BRIMSTONE INVESTMENT CORPORATION LIMITED - Voluntary Intrinsic Net Asset Value disclosure

Release Date: 06/04/2017 12:35
Code(s): BRT BRN
 
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Voluntary Intrinsic Net Asset Value 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 Intrinsic Net Asset Value disclosure

Shareholders are advised that Brimstone has resolved to report on Intrinsic Net Asset Value (“Intrinsic NAV”) on a quarterly basis going forward. A full analysis of the Intrinsic NAV, together with
applicable explanations for the quarter ended 31 March 2017 is set out below.
                                                                                                                                                                                                         CAGR
                                                           Change                                                                                                                                 (2012-2016)
                                                 December 2016 to          31 March        31 December          31 December         31 December         31 December          31 December            excluding
Summary                                                March 2017              2017               2016                 2015                2014                2013                 2012            dividends
Intrinsic NAV of Brimstone (Rm)                            (2.2)%           5 019.1            5 133.9              4 229.4             4 862.3             4 187.0              3 604.9                 9.2%
Book NAV (Rm)                                                                                  2 427.1              2 530.3             3 325.0             3 237.6              2 814.9
Intrinsic NAV per share (cents)¹                           (2.5)%           2 086.5            2 139.5              1 741.4             1 979.4             1 708.8              1 473.7                 9.8%
Fully diluted Intrinsic NAV per share (cents)¹             (4.4)%           1 952.5            2 043.1              1 647.8             1 857.8             1 615.6              1 398.5                 9.9%
Book NAV per share (cents)                                                                     1 011.5              1 044.0             1 356.3             1 324.0              1 153.1
Market price per share (cents)
   Ordinary shares                                          11.6%             1 450              1 299                1 350               1 700               1 400                1 125                 3.7%
   ‘N’ Ordinary shares                                      20.0%             1 440              1 200                1 270               1 650               1 400                1 195                 0.1%
Discount to Intrinsic NAV
   Ordinary shares                                                            30.5%              39.3%                22.5%               14.1%               18.1%                23.7%
   ‘N’ Ordinary shares                                                        31.0%              43.9%                27.1%               16.6%               18.1%                18.9%


Intrinsic NAV analysis by asset

An analysis of the Intrinsic NAV of Brimstone as at 31 March 2017 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.
                                                                                                                                                           March                                   December
                                                                                                                                             March          2017                     December          2016
                                               Share     Share price                                                                          2017     Intrinsic                         2016     Intrinsic
                                            price at           at 31                                 Gross                               Intrinsic       NAV per         Gross      Intrinsic       NAV per
                                            31 March        December                                 value         Debt          CGT           NAV         share     portfolio            NAV         share     Increase /
 Asset                          % held          2017            2016          Valuation basis      (R'000)      (R'000)      (R'000)        (R'000)      (cents)     weighting        (R'000)       (cents)    (Decrease)
 Oceana                          17.0%        104.01          120.00   Market value per share    2 392 970    (247 198)    (359 270)      1 786 501        742.7         26.1%      2 043 380         851.6        (12.8)%
 Sea Harvest² ³                  54.9%         13.50                   Market value per share    1 863 544           -            -       1 863 544        774.7         20.3%      2 235 918         931.8        (16.9)%
 Life Healthcare                  4.7%         28.99           32.60   Market value per share    1 454 103    (262 566)    (309 362)        882 175        366.7         15.8%      1 029 469         429.0        (14.5)%
 Life Healthcare NPLs                           4.50                   Market value per share       77 232                  (17 300)         59 932         24.9          0.8%              -             -             -
 Phuthuma Nathi                   7.0%        127.00          130.82   Market value per share      601 797    (227 591)          122        374 329        155.6          6.6%        390 985         162.9         (4.5)%
 Grindrod – BEE                   6.1%         14.30           13.45   Market value per share      662 316    (739 257)      111 518         34 576         14.4          7.2%         20 920           8.7         64.9%
 Grindrod – direct                0.6%         14.30           13.45   Market value per share       60 379           -          (11)         60 368         25.1          0.7%         57 583          24.0           4.6%
 Equites                         10.0%         17.15           15.80   Market value per share      598 476    (416 566)     (30 607)        151 303         62.9          6.5%        124 778          52.0          21.0%
 Tiger Brands option4             0.9%        400.45          397.83         Option valuation      382 164           -      (82 597)        299 567        124.5          4.2%        292 655         122.0           2.1%
 Lion of Africa5                100.0%                                             Book value      142 919           -        89 122        232 041         96.5          1.6%        232 041          96.7         (0.2)%
 MTN Group6                                                   126.17   Market value per share            -           -       (1 360)        (1 360)        (0.6)          0.0%         70 682          29.5       (101.9)%
 MTN Zakhele Futhi4               1.5%                                       Option valuation       63 646           -         (722)         62 923         26.2          0.7%         65 368          27.2         (4.0)%
 Investment properties         100.0%                                    Capitalisation rate       69 773     (13 770)     (11 406)         44 597         18.5          0.8%         44 597          18.6         (0.2)%
 Aon Re Africa5                  18.0%                                           PE valuation       58 206           -      (11 250)         46 955         19.5          0.6%         46 955          19.6         (0.2)%
 House of Monatic5              100.0%                                             Book value       45 190           -        14 820         60 010         24.9          0.5%         60 010          25.0         (0.2)%
 Other investments5            Various                                             Book value       52 215           -       (3 745)         48 470         20.1          0.6%         47 854          19.9           1.0%
 Cash/net debt                  100.0%                                             Book value      649 398  (1 636 256)           -       (986 858)       (410.3)         7.1%    (1 629 286)       (679.0)        (39.6)%

                                                                                                 9 174 327  (3 543 205)   (612 048)       5 019 074       2 086.5        100.0%     5 133 910       2 139.5         (2.5)%

 Intrinsic NAV per share (cents)                                                                     3 814      (1 473)       (254)           2 087
 Fully diluted Intrinsic NAV per share (cents)                                                       3 578      (1 392)       (234)           1 953


Notes:
1. Based on 240.5 million shares (December 2016: 239.95 million shares) in issue, net of treasury shares as calculated below:

                                                                                                                                                 Number of        Fully diluted
                                                                                                                                                 shares in            number of
                                                                                                                                                     issue               shares
  Gross number of shares in issue                                                                                                              283 073 885          283 073 885
  Treasury shares (fully diluted number is net of notionally realised shares issued in terms of circular dated 18 Nov 2010)                    (42 525 690)         (29 815 654)
                                                                                                                                               240 548 195          253 258 231
  Outstanding share options                                                                                                                                           1 339 096
  Net shares in issue for Intrinsic NAV purposes                                                                                               240 548 195          254 597 327

2. No CGT provided on shareholding in Sea Harvest due to potential use of the corporate relief provisions of the Income Tax Act.
3. Decrease in value of Sea Harvest since 31 December 2016 due to having received R576 million in cash as repayment of shareholder loan and redemption of preference shares,
   which is reflected in surplus cash on hand.
4. Valuations of investments treated as options have been updated by an independent expert as at 31 March 2017.
5. Valuations of unlisted investments have not been updated since 31 December 2016.
6. MTN Group shares sold during March 2017, realising an average price of R127.56 per share.


The above information has not been reviewed or reported on by the Company’s auditors.



6 April 2017

Sponsor

Nedbank Corporate and Investment Banking

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