Half-Year Results Show Excellent Growth For African Equity Empowerment Investments Limited As Revenue Shoots Up By 18%

4 May 2016
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Highlights

  • Group revenue up by 18%
  • Operating profit up by 39%
  • Earnings per share increased to 67%
  • Headline earnings per share up by 31%
  • Total assets increased to 23%
  • Net asset value up by 23%
  • Net operating cash generated up by 169%
  • A dividend of R12,3m paid to its shareholders

“Another sterling performance for the interim period to 29 February 2016 has set the platform for outstanding profit growth for AEEI. We are very pleased to have exceeded our growth targets during this exciting new phase for our Group. This comes as a result of strong contributions from all AEEI’s underlying operations and investments” says a proud Khalid Abdulla, chief executive officer of the AEEI Group as he announced the results today.

All the Group’s subsidiaries have shown good growth in profitability. Our major operations in Food & Fishing as well as IT are showing outstanding performances due to strategies to extract efficient organic growth and synergies. The platform here is set for acquisitive growth going forward.
For the interim period, the Group revenue increased by a strong 18%, while its operating profit improved by 39%. The Group’s earnings per share and headline earnings per share increased by 67% and 31% respectively. The total assets as well as the Net Asset Value per share (NAV) increased by 23%.

As a result of solid financial performance from the underlying divisions and efficient working capital management, net cash from operations increased impressively by 169% from R11m to R29m.

Professor Vukile Mehana, non-executive Chairman of the AEEI Board says, “The performance to date has to be applauded as traditionally the second half of the Group’s performance produces significantly stronger results due to the seasonal nature of some of the businesses.”

The Group’s asset base increased by R291m to R1 536m (2015: R1 245m). This was mainly due to the growth of its operations.

While restructuring its shareholding in Saab SA (Pty) Ltd, AEEI disposed of its 5% investment in Saab SA and acquired a 25% + 1 equity share in Saab Grintek Defence (SGD) during the period under review.

The Group’s acquisition in SGD is seen to be an important breakthrough for both SGD and AEEI for its growth plans within South Africa, Africa and abroad – by adding value, creating jobs in order to alleviate poverty, and finding solutions in the global market.

AEEI also acquired an investment in Sygnia on 14 October 2015 for R10m, the value of which has subsequently increased by an impressive 80%.

Abdulla stated that the Group’s strategic investments are hand-picked, which will deliver synergistic value.

BTSA is well positioned to grow consistently over the next few years, with expected growth in earnings as well as in dividend returns.

The Group’s strategic investments include British Telecommunication Services South Africa (Pty) Ltd (BTSA), Pioneer Foods Group Limited (Pioneer), Sygnia Limited (Sygnia) and Saab Grintek Defence (Pty) Ltd.

“These deals are testament that AEEI is the empowerment partner of choice to large multinationals.” said Abdulla.

When asked about its strategic investments, Abdulla confirmed that, “A focused strategy on organic growth, debt reduction and continuous reinvestment and investment in our strategic partners has led to us reaching our objective of building a solid and sustainable high growth company.”

Abdulla added, “Due to the cyclical nature of the underlying operations and investments, historically the Group’s performance is stronger during the second half of the year.”

“Going forward we will consistently grow organically and will also do more acquisitions. We alluded to listing our food and fishing as well as IT divisions at last year’s financial year end. It seems that this may become a reality within the next three to five years,” he said.

The Group’s Vision 2020 Vision has already shown its benefits with key performance indicators which include, amongst others, an increase in revenue, total assets, operating profit as well as increasing operational cash flow and NAV.”

Abdulla concludes by saying, ”We are very pleased to have exceeded our growth targets during this exciting new phase of the Group’s growth. With the cash flow having increased significantly, we are set to show significant growth in the second half of the year and the years to come and we are striving to consistently pay dividends to our shareholders. This would not have been possible without our people and their continued focus on operating efficiencies and better portfolio management, which remain the key drivers of our performance.”