agreements relating to its present or former investments.
11. NON ADJUSTING POST BALANCE SHEET EVENT
Per the Circular to shareholders in April 2011, Brait South Africa Proprietary Limited (BSAL) is the Group's contracted sub-advisor. With effect from
1 April 2014, BSAL is no longer a wholly owned subsidiary of the Group in line with its function as an independent service provider to the Group.
All of BSAL's assets and liabilities were transferred to the Group prior to the change in its shareholding, with no significant impact to the Group's net
asset value or Group earnings for the reported period.
AUDITOR'S OPINION
These summary consolidated financial statements for the year ended 31 March 2014 have been audited by Deloitte Audit Limited who expressed an
unmodified opinion thereon. The auditor also expressed an unmodified opinion on the annual consolidated financial statements from which these summary
consolidated financial statements were derived.
A copy of the auditor's report on the summary consolidated financial statements and of the auditor's report on the annual consolidated financial statements
are available for inspection at the Company's registered office, together with the financial statements identified in the respective auditor's reports.
Review of operations
The Directors are pleased to report the Group results for the financial year ended 31 March 2014 to shareholders.
VALUE DRIVERS
Growth in NAV is the Company's key performance measure and the following additional factors are the other core value drivers of the business:
- Low cost to AUM ratio;
- Minimal balance sheet cash drag;
- Significant cash flow within the investment portfolio; and
- Predictable and consistent ordinary dividend to closing NAV yield.
Growth in NAV
Brait targets growth in its NAV per share at a compound rate of at least 15% per annum (CAGR) over any three-year period commencing 1 April 2011
and assuming an opening NAV of ZAR16.50. The CAGR achieved of 24.6% over the three years ended 31 March 2014 compares favourably to this
15% benchmark performance measure. The Group's NAV per share of ZAR31.95 at 31 March 2014 represents a 19.9% increase on the ZAR26.64 NAV
reported at 31 March 2013.
Growth in EBITDA and cash flow generation of investee companies continue to be the drivers of the Group NAV, with the EV/EBITDA valuation multiples
applied remaining unchanged, and at a significant discount to their listed peer groups.
At reporting date, the EV/EBITDA valuation multiples for the significant portfolio investments are Pepkor at 8x; Premier Group at 6.5x; Iceland Foods at 6.5x.
The current NAV break-down is as follows:
Audited Audited Audited Audited
31 March 31 March 31 March 31 March
2013 2014 2014 2013
R'm R'm % EUR'm EUR'm
13 114 17 211 Investments 1 187 1 108
9 278 11 145 Pepkor 60% 768 784
1 463 3 053 Premier Group 17% 211 124
1 449 1 513 Iceland Foods 8% 104 122
924 1 500 Other investments 8% 104 78
1 399 523 Loan receivable 3% 36 117
503 339 Cash and cash equivalents 2% 23 43
10 8 Property and equipment – 1 1
115 342 Accounts receivable 2% 23 10
15 141 18 423 Total assets 100% 1 270 1 279
214 212 Total liabilities 15 18
141 164 Borrowings 11 12
73 48 Accounts payable and provisions 4 6
1 469 1 964 Preference share equity 135 124
13 458 16 247 Net asset value 1 120 1 137
505.2 508.5 Number of issued shares (million‚ excluding treasury shares) 508.5 505.2
2 664 3 195 Net asset value per share (cents) 220 225
Key highlights of the Group's investment portfolio are:
- Pepkor's sales for the first six months of its FY2014 are 21% up on the comparative period. EBITDA margin was maintained at 12.1%, translating into a
21% and 25% increase in EBITDA and profit after tax, respectively, for the period. The Group added a net 262 retail outlets during the 12 month period
to 31 December 2013 (8% growth), closing with 3 573 stores in operation. Free cash flow generation remains strong facilitating Pepkor paying a dividend
at the end of January 2014 of R346 million (Brait received R128 million).
- Premier Group's sales for the first six months of its FY2014 increased 9% on the comparative period. Continued focus on operational efficiencies and
costs resulted in EBITDA margins expanding to 7.5% (HY2013: 6.7%) and EBITDA increasing by 22% for the period. The acquisitions announced in
Brait's interim results presentation (Star Bakeries and Lil-lets Group) were completed during November 2013 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 shareholder 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
continues to exercise existing put and call option agreements with former shareholders. Brait now holds 84.6% of the Premier Group (March 2013: 79.9%).
- Iceland Foods' sales for its FY2014 increased by 3% and cash generation remains on plan. The challenging market conditions in the UK market led
to pressure on margins, resulting in EBITDA decreasing by 11% which has negatively impacted the valuation of Iceland Foods in the third and fourth
quarters of FY2014. The weakening of the Rand/GBP exchange rate has mitigated this.
Low cost to AUM ratio
Operating expenditure for the year of ZAR144 million (FY2013: ZAR124 million) represents a favourable ratio of 0.66% (FY2013: 0.68%) to Assets Under
Management (AUM) compared to the target of 0.85% or less. Net operating expenditure after fee income results in a ratio of 0.33% (FY2013: 0.34%) to AUM.
Minimal balance sheet cash drag
The Group maintains minimal cash holdings on balance sheet to avoid diluting overall target returns. Cash and cash equivalents at 2.1% of NAV (FY2013:
3.7%) are well within the Group's benchmark maximum of 25% of NAV.
Significant cash flow within the investment portfolio
Brait received investment cash inflows of ZAR354 million during the year comprising: ZAR128 million dividend income from Pepkor (Pepkor paid a total
dividend of ZAR346 million during January 2014); ZAR52 million from the servicing of interest by the Premier Group and ZAR174 million from realisations
within the Other Investments portfolio.
Predictable and consistent bonus share issue or ordinary dividend to closing NAV yield
The Group's policy is an ordinary bonus share issue or dividend of 1% to 2.5% of closing NAV. Bonus shares and dividends are considered annually when
the results for each year are published. The extent of any bonus shares and dividends are determined relative to net operating cash flows which include
proceeds received on the realisation of loans and investments from time to time and which are not earmarked for new projects or required for liquidity.
The Board has proposed a bonus share issue (with a cash dividend alternative) of 1% of NAV equal to 31.95 ZAR cents/2.24 EUR cents (FY2013 26.64
ZAR cents/2.12 EUR cents). Further details regarding the bonus share issue with cash dividend alternative can be found below. In August 2013, 91% of
shareholders elected to receive bonus shares, resulting in issued share capital (net of treasury shares) increasing to 508.5 million shares at year-end.
GROUP FUNDING POSITION
Brait placed the remainder of its ZAR2 billion perpetual preference share programme raising R500 million by way of private placement of 5 million shares to
select investors on 25 June 2013. The proceeds were applied to settle the Group's drawn borrowings at the time, with the remaining balance advanced as a
shareholder loan to Premier Group for acquisition funding.
On 31 March 2014, Fleet Holdings Ltd (the Investment Team's SPV) successfully refinanced ZAR1 billion of the loan owing to Brait resulting in the balance
outstanding at year-end reducing to R523 million. The Group applied the proceeds received to pay down borrowings, which arose during the third quarter of
FY14 as a result of increased investment to fund (i) Premier Group's acquisitions (Star Bakeries and Lil-lets) and (ii) the investment in SVF.
The Group remains adequately capitalised with sufficient cash and low cost facilities available for potential new investments. The Group continues to explore
new sources of funding through raising cheaper and more permanent forms of capital to achieve a more efficient capital structure.
PREFERENCE DIVIDEND DECLARED
The Board declared, on 27 May 2014, a preference dividend of ZAR4.4934/EUR0.315439 per share for the six months ended 31 March 2014. The issued
cumulative, non-participating perpetual preference share capital at the date of this declaration is 20 000 000 preference shares of ZAR100 each. A separate
announcement setting out the salient dates was released to the market on Thursday, 29 May 2014.
PROPOSED BONUS SHARE ISSUE OR, ALTERNATIVELY, CASH DIVIDEND
The Board has proposed a bonus share issue of new, fully paid, ordinary Brait Shares with a par value of EUR0.22 each ("New Shares") in proportion to a
shareholders' shareholding in Brait, payable to shareholders recorded in the register on the Friday, 1 August 2014 (the "Bonus Share Issue"). Shareholders
will be entitled, in respect of all or part of their shareholding as of the record date (Friday, 1 August 2014), to elect to receive a cash dividend of 31.95
ZAR cents/2.24 EUR cents per ordinary share (the "Cash Dividend Alternative") held in lieu of all or part of the New Shares to which they would have
been entitled, which will be paid only to those shareholders whose election forms to receive the Cash Dividend Alternative, in respect of all or part of their
shareholding are received by the transfer secretaries on or before 12:00 on Friday, 1 August 2014 (Record date). The Bonus Share Issue and Cash Dividend
Alternative are, however, subject to shareholder approval at the Company's AGM on 16 July 2014. If all shareholders receive New Shares, an approximate
aggregate number of 3 118 675 New Shares, are expected to be issued. If all shareholders elect to receive the Cash Dividend Alternative, this would amount
to an aggregate of ZAR 164 105 640 /EUR 11 520 308, for the financial year ending 31 March 2014.
Shareholders not electing to receive the Cash Dividend Alternative in respect of all or part of their shareholding will, without any action on their part, be issued
with New Shares in accordance with their shareholding pursuant to the Bonus Share Issue.
The number of New Shares to which shareholders will be entitled pursuant to the Bonus Share Issue will be determined by such shareholder's shareholding
in Brait as of the 1 August 2014 in relation to the ratio that 31.95 ZAR cents (2.24 EUR cents) bears to R52.62, being the 60-day volume weighted average
price ("VWAP") of ordinary Brait shares on the Luxembourg Stock Exchange ("LuxSE") and the Johannesburg Securities Exchange ("JSE") during the
trading period ending on Friday, 30 May 2014. This conversion ratio amounts to 0.60718 New Shares per 100 Brait shares held by the shareholder at the
Record date. Fractions and fractional entitlements are not possible due to various corporate law and listing requirements. Accordingly, where a shareholder's
entitlement to New Shares calculated in accordance with the above formula gives rise to a fraction of an ordinary share, such fraction of an ordinary share
will be rounded up to the nearest whole number where the fraction is greater than or equal to 0.5 and rounded down to the nearest whole number where the
fraction is less than 0.5.
A circular and an election form will be sent to all shareholders on Monday, 23 June 2014 containing full details of the Bonus Share Issue and Cash Dividend
Alternative.
The rationale for the Bonus Share Issue is to afford shareholders the opportunity to increase their shareholding in Brait and retain the Company's flexibility on
cash holdings.
The Bonus Share Issue and the Cash Dividend Alternative may have tax implications for shareholders.
The receipt of New Shares by South African resident shareholders should not be classified as a dividend or a foreign dividend for South African tax purposes
and hence dividends tax should not be levied on the New Shares. For those South African resident shareholders electing the Cash Dividend Alternative in
lieu of the New Shares, such amount will be regarded as a foreign dividend, but may be subject to South African dividends tax at the rate of 15%, unless an
exemption as set out in the South African income tax legislation applies.
If dividends tax does apply, the net dividend will be 27.1575 ZAR cents per share.
Shareholders are therefore encouraged to consult with their professional advisors should they be in any doubt as to the appropriate action to take.
The issued ordinary share capital at the date of this announcement is 513 632 676 ordinary shares of EUR0.22 each.
The salient dates are as follows:
EVENT 2014
Announcement of the applicable ratio, based on the 60-day volume weighted average price ending on Friday 30 May 2014, released
on the LuxSE and JSE, Wednesday, 4 June
Bonus share circular and form of election posted to shareholders on: Monday, 23 June
AGM approving the Bonus Share Issue/Cash Dividend Alternative on: Wednesday, 16 July
Last day to trade in order to be eligible for the Bonus Share Issue or, alternatively, the Cash Dividend Alternative on: Friday, 25 July
Ordinary shares trade "ex" the Bonus Share Issue/Cash Dividend Alternative on: Monday, 28 July
Last day for election forms to receive the Cash Dividend Alternative instead of the Bonus Share Issue to reach the Transfer
Secretaries by 12:00 on: Friday, 1 August
Record date in respect of the Bonus Share Issue/Cash Dividend Alternative on: Friday, 1 August
Share certificates and dividend cheques posted, CSDP/participant/broker accounts credited/updated and New Shares listed on the
LuxSE and JSE on: Monday, 4 August
Share certificates may not be dematerialised or rematerialised, nor may transfers between the Luxembourg and South African registers take place between
close of business Friday, 25 July 2014 and Friday, 1 August 2014, both days inclusive.
Please note that the New Shares to be issued in terms of the Bonus Share Issue may not be traded until Monday, 4 August 2014.
GROUP OUTLOOK
- Pepkor continues to perform well across its geographies: South Africa is the strong underpin with its significant footprint and product offering aimed at
lower LSM's; Eastern Europe has demonstrated superior growth aggressively rolling out stores in Poland and neighbouring countries; Africa represents an
exciting opportunity given the Pep format, logistical expertise and product offering; Australia is a challenging environment but making good progress on
the three-year plan;
- Premier Group is delivering on its strategy of operational efficiencies and consistent quality, enhancing margins on its core staples business. The year
ahead will see the integration of its recent acquisitions, which will enhance profit growth;
- Iceland Foods continues to generate strong cash flows and management is alert to and proactive in dealing with the challenging UK environment.
The defensive nature of the portfolio continues to be borne out and enhanced through the generation of strong cash flow and growing geographic spread.
Brait's ungeared balance sheet with cash and facilities available for investment of R2.7 billion sees it well placed to be cautiously opportunistic on deal flow
that "moves the dial".
For and on behalf of the Board
PJ Moleketi
Non-Executive Chairman
4 June 2014
Directors (all non-executive)
PJ Moleketi (Chairman)*, CD Keogh##, RJ Koch##, Dr LL Porter##, CS Seabrooke*, HRW Troskie**, Dr CH Wiese*
*South African ##British ** Dutch
The Company is primarily listed on the Euro MTF market of the LuxSE and secondarily listed on the JSE.
Brait SE
Registration No: SE1
SPONSOR
Rand Merchant Bank (a division of FirstRand Bank Limited)
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