BRAIT SE
(Registered in Malta as a European Company) (Registration No. SE1)
Share code: BAT ISIN: LU0011857645
Bond code: WKN: A1Z6XC ISIN: XS1292954812 LEI code: 549300VB8GBX4UO7WG59
("Brait", the "Company" or "Group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017 KEY HIGHLIGHTS
- Brait's reported Rand NAV per share at 30 September 2017 is ZAR66.62
For the quarter, this represents a decrease of 10.1% compared to the ZAR74.14 reported at 30 June 2017
For the six month period, this represents a decrease of 14.8% compared to 31 March 2017's reported NAV per share of ZAR78.15
For the twelve month period, this represents a decrease of 36.6% compared to 30 September 2016's NAV per share of ZAR105.06
The three year CAGR for reported Rand NAV per share to 30 September 2017 is 24.2% per annum (benchmark of 15% per annum); including ordinary share dividends it is 25.5%
Since 1 April 2011's NAV per share of ZAR16.50, the 6.5 year CAGR to 30 September 2017 for reported Rand NAV per share is 24.0% per annum Performance against targets (1)
Performance metric Position at 30 September 2017
NAV CAGR > 15% per year over any - 24.2% CAGR since 30 September 2014
3 year period - 24.0% CAGR since 1 April 2011
Dividend: 1% - 2.5% of closing NAV - FY2017: 1% of R78.15 NAV paid August 2017 (2)
- bonus shares or cash dividend alternative
Operating costs:
- 0.54% net after fee income (3) (FY2017: 0.54%)
Minimal cash drag:
Primarily unlisted investments - 100% of investment portfolio
Demonstrate cash flow within underlying - Strong cash flow conversion across portfolio investments over any 3 year period
Going forward, shareholders are notified that in line with other listed investment companies, Brait will update the market on its NAV per share on a six monthly basis at interim and final reporting dates
Shareholder election: 26% elected to receive bonus shares, 43% elected to reinvest their cash dividend of R169m and subscribe for new shares; and the remaining 31% elected to receive their cash dividend of R121m
Percentages quoted are annualised based on operating expenses of R135 million and fee income of R15 million for the six months ended 30 September 2017.
Audited year ended 31 March 2017 | Unaudited six months 30 Sept 30 Sept 2016 2017 | Unaudited six months 30 Sept 30 Sept 2017 2016 | Audited year ended 31 March 2017 | ||||
R'm | R'm | R'm | ASSETS | Notes | EUR'm | EUR'm | EUR'm |
44 408 | 58 142 | 40 023 | Non-current assets | 2 499 | 3 767 | 3 100 | |
44 408 | 58 142 | 40 023 | Investments | 2 | 2 499 | 3 767 | 3 100 |
3 289 | 3 602 | 3 290 | Current assets | 205 | 233 | 230 | |
5 | 4 | 3 | Accounts receivable | - | - | - | |
3 284 | 3 598 | 3 287 | Cash and cash equivalents | 3 | 205 | 233 | 230 |
47 697 39 580 | 61 744 53 277 | 43 313 33 851 | Total assets EQUITY AND LIABILITIES Ordinary shareholders equity and reserves | 4 | 2 704 2 114 | 4 000 3 451 | 3 330 2 763 |
(FY2017: Operating expenses R401 million; fee income R62 million). Brait's average AUM for the six months ended 30 September 2017 is R45 billion (FY2017: R63 billion) Summary consolidated statement of financial position as at 30 September
8 065 | 8 366 | 9 200 | Non-current liabilities | 574 | 542 | 563 | |
5 396 | 5 630 | 5 883 | Convertible Bonds | 5 | 367 | 365 | 377 |
2 669 | 2 736 | 3 317 | Borrowings | 6 | 207 | 177 | 186 |
52 | 101 | 262 | Current liabilities | 16 | 7 | 4 | |
52 | 101 | 262 | Accounts payable and other liabilities | 16 | 7 | 4 | |
47 697 | 61 744 | 43 313 | Total equity and liabilities | 2 704 | 4 000 | 3 330 | |
520.6 | 521.0 | 525.6 | Ordinary shares in issue (m) | 525.6 | 521.0 | 520.6 | |
(14.6) | (13.9) | (17.5) | Treasury shares (m) | (17.5) | (13.9) | (14.6) | |
506.0 | 507.1 | 508.1 | Outstanding shares for NAV calculation (m) | 508.1 | 507.1 | 506.0 | |
7 815 | 10 506 | 6 662 | Net asset value per share (cents) | 416 | 681 | 546 |
Summary consolidated statement of comprehensive income for the six months ended 30 September
Audited year ended 31 March 2017 R'm | Unaudited six months 30 Sept 30 Sept 2016 2017 R'm R'm | Note | Unaudited six months 30 Sept 30 Sept 2017 2016 EUR'm EUR'm | Audited year ended 31 March 2017 EUR'm | ||
(15 085) | (3 915) | (7 957) | Investment losses | (530) | (240) | (978) |
244 | 122 | 125 | Interest income | 8 | 7 | 16 |
409 | 80 | 71 | Dividend income | 5 | 5 | 27 |
62 | 32 | 15 | Fee income | 1 | 2 | 4 |
(319) | (264) | 211 | Foreign exchange gains/(losses) | 14 | (16) | (21) |
(401) | (228) | (135) | Operating expenses | (9) | (14) | (26) |
(76) | (66) | - | Other expenses | - | (4) | (5) |
(659) | (274) | (317) | Finance costs | (21) | (17) | (43) |
(29) | (7) | 7 | Taxation | - | - | (2) |
(15 854) (12 879) | (4 520) (10 565) | (7 980) 2 540 | Loss for the period Other comprehensive income Translation adjustments | (532) (98) | (277) (337) | (1 028) (266) |
(28 733) | (15 085) | (5 440) | Comprehensive loss for the period | (630) | (614) | (1 294) |
(3 119) | (887) | (1 577) | Loss and Headline loss per share (cents) - basic 7 | (105) | (54) | (202) |
(2 809) | (785) | (1 421) | Loss and Headline loss per share (cents) - diluted 7 | (95) | (48) | (182) |
Summary consolidated statement of changes in equity for the six months ended 30 September
Audited year ended 31 March | Unaudited six months 30 Sept 30 Sept | 30 | Unaudited six months Sept 30 Sept | Audited year ended 31 March | ||
2017 R'm | 2016 2017 R'm R'm | Note | 2017 2016 EUR'm EUR'm | 2017 EUR'm | ||
69 872 | 69 872 | 39 580 Ordinary shareholders' balance at beginning of period | 2 763 | 4 164 | 4 164 | |
(15 854) | (4 520) | (7 980) Loss for the period | (532) | (277) | (1 028) | |
(12 879) | (10 565) | 2 540 Translation adjustments | (98) | (337) | (266) | |
(930) | (881) | (168) Net purchase of treasury | shares | (11) | (57) | (65) |
- | - | 169 Cash dividend reinvestment 4 | 11 | - | - | |
(629) | (629) | (290) Cash dividend paid | 4 | (19) | (42) | (42) |
39 580 | 53 277 | 33 851 Ordinary shareholders' balance at end of period | 2 114 | 3 451 | 2 763 |
Summary consolidated statement of cash flows for the six months ended 30 September
Audited year ended 31 March 2017 R'm | Unaudited six months 30 Sept 30 Sept 2016 2017 R'm R'm | Note | Unaudited six months 30 Sept 30 Sept 2017 2016 EUR'm EUR'm | Audited year ended 31 March 2017 EUR'm | ||
300 | 7 | 28 | Cash flows from operating activities Investment proceeds received | 2 | - | 21 |
56 | 30 | 13 | Fees received | 1 | 2 | 4 |
65 | 41 | 24 | Interest received | 2 | 3 | 4 |
266 | - | - | Dividends received | - | - | 18 |
(401) | (225) | (140) | Operating expenses paid | (9) | (15) | (26) |
(59) | - | (10) | Other expenses paid | (1) | - | (4) |
(35) | (11) | - | Taxation paid | - | (1) | (2) |
192 | (158) | (85) | Operating cash flow before investments | (5) | (11) | 15 |
(190) | (92) | (226) | Purchase of investments | (15) | (6) | (12) |
2 | (250) | (311) | Net cash (used in)/from operating activities | (20) | (17) | 3 |
1 491 | 1 550 | 500 | Net drawdown of borrowings | 33 | 101 | 85 |
(391) | (86) | (109) | Finance costs paid | (7) | (6) | (24) |
(710) | (661) | (168) | Net purchase of treasury shares | (11) | (43) | (42) |
(629) | (629) | (290) | Cash dividend paid | (19) | (41) | (42) |
- | - | 169 | Cash dividend reinvestment | 11 | - | - |
(239) | 174 | 102 | Net cash from/(used in) financing activities | 7 | 11 | (23) |
(237) | (76) | (209) | Net decrease in cash and cash equivalents | (13) | (6) | (20) |
(833) | (680) | 212 | Effects of exchange rate changes on cash and cash equivalents | (12) | (21) | (10) |
4 354 | 4 354 | 3 284 | Cash and cash equivalents at beginning of period | 230 | 260 | 260 |
3 284 | 3 598 | 3 287 | Cash and cash equivalents at end of period 3 | 205 | 233 | 230 |
Notes to the summary consolidated financial statements for the six months ended 30 September
1 ACCOUNTING POLICIES
1.1 Basis for preparation
The financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, on the going concern principle, using the historical cost basis, except where otherwise indicated. The summarised financial statements are presented in accordance with IAS 34: Interim Financial Reporting and in accordance with the framework concepts, measurement and recognition requirements of IFRS. The accounting policies and methods of computation are consistent with those applied in the Group annual financial statements for the year ended 31 March 2017. The Group has only one operating segment being that of an investment holding company.
The Group's financial statements are prepared using both the Euro (EUR) and SA Rand (R/ZAR) as its presentation currencies. The Group's subsidiaries have one of three functional currencies: Pound Sterling (GBP), SA Rand or US Dollar (USD/US$). The holding company, Brait SE, and its main consolidated subsidiaries use GBP as their functional currency. The financial statements have been prepared using the following exchange rates:
30 September 2017 | 31 March 2017 | 30 September | 2016 | |||
Closing | Average | Closing | Average | Closing | Average | |
USD/ZAR | 13.5655 | 13.1902 | 13.4247 | 14.0513 | 13.7268 | 14.5313 |
GBP/ZAR | 18.1636 | 17.0727 | 16.8674 | 18.4171 | 17.8155 | 19.9926 |
EUR/ZAR | 16.0183 | 15.0119 | 14.3232 | 15.4319 | 15.4336 | 16.3167 |
USD/EUR | 0.8469 | 0.8786 | 0.9373 | 0.9105 | 0.8894 | 0.8906 |
GBP/EUR | 1.1339 | 1.1373 | 1.1776 | 1.1934 | 1.1543 | 1.2253 |
INVESTMENTS
The Group designates the majority of its financial asset investments as at FVTPL as the Group is managed on a fair value basis, with any resultant gain or loss recognised in investment gains/losses. Fair Value is determined in accordance with IFRS 13.
Statement of financial position items carried at fair value include investments in equity instruments and shareholder funding instruments. The Group applies a number of methodologies to determine and assess the reasonableness of the fair value, which may include the following:
Earnings multiple
Recent transaction prices
Net asset value
Price to book multiple
Listed investments are held at recent quoted transaction prices. Where the listed investment is either thinly traded and/or the market is inactive, the valuation applied to determine the carrying value is based on the applicable unlisted investment methodology set out below.
The primary valuation model utilised for valuing unlisted portfolio investments is the maintainable earnings multiple model.
Maintainable earnings are derived with reference to the mix of prior year audited and latest available current year forecast EBITDA per the portfolio company, adjusted for any non-recurring income/expenditure. As the year progresses, so the weighting is increased towards the portfolio
company's forecast.
The Directors decide on an appropriate group of comparable quoted companies from which to base the EV/EBITDA multiple. The three year trailing average multiple of the comparable quoted companies, is adjusted for points of difference, where required, to the portfolio company being valued.
The peer average spot multiple at reporting date is also considered. The equity valuation takes consideration of the portfolio company's net debt/cash on hand as per its latest available financial results. Further valuation information can be obtained from the 30 September 2017 investor presentation
on the Group's website, www.brait.com.
31 March | 30 Sept | 30 Sept | 30 Sept | 30 Sept | 31 March | |
2017 | 2016 | 2017 | 2017 | 2016 | 2017 | |
R'm | R'm | R'm | EUR'm | EUR'm | EUR'm | |
44 408 | 58 142 | 40 023 | The Group's porfolio of investments | 2 499 | 3 767 | 3 100 |
15 516 | 16 107 | 17 726 | Virgin Active | 1 107 | 1 044 | 1 083 |
12 395 | 13 485 | 12 030 | Premier | 751 | 874 | 865 |
7 367 | 7 660 | 8 511 | Iceland Foods | 531 | 496 | 514 |
7 066 | 18 726 | - | New Look | - | 1 213 | 493 |
2 064 | 2 164 | 1 756 | Other investments | 110 | 140 | 145 |
Valuation metrics 30 September 2017 30 September 2016 31 March 2017
3rd Party 3rd Party 3rd Party
Virgin Active (GBP'm) | EBITDA 139 | Multiple 11.4x | Net Debt 336 | EBITDA 135 | Multiple 11.4x | Net Debt 370 | EBITDA 140 | Multiple 11.4x | Net Debt 411 |
Premier (R'm) | 1 170 | 12.4x | 1 768 | 1 211 | 13.2x | 1 508 | 1 140 | 13.2x | 1 850 |
Iceland Foods (GBP'm) | 163 | 9.0x | 687 | 153 | 9.4x | 688 | 160 | 9.0x | 675 |
New Look (GBP'm) | Note 1 | 203 | 11.3x | 1 100 | 155 | 10.3x | 1 136 | ||
Other investments | varied | varied | varied |
*Note 1 Until such time as its turnaround strategy has taken shape, New Look is valued at Nil
Fair Value Hierarchy
IFRS 13 provides a hierarchy that classifies inputs used to determine fair value. Investments measured and reported at fair value are classified and disclosed in one of the following categories:
Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 Inputs for the assets or liability that are not based on observable market data
17 | R'm 726 | 30 September 2017 Virgin Active | EUR'm 1 107 | |
9 | 010 | Premier | 562 | |
8 | 511 | Iceland Foods | 531 | |
1 | 514 | Other investments | 95 | |
36 | 761 | Investments at fair value | 2 295 | |
3 | 020 | Premier shareholding funding | 189 | |
242 | Other investments shareholder funding | 15 | ||
3 | 262 | Investments at amortised cost | 204 | |
40 | 023 | Total investments | 2 499 | |
Audited year ended | Unaudited six months | Unaudited six months | Audited year ended |
There are no financial assets that are categorised as Level 1 and Level 2 and no transfers between levels in the current or prior year. All Level 3 investments have been valued using a maintainable earnings multiple model.
31 March 2017 R'm | 30 Sept 2016 R'm | 30 Sept 2017 R'm | 30 Sept 2017 EUR'm | 30 Sept 2016 EUR'm | 31 March 2017 EUR'm | |||
3 284 | 3 598 | 3 287 | 3. | CASH AND CASH EQUIVALENTS Balances with banks | 205 | 233 | 230 | |
196 | 171 | 270 | - ZAR cash | 17 | 11 | 14 | ||
77 | 78 | 96 | - USD cash | 6 | 5 | 5 | ||
3 011 | 3 349 | 2 921 | - GBP cash | 182 | 217 | 211 | ||
39 580 | 53 277 | 33 851 | 4. | ORDINARY SHAREHOLDERS' EQUITY AND RESERVES Share Capital and Premium Authorised share capital 1 500 000 000 at par value of EUR0.22 per share Issued share capital 31 March 2017 | 521 012 174 | 2 114 | 3 451 | 2 763 |
Bonus share issue | 1 665 192 (1) | |||||||
Cash dividend reinvestment | 2 921 849 (2) |
Brait SE published this content on 15 November 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 15 November 2017 06:09:01 UTC.
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