INVESTMENTS INTERIM RESULTS EXCEED EXPECTATIONS AT AFRICAN EQUITY EMPOWERMENT INVESTMENTS LTD

11 May 2017
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Salient features
-           Revenue increased by 47% from R305m to R449m
–           Operating profit increased by 145% from R74m to R181m
–           Earnings per share increased by 110% from 14.04 cents to 20.48 cents
–           Headline earnings per share increased by 111% from 14.02 cents to 20.53 cents
–           Total assets increased by 20%  from R1 535m to R1 841m
–           Net Asset Value (NAV) increased by 34% from R847m to R1 138m
–           Net cash generated from operating activities increased by 21% from R29m to 35m

JSE-listed African Equity Empowerment Investments Limited (AEEI), a diversified investment and empowerment company today announced outstanding interim results to 28 February 2017 with excellent revenue and profit growth as a result of strong contributions from all its underlying operations and investments for the interim period under review.

With its implementation of Vision 2020 Vision strategy plans the AEEI Group confirmed that its revenue had increased by 47% from R305 million to R449 million mainly due to the significant growth in revenue from the technology division which is in line with its acquisition plans.

“The 2016 Financial Year has been filled with global and local challenges on political, economic and social fronts, but at AEEI we remained steadfast and focused on reaching our goals. The Group is on a positive trajectory and I am delighted that we are able to demonstrate an improved financial performance, thereby driving sustainable returns for all stakeholders. We have been especially fortunate to exceed our targets for the year as a result of greater revenue growth achieved from the Food and Fishing, Technology and Events and Tourism divisions, ”says Mr Khalid Abdulla, Group chief executive officer of AEEI as he announced the Group’s results today.

“This year, the implementation of our strategy of organic growth, continuous reinvestment and strategic acquisitions with the objective of building a sustainable high-growth Company for the future, is now reflecting in the Group’s financial results, ” Abdulla added.

Group earnings grew by 142% from R57 million to R138 million compared to the prior interim period.

Headline earnings per share increased by 111% from 14.02 cents to 29.53 cents and earnings per share increased by 110% from 14.04 cents to 29.48 cents for the six months under review.

Profit before tax for the period increased by 150% from R74 million to R185 million with improved returns from our diversified investment portfolio.

AEEI’s strategic intent to increase its asset base is evident in the Group’s total asset base which increased by 20% from R1 535 million to R1 841 million mainly due to the increase in acquisitions and the increase in its investments since the comparative interim period. This is as a result of the acquisitions in Headset Solutions and Puleng Technologies during October and November last year.

Additional acquisitions were made post interim results to end 28 February 2017 and is set to further grow AEEI’s asset growth.

Net Asset value (NAV) increased by 34% from R847 million to R1 138 million as a results of excellent operations performance of all our underlying operations and investments, which was particularly pleasing for Abdulla. The NAV per share increased by 38% from 156.7 cents to 216.47 cents.

Non-executive chairman, Professor Vukile Mehana said, “I am proud of AEEI’s performance in an especially tough operating environment. The Group has made good on its promises to further improve shareholder value through the listing of Premier Food and Fishing, and is working hard to, amongst other goals, attain critical mass for listing its Technology division shortly.”

On 2 May, Premier Food and Fishing (PFF), the largest black-owned and controlled fishing company in South Africa, was listed on the main board of the JSE. The Company was able to raise capital in the amount of R526 million on the listing date through the issue of 117 million new shares to the public hence increasing the issued shares of the company from 143 million ordinary shares to 260 million ordinary shares in issue.

Chief Executive Officer of PFF, Samir Saban, expressed that the capital raised would be used for the expansion of the company’s abalone farm, as well as for acquisitions of other fishing companies. The Group reported that the expansion of the abalone farm will commence shortly with the expansion of the farm from 100 tons to 300 tons.

Premier Fishing submitted its long-term fishing rights for west coast rock lobster (WCRL), horse mackerel and hake inshore to the Department of Agriculture, Forestry and Fishing (DAFF) during February 2016. The company was successful in its application for horse mackerel and still awaits the outcome of its application for the WCRL fishing rights from DAFF.

Abdulla added, “We are satisfied that  PFF is well positioned for organic and acquisitive growth to deliver the projected outlook for sustainable returns for all stakeholders in terms of its Vision 2020 Vision.”

The Technology Solutions Group’s revenue increased by 17% from R185m to R216m on the back of the successful implementation of the Hospital Information and Laboratory Systems (HIS) project by Health Systems Technology (HST) in 230 pathology laboratories, which it concluded at the end of September 2015.

The Technology Solutions Group grew its earnings and achieved excellent growth with its operating profits of R33m compared to R20m for the prior year. “We are working onxxxxxxxxxxxxxx

The AEEI Events and Tourism’s division delivered excellent revenue growth by achieving a 15% increase from R97m to R126m as a result of a new event being launched and access into the leisure travel industry.

The Royal Escape Experience is the first in a series of new ‘luxurious entertainment experiences’ and the revenue generated in this respect will reflect in the 2016/2017 Financial Year. The event

received great feedback from corporate guests who attended and generated positive media responses.

Since the launch on 1 October 2015, Magic 828 radio station is operating smoothly. The focus has shifted from operations to marketing and exploring various offerings and with revenue expecting to increase, they should break-even during this financial year.

AEEI is actively engaging in a turnaround strategy for Tripos Tourism Investments. We plan to increase our percentage of leisure inbound travel as well as creating tours both in inbound and out which will aid in increasing our margins. The business now has an efficient base and stable business model with available capacity which can now be leveraged off to grow profitability.

The Healthcare division, comprising Sekpharma (Pty) Ltd and Wynberg Pharmaceuticals (Pty) Ltd, focuses on the production of a diverse range of organic products in the agriculture and food sectors.

Genius Biotherapeutics (Genius), formerly known as Bioclones (Pty) Ltd, is South Africa and Africa’s largest medical biotechnology company, with strategic interests in biogenetics and novel compounds. Medical protocols are being established and we are on the cusp of commencing with human clinical trials.

STRATEGIC INVESTMENTS

British Telecom Communications Services South Africa (BTSA), Saab Grintek Defense and Sygnia Asset Managers form the strategic investment arm of AEEI. The investment in BTSA is well positioned to grow consistently over the next few years.

Saab is the South African operation of Swedish multi-national Saab AB, specialising in civil security and defence. AEEI is in the final stages of increasing its shareholding in Saab due to it being recognised as a value-adding partner of choice.

Pioneer Food continues to bear fruit with exceptional results for the year under review.

The company’s Vision 2020 Vision strategy introduced earlier this year is set to build the Group into reaching its growth objectives, with key performance indicators which include, amongst others, doubling of revenue, total assets, increasing operating profit sustainability, increasing operational cash flow and NAV.

The consistent year on year display of excellent financial performance and the steady growth of the Company’s share price should send strong signals to the market that AEEI, with its diversified portfolio, strong BBBEE credentials and potential local and international growth, is a Company worth investing in.

Abdulla concludes by saying, “Looking ahead, AEEI now has a solid balance sheet and our cash flow has improved. Our business model is on a firm growth path and we continue to add value for our shareholders”.

“I am confident that because we have again built on our growth trajectory of profitability, our investment portfolio, strong cash flows and starting to consistently pay dividends to shareholders, we are well-positioned to further grow the business over the medium to long term,” concludes Abdulla.

More about African Equity Empowerment Investments Limited:

African Equity Empowerment Investments Limited (AEEI) is a listed entity on the Johannesburg Stock Exchange (JSE) since 1999 and holds strategic investments, some with international partners, as well as operational investments in food & fishing, technology, health care & biotherapeutics and events and tourism.

AEEI is recognised by its peers as a successful pioneer in promoting the interests of HDIs and previously marginalised communities. The Group’s commitment to transformation, including employment equity, skills and enterprise development, as well as corporate social investment, makes it a role model for BBBEE.

AEEI is an exporter and generates a significant portion of income in foreign currency and also has stakes in British Telecommunications South Africa and SAAB SA.

Awards to date:

  • Level 1 BBBEE status in terms of Broad based Black Economic Empowerment and Top most empowered company in its sector.
  • AEEI was rated 10th overall in 2015 in the Highest Sustainability Data Transparency Index Score by the Integrated Reporting Assurance Services – out of the top 500 JSE Listed companies. In 2014, AEEI received the Top Award – Highest Sustainability Data Transparency Index Score in the Financial Services and was rated 16th  In 2013 AEEI was ranked 182 overall.
  • AEEI received the Impumelelo Certificate of Excellence – Top Empowered Companies – in recognition of our commitment to transformation for the 2015 year.
  • Financial Mail’s Top JSE Listed Companies 2015 ranked AEEI 13th overall with a total score rating of 54,4 compared to the previous years 35,4.
  • AEEI was a Finalist in the Top Empowered Business of the Year Award at the 14th Oliver Empowerment Awards in 2015.

For further information and to schedule interviews with the CEO Mr Khalid Abdulla, contact:
Feroza Petersen
Communications and Marketing Manager

Email:      Feroza@aeei.co.za
Tel:          +27 21 427 1400
Mobile:   +27 82 801 3919
Web:       aeei.co.za