Wrap Text
Net asset value (“NAV”) update as at 31 December 2014 (Q3 FY2015)
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 AS AT 31 DECEMBER 2014 (Q3 FY2015)
Shareholders of the Company are advised that:
- Pro-forma NAV per share of R61.96 reflects an increase of
103.7% for the twelve months ended 31 December 2014 (31
December 2013: R30.41 NAV per share), which translates into a
47.8% CAGR since 31 December 2011’s reported NAV per share of
R19.21.
- Brait shareholder approval (passed by a 99.8% majority of
shareholders voting in person or by proxy) was obtained at
the Extraordinary General Meeting held on 27 January 2015 for
the proposed acquisition by Steinhoff International Holdings
Limited (“Steinhoff”) of Brait’s effective 37.06% interest in
Pepkor Holdings Proprietary Limited (“Pepkor”). The
transaction remains subject to the fulfilment or waiver of
the Conditions Precedent as set out in the Circular to Brait
Shareholders released on 12 December 2014 (“Brait’s
Circular”). In the interests of fair presentation and to
afford comparability with the pro-forma September 2014 NAV of
R61.35 disclosed in Brait’s Circular, the reported NAV for
the quarter ended 31 December 2014 is presented on a pro-
forma basis, with Pepkor valued in accordance with the
Steinhoff offer price. The increase in the Pepkor carrying
value for the quarter is attributable to the Steinhoff
closing share price as at 31 December 2014 of R59.40 (Pro-
forma 30 September 2014 NAV used the R57.00 issue price
attributed to the 200 million Steinhoff shares received as
consideration), offset by the quarter’s increase in the pro
rata share of gearing in the special purpose vehicle that
houses Brait’s indirect shareholding in Pepkor.
- Valuation multiples for Brait’s investments remain unchanged.
- Premier traded well during the current quarter, generating
solid growth in EBITDA and cash flow. Comparing the six
months ended 31 December 2014 to the comparative period,
Premier achieved strong growth across bakeries, milling and
confectionery underpinned by pleasing growth in volumes.
Premier repaid Brait the R330 million scheduled loan
repayment (recognised at 30 September 2014 as part of Brait’s
accounts receivable) on 23 October 2014. Brait increased its
shareholding in Premier from 84.9% to 86.5% through the
exercise of existing put and call option agreements with
former Premier shareholders. The combined effect of these
items resulted in the carrying value for Premier increasing
by 6.8% for the quarter.
- The UK food retail market continues to be the most
challenging seen for many years. Consumers’ spending remains
under pressure and their preferences are changing with
limited assortment discounters, pound shops, convenience
stores and online grocers all gaining market share at the
expense of the traditional supermarket weekly shop. While
many of these changes present opportunities for Iceland Foods
given its footprint and national online offering, in the
short term the upheaval in the market has placed continued
pressure on profits as sales growth has slowed and investment
into the value proposition and marketing spend has increased.
Prices are being driven down with the market experiencing
food deflation. While Iceland’s cash generation remains
strong, these factors have led to Brait further downgrading
its assessment of Iceland’s sustainable EBITDA. The Rand
strengthened over the quarter against the GBP, closing at
R18.02 relative to 30 September 2014’s R18.30. The result of
these factors has led to the carrying value of Iceland
declining by 28.6% for the quarter.
- Southern View Finance (“SVF”) and DGB performed well and
together with SVF’s capital raise during November 2014,
resulted in a 25.4% increase for the quarter in the carrying
value of the Other Investments portfolio. The capital raise
refinanced a portion of existing debt, and provides SVF with
additional facilities for future acquisitions.
- The increase in Brait’s borrowings during the quarter funded
the treasury share purchases as well as Brait’s participation
in SVF’s capital raise. The Company remains adequately
capitalised with sufficient available cash and facilities for
potential new investments.
- Brait’s dividend policy remains unchanged.
- Operating costs for the Company remain in line with
previously communicated performance targets.
NAV Detailed Analysis:
Pro-forma Pro-forma
31-Dec-14 30-Sept-14 31-Dec-13
R’m R’m R’m
Investments 32,869 32,144 16,650
Pepkor 25,732 25,275 10,816
Premier 4,123 3,862 2,910
Iceland Foods 999 1,400 1,764
Other investments 2,015 1,607 1,160
Loan receivable 561 548 1,492
Cash and cash equivalents 879 622 413
Property and equipment - - 9
Accounts receivable 23 333 338
Total Assets 34,332 33,647 18,902
Borrowings (705) - (1,369)
Accounts payable and
provisions (33) (19) (103)
Total liabilities (738) (19) (1,472)
Preference share equity (1,964) (1,964) (1,964)
Net Asset Value 31,630 31,664 15,463
Number of issued shares ('mil)
excluding treasury shares 510.5 516.2 508.5
Net asset value per share
(ZAR) 61.96 61.35 30.41
The comparative 31 December 2013 carrying values shown above for
Other Investments and Cash and Cash Equivalents have been restated
as a result of Brait’s adoption of IFRS 10 Consolidated Financial
Statements. These reclassifications are not material and resulted
in no change to the reported NAV per share of R30.41.
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
4 February 2015
The Company is primarily listed on the Euro MTF market of the
Luxembourg Stock Exchange and secondarily listed on the
Johannesburg Stock Exchange.
Financial Adviser and Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
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