Brait reports a 20% increase in NAV

Investment company Brait has released its year end results for the period ended 31 March 2014, and declared a bonus share issue. Brait is primarily listed on the Euro MTF Market of the Luxembourg Stock Exchange and has a secondary listing on the JSE. Brait focuses its investments on privately owned companies where it looks to hold long-term interests with significant influence. The investment group currently holds an impressive R30 billion market cap and its share price has increased by 55% over the last year. Brait has a modest PE ratio of 10,63.

Key Highlights from the results

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

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".

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