Investment holding group Brait’s liquidity and capital structure had been strengthened in the year to March 31 and it would continue to prepare the exit of its investments, with a possible listing of Virgin Active likely to be next, chairperson Richard Nelson said in its annual report released on Friday.
“Since the February 2020 change in strategy to unlock value through the realisation and unbundling of portfolio companies, Brait has realised cumulative disposal proceeds of R7.8 billion. The board … remains focused on positioning the remaining assets for exit, with the most likely outcome being an unbundling of the Virgin Active business once it is in a position to be listed,” he said.
Virgin Active had delivered a strong operating performance in the past six months of the year to March 31 across all key territories, said Nelson.
Management implemented a new operating model and capital structure, positioning Virgin Active as a global wellness company.
The Virgin Active product suite included more than 2 700 personal trainers globally, delivering roughly.2.3 million sessions a year and more than 1.6 million group exercise attendances a month across the global estate
Debt terms for the international business were extended to June 2027 with £50 million (R1.2bn) of equity injected by shareholders during May 2023 to fund growth initiatives.
In the past financial year, Brait had received R4.9bn proceeds from the March 2023 listing of Premier on the JSE, as well as R400 million received from the realisation of Consol.
Brait significantly strengthened its balance sheet, with available liquidity, post Brait’s pro rata equity subscription into Virgin Active in May, of R1.4bn.
Premier delivered a strong operational performance with earnings before interest tax, depreciation and amortisation (Ebitda) growth of 16% for its year to March 31, driven by the MillBake business.
UK clothing store chain New Look’s Ebitda grew 68% to £42.2m for its year to March 31, driven by increased footfall and cost management at its distribution centre and head office.
Brait’s reported net asset value (NAV) per share at March 31, 2023, was R7.06, lower than R8.37 in 2022.
Since March 1, 2020, Ethos Private Equity (EPE) had been Brait’s adviser. This contract was for three years, with an annual renewal thereafter at an initial cost of R100m per year with inflation-linked increases.
The Rohatyn Group (TRG) acquired EPE from April 1, resulting in TRG replacing EPE as Brait’s adviser. Brait’e board approved a one-year extension to March 31, 2024, of the contract taken over by TRG, at R65m, with existing incentives in place to ensure alignment with investors in executing Brait’s unlock value strategy.
The board subsequently approved a further one-year extension of the contract with TRG at a fee of R50m, which is subject to a three months notice period.
In a trading update for the two months to end May, Brait also said it had seen a solid start to the new financial year with its performance in line with targets.
There was a softening of raw material input cost inflation, which was expected to lower revenue growth compared to the prior year.
It said load shedding continued to pose multiple operational challenges while higher interest rates were driving increased interest expense, but this was manageable.
Looking ahead, Premier intended to declare a maiden dividend on the back of the financial year 2024 financial results.
Brait’s share price closed 3.87% higher at R3.22 on Friday. The price traded at R4.09 on the same day a year ago.
BUSINESS REPORT