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BRIMSTONE INVESTMENT CORPORATION LIMITED - Voluntary Quarterly Intrinsic Net Asset Value (NAV) disclosure

Release Date: 06/04/2018 08:30
Code(s): BRT BRN     PDF:  
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Voluntary Quarterly Intrinsic Net Asset Value (“NAV”) 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 Quarterly Intrinsic Net Asset Value (“NAV”) disclosure

A full analysis of the Intrinsic NAV, together with applicable explanations for the quarter ended 31 March 2018 is set out below.


                                                         Change
                                                       Dec 2017           31 March         31 December         31 December         31 December    31 December    31 December    31 December
Summary                                             to Mar 2018               2018                2017                2016                2015           2014           2013           2012
Intrinsic NAV of Brimstone (R’m)                         (5.1)%            4 099.7             4 317.9             5 133.9             4 229.4        4 862.3        4 187.0        3 604.9
Book NAV (R’m)                                                                                 2 782.0             2 427.1             2 530.3        3 325.0        3 237.6        2 814.9
Intrinsic NAV per share (cents)¹                         (5.1)%            1 709.9             1 800.9             2 139.5             1 741.4        1 979.4        1 708.8        1 473.7
Fully diluted Intrinsic NAV per share (cents)¹           (5.2)%            1 660.2             1 750.9             2 043.1             1 647.8        1 857.8        1 615.6        1 398.5
Book NAV per share (cents)                                                                     1 160.3             1 011.5             1 044.0        1 356.3        1 324.0        1 153.1
Market price per share (cents)
   Ordinary shares                                      (15.4)%              1 100               1 300               1 299               1 350          1 700          1 400          1 125
   ‘N’ Ordinary shares                                     6.2%              1 195               1 125               1 200               1 270          1 650          1 400          1 195
Discount to Intrinsic NAV
  Ordinary shares                                                            35.7%               27.8%               39.3%               22.5%          14.1%          18.1%          23.7%
  ‘N’ Ordinary shares                                                        30.1%               37.5%               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 2018 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.


 Asset                         % held          Share       Share          Valuation basis        Gross          Debt          CGT     Mar 2018     Mar 2018        Gross      Dec 2017     Dec 2017     Increase /
                                            price at    price at                                 value       (R'000)      (R'000)    Intrinsic    Intrinsic    portfolio     Intrinsic    Intrinsic     (Decrease)
                                              31 Mar      31 Dec                               (R'000)                                     NAV      NAV per    weighting           NAV      NAV per
                                                2018        2017                                                                       (R'000)        share                    (R'000)        share
                                                                                                                                                    (cents)                                 (cents)
Oceana                          17.0%          82.50       85.00   Market value per share    1 898 087     (246 300)    (248 417)    1 403 370        585.3        23.5%     1 082 624        451.5         29.6%
Sea Harvest ²                   54.9%          12.40       12.50   Market value per share    1 711 700             -           -     1 711 700        713.9        21.2%     1 725 504        719.7        (0.8)%
Life Healthcare                  3.5%          27.61       27.75   Market value per share    1 416 456           174    (292 206)    1 124 424        469.0        17.6%     1 278 803        533.4       (12.1)%
Equites                          8.5%          20.15       21.00   Market value per share      703 166     (415 871)     (51 041)      236 253         98.5         8.7%       269 059        112.2       (12.2)%
Grindrod – BEE ³                 6.1%          13.76       13.65   Market value per share      637 305     (813 496)     117 120             -            -         7.9%             -            -             -
Grindrod – direct                0.6%          13.76       13.65   Market value per share       58 099             -        500         58 599         24.4         0.7%        58 238         24.3          0.6%
Phuthuma Nathi                   7.0%          86.72       99.22   Market value per share      410 919     (158 491)           -       252 428        105.3         5.1%       308 650        128.7       (18.2)%
Tiger Brands                                              460.00         Option valuation            -             -           -             -            -         0.0%       310 413        129.5      (100.0)%
Stadio & Milpark                 5.4%           5.74        8.05   Market value per share      287 918             -    (22 221)       265 697        110.8         3.6%       233 441         97.4         13.8%
                                                                              & valuation
Long4Life                        4.0%           5.93        4.90   Market value per share      210 515             -       1 900       212 415         88.6         2.6%       184 040         76.8         15.4%
Investment properties          100.0%                                 Capitalisation rate      219 868      (60 665)     (22 627)      136 576         57.0         2.7%       136 566         57.0          0.0%
FPG Property Fund               10.0%                                          Book value      131 681             -           -       131 681         54.9         1.6%             -            -             -
Lion of Africa                 100.0%                                          Book value       90 581             -    109 806        200 387         83.6         1.1%       200 387         83.6          0.0%
MTN Zakhele Futhi 4              1.5%                                    Option valuation       70 564             -     (2 272)        68 292         28.5         0.9%        68 292         28.5          0.0%
Aon Re Africa                   18.0%                                        PE valuation       64 496             -    (12 659)        51 837         21.6         0.8%        51 837         21.6          0.0%
House of Monatic               100.0%                                          Book value       16 320             -           -        16 320          6.8         0.2%        16 320          6.8          0.0%
Other investments             Various                                           Valuation      103 415             -     (8 787)        94 628         39.5         1.3%        92 863         38.7          1.9%
Cash / (net debt)              100.0%                                          Book value       39 681   (1 904 591)          -    (1 864 910)      (777.8)         0.5%   (1 699 105)      (708.6)          9.8%
                                                                                             8 070 771   (3 599 239)   (430 906)     4 099 696      1 709.9       100.0%     4 317 930      1 800.9        (5.1)%

Intrinsic NAV per share (cents)                                                                  3 366       (1 501)       (180)         1 710
Fully diluted Intrinsic NAV per share (cents)                                                    3 266       (1 456)       (174)         1 660

Notes:
1. Based on 239.8 million shares (December 2017: 239.8 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                                                                                                    268 532 558     268 532 558
  Treasury shares (fully diluted number is net of notionally realised shares issued to staff and management share trusts and FSPs)   (28 765 364)    (21 920 196)
                                                                                                                                     239 767 194     246 612 362
  Outstanding share options                                                                                                                    -         619 319
  Net shares in issue for INAV purposes                                                                                              239 767 194     247 231 681


2. No CGT provided on shareholding in Sea Harvest due to potential use of the corporate relief provisions of the Income Tax Act.
3. Due to the limited recourse nature of the Grindrod BEE funding structure, Brimstone's investment is shown at a minimum value of zero.
4. Valuations of investments treated as options were updated by an independent expert as at 31 December 2017.

The Intrinsic NAV information presented has been prepared on a basis consistent with that used in the integrated report for the year ended 31 December 2017 which is available on the Company’s
website at www.brimstone.co.za.

The above information is the responsibility of the directors and has not been reviewed or reported on by the Company’s auditors.

6 April 2018

Sponsor

Nedbank Corporate and Investment Banking

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