Investment group Brait’s net asset value per share (NAVPS) fell 16% to R7.06 for the year to March 31 due mainly to the lower Premier Group valuation as a result of its listing and the impact of the rand’s devaluation on the UK pound denominated convertible bonds.
Brait repaid its R3 billion revolving credit facility during the year, resulting in R360 million of interest savings per year. Brait’s main investments are in Premier, Virgin Active and the New Look fashion store chain in the UK.
Premier’s strong operational performance continued through the 2023 financial year, with earnings before interest tax depreciation and amortisation (Ebitda) growth of 16%, largely driven by the Millbake business.
The listing of Premier in March raised R3.6bn for Brait, in addition to a R900m shareholder distribution before the listing.
Premier continued to invest in its asset base, which gave the bread business a strong competitive advantage with market share growth in the inland region.
Virgin Active also delivered a strong operating performance over the last six months, with active memberships growing by 14% to 963 000 over 12 months and average yield increasing by 4% year-on-year.
A new operating model and structure bedded down by the management team was positioning Virgin Active as a global wellness company, Brait said.
The VA International debt terms were extended to June 2027, with £50m (R1bn) of equity injected by shareholders to fund growth initiatives.
Despite the challenges in the UK fashion retail market, New Look reported a solid operating performance, growing Ebitda 68%, driven by increased footfall and cost management at its distribution centre and head office.
New Look’s revenue was up 2.3%. Retail revenue was up 4.7% to £632m, driven by improved footfall. The online performance was down 2.9%, although this was anticipated, and it performed in line with budget.
There was average selling price improvement through pricing discipline and tight stock management.
This trend was offset by the need to clear stock through promotions and discounts over the Christmas period to ensure a clean seasonal exit.
Ebitda growth at New Look was also driven by optimising costs, with total costs up 2%. Excluding furlough support (£1.9m) and rates relief (£19.6m) received in the 2022 year, total costs fell 2.9%
Meanwhile Ethos Capital, which is invested in Brait and which also has exposure to a diversified portfolio of unlisted private equity type investments, said its NAVPS increased 1.2% in the quarter to March 31, 2023 to R8.61. For the nine-months to March 31, NAVPS increased by 1.4%.
The Rohatyn Group (TRG) acquired Ethos from April 1, 2023, resulting in TRG replacing Ethos as Ethos Capital’s contracted investment advisor and administration services provider.
All key members of the Ethos team responsible for providing the contracted investment advisory and administration services to Ethos Capital remained in their roles. EPE’s share price fell 3.85% to R5 on the JSE yesterday afternoon.
Year-to-date, the Ethos Capital’s unlisted portfolio achieved a return of 10%, largely attributable to strong valuation gains in Optasia, Gammatek and Synerlytic.
The Ethos Capital listed portfolio was impacted by significant decreases in share price movements in Brait (-11%) and MTN Zakhele Futhi (-17%). The price of the Brait exchangeable bonds increased by 9% over the quarter to March 31.
BUSINESS REPORT