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Once the darling of the local bourse, Brait’s fall from grace over the past few years has been short of disastrous. The private-equity powerhouse turned debt-laden investment house has left a sour taste in many portfolio managers mouths, with value destruction totalling hundreds of billions of rands. Peter Hayward-Butt has the unenviable task of getting the once juggernaut back on track and formed part of the BizNews Power Hour on results day. Peter, an ex-investment banker and also chief executive of Ethos Private Equity, was quietly confident on the performance of the underlying businesses throughout the Covid period, maintaining that company has a number of quality businesses within the Brait stable. – Justin Rowe-Roberts
Peter Hayward-Butt on the new look (no pun intended) Brait:
Brait has a great history. It’s obviously had a troubled last four or five years but it has a great history. The start of the troubles were when they bought into New Look – at the time it seemed a great place to be. As we know, the world has changed and that was the start of a bit of a downward spiral in terms of the net asset value per share of the company. Ethos was lucky enough to come in as parts of the rights issue around a year ago. It’s early days for us but we’ve taken over a great portfolio of assets. There’s still lots of work to be done in a Covid world.
On the heavy discount to net-asset-value in the Brait share price:
We do a huge amount of work with third parties to ensure that our net-asset-value is as close to fair value as what we believe. I think we’ve got a portfolio of four really great core companies – Virgin Active, Premier, New Look and Consol. These are really high quality assets. So I suppose the risk that people having coming in, is whether we are right about our valuations – I am relatively confident of that. I think another issue which people rightly raise is the level of debt within Brait – at a holding company level as well as an operating company level.
On the performance of Virgin Active through Covid-19:
It’s a high quality portfolio of different territories – it’s a household name in South Africa, it’s a high quality business in the UK, it’s got a dominant position in Italy and it operates in the Asia-Pacific region, that being Singapore, Thailand and Australia. It really is a global business in the health and wellness space. Covid has been a disaster for the business. That being said, I think management has done a great job in pulling it through over the last twelve to fifteen months.
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