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

Release Date: 13/11/2018 12:22
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 30 September 2018 is set out below.

Summary                                                  Change       30 September              30 June       31 December           31 December       31 December    31 December    31 December
                                                   June 2018 to               2018                 2018              2017                  2016              2015           2014           2013
                                                 September 2018
Intrinsic NAV of Brimstone (Rm)                            6.0%            4 260.3             4 020.6            4 317.9               5 133.9           4 229.4        4 862.3        4 187.0
Book NAV (Rm)                                             19.0%            2 782.9             2 338.4            2 782.0               2 427.1           2 530.3        3 325.0        3 237.6
Intrinsic NAV per share (cents)¹                           6.0%            1 752.3             1 653.7            1 800.9               2 139.5           1 741.4        1 979.4        1 708.8
Fully diluted Intrinsic NAV per share (cents)¹             6.2%            1 713.7             1 614.0            1 750.9               2 043.1           1 647.8        1 857.8        1 615.6
Book NAV per share (cents)                                19.0%            1 144.6               961.8            1 160.3               1 011.5           1 044.0        1 356.3        1 324.0
Market price per share (cents)
   Ordinary shares                                         2.0%              1 020               1 000              1 300                 1 299             1 350          1 700          1 400
   ‘N’ Ordinary shares                                   (2.0)%                980               1 000              1 125                 1 200             1 270          1 650          1 400
Discount to Intrinsic NAV
  Ordinary shares                                                            41.8%               39.5%              27.8%                 39.3%             22.5%          14.1%          18.1%
  ‘N’ Ordinary shares                                                        44.1%               39.5%              37.5%                 43.9%             27.1%          16.6%          18.1%
Intrinsic NAV analysis by asset

An analysis of the Intrinsic NAV of Brimstone as at 30 September 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      Sep 2018     Sep 2018        Gross      December      December       Increase /
                                            price at   price at                                 value      (R'000)      (R'000)     Intrinsic    Intrinsic     portfolio         2017          2017      (Decrease)
                                             30 Sept     31 Dec                                (R'000)                                    NAV      NAV per    weighting     Intrinsic     Intrinsic
                                                2018       2017                                                                       (R'000)        share                        NAV       NAV per
                                                                                                                                                   (cents)                    (R'000)         share
                                                                                                                                                                                             (cents)
 Oceana                         17.0%          82.47      85.00   Market value per share    1 897 397     (246 847)    (248 262)    1 402 288        576.8        23.8%     1 082 624         451.5          27.7%
 Sea Harvest²                   50.6%          14.00      12.50   Market value per share    1 932 565            -            -     1 932 565        794.9        24.2%     1 725 504         719.7          10.5%
 Life Healthcare                 3.4%          24.56      27.75   Market value per share    1 215 666           16     (248 541)      967 141        397.8        15.2%     1 278 803         533.4        (25.4)%
 Equites                         7.7%          20.00      21.00   Market value per share      697 931     (413 617)     (48 397)      235 917         97.0         8.7%       269 059         112.2        (13.5)%
 Grindrod – direct4              0.6%          10.30      13.65   Market value per share       43 479            -        9 199        52 678         21.7         0.5%        58 238          24.3        (10.8)%
 Phuthuma Nathi                  7.0%         141.51      99.22   Market value per share      670 571     (122 038)     (15 020)      533 514        219.4         8.4%       308 650         128.7          70.5%
 Tiger Brands                                            460.00         Option valuation            -            -            -             -            -         0.0%       310 413         129.5       (100.0)%
 Stadio & Milpark                5.3%           4.20       8.05   Market value per share      223 564            -       (7 125)      216 439         89.0         2.8%       233 441          97.4         (8.6)%
                                                                                  & cost
 Long4Life                       3.4%           4.70       4.90   Market value per share      145 498            -            -       145 498         59.8         1.8%       184 040          76.8        (22.0)%
 Investment properties         100.0%                                Capitalisation rate      219 868      (61 031)     (22 627)      136 209         56.0         2.8%       136 566          57.0         (1.6)%
 FPG Property Fund              10.0%                                         Book value      129 771            -          606       130 377         53.6         1.6%
 Lion of Africa                100.0%                                         Book value       63 003            -      115 984       178 987         73.6         0.8%       200 387          83.6        (11.9)%
 MTN Zakhele Futhi5              1.5%                                   Option valuation       44 207            -        3 632        47 839         19.7         0.6%        68 292          28.5        (30.9)%
 Aon Re Africa                  18.0%                                       PE valuation       85 299            -      (17 319)       67 980         28.0         1.1%        51 837          21.6          29.3%
 House of Monatic              100.0%                                Adjusted book value       28 489            -            -        28 489         11.7         0.4%        16 320           6.8          72.2%
 Other investments            Various                                          Valuation      114 207            -       (8 988)      105 219         43.3         1.4%        92 863          38.7          11.7%
 Cash / (net debt)             100.0%                                         Book value     (11 867)   (1 908 926)           -    (1 920 793)      (790.0)      (0.1)%   (1 699 105)       (708.6)          11.5%

                                                                                            7 499 648   (2 752 443)    (486 860)    4 260 345      1 752.3        94.0%     4 317 930       1 800.9

 Grindrod – BEE 3 4                                                                           476 937     (853 758)      212 548            -            -         6.0%             -             -

                                                                                            7 976 584   (3 606 201)    (274 312)    4 260 345      1 752.3         100%     4 317 930       1 800.9

 Intrinsic NAV per share (cents)                                                                3 281       (1 483)        (113)        1 752
 Fully diluted Intrinsic NAV per share (cents)                                                  3 207       (1 449)        (110)        1 714


Notes:
1. Based on 243.1 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                                                                                                  267 829 690       267 829 690
  Treasury shares (fully diluted is net of notionally realised shares issued to staff and management share trusts and FSPs)        (24 701 184)      (18 963 697)
  Net shares in issue for INAV purposes                                                                                            243 128 506       248 865 993


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. Brimstone now holds a combination of Grindrod Limited and Grindrod Shipping shares. Price shown calculated on a pro forma basis.
5. Valuation of MTN Zakhele Futhi investment treated as an option and was updated by an independent expert as at 30 September 2018.

The INAV 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.

13 November 2018

Sponsor

Nedbank Corporate and Investment Banking

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