Brimstone slids into loss
|Published
19/04/2010 A generic pic of the JSE board at Sandton JHB. Photo: Leon Nicholas 19/04/2010 A generic pic of the JSE board at Sandton JHB. Photo: Leon Nicholas
Johannesburg - Western Cape-based empowerment investment group Brimstone reported a tough six months to June as it had its listed investments revalued downwards and suffered a loss at its subsidiary Lion of Africa Insurance.
The company said losses for the period amounted to R480 million, compared with a profit of R310 million for the same period last year. “The significant contributor to this reduction in earnings was the downward revaluation of investments,” the company said in a statement, adding that “this had been compounded by poor results from operating subsidiary Lion of Africa Insurance Company”.
Losses at Lion of Africa amounted to R105 million in the period under review, but the subsidiary already has a turnaround team and plan in place, including a commercial arrangement with Zurich Insurance South Africa and recapitalisation by Brimstone for R150 million.
Its subsidiary Sea Harvest, where Brimstone has a 58 percent interest, saw an 8 percent fall in catch due to “challenging fishing conditions”, but had a 12 percent increase in sales volumes boosted by the export market.
Its fully owned luxury goods retailer subsidiary House of Monatic showed pleasing results, with turnover increasing to R104,2 million and a net profit to R2.8 million while permanent staff increased to 840.
Dividend receipts, including R21 million from Oceania and R11 million from Aon Re Africa, and a R36 million profit from the disposal of Obsidian Health were weighed down by a R288 million loss from logistics group Grindrod, which was accompanied by a downward valuation of the investment, along with downward valuations in Life Healthcare and Tiger Brands.
Investments in MTN Zakhele, Multichoice scheme Phuthuma Nathi and Taste Holdings all made a positive contribution and were revised upwards.
The company was cautiously upbeat in the assessment of its prospects. “The group’s assets are characterised by strong underlying businesses with positive dividend paying ability,” the company said in its statement, “whilst the current results were subject to significant fair market value losses, the group maintains its positive long-term view on its investments”.
ANA