Slide 1: Interim Results for the Six Months Ended 31 August 2020
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2020 DECEMBER 2020
Slide 2: Introduction
INTRODUCTION VUNANI LIMITED
Slide 3: Overview of the Half Year
OVERVIEW OF THE HALF YEAR • The Vunani Limited Group had a relatively good six months under the circumstances. • The economy was already battling with a number of challenges. • Manifested in relatively weak financial markets. • The group was able to meet its group revenue budgets, except for the ass
Slide 4: Abridged Financial Performance
ABRIDGED FINANCIAL PERFORMANCE • The graphic highlighting key metrics shows a business that is has had its best half year in 3 years. • Revenue, excluding the insurance business was up 6% • New acquisitions added a further R121m • Group consolidated profit was up significantly (90%) compared to the
Slide 5: Group Structure and Segmental Overview
GROUP STRUCTURE AND SEGMENTAL OVERVIEW
Slide 6: Group Structure
GROUP STRUCTURE Asset Fund Investment Insurance Private equity administration management banking Mission: To be Africa’s foremost boutique financial services group. 6
Slide 7: Geographical Footprint
GEOGRAPHICAL FOOTPRINT Mission: To be Africa’s foremost boutique financial services group. Ghana Botswana Zimbabwe South Africa Zambia Democratic Republic of Congo Malawi eSwatini 7
Slide 8: Segmental Performance
SEGMENTAL PERFORMANCE
Slide 9: Group Structure
GROUP STRUCTURE Vunani Limited Group Financial Services Private Equity Coal RSA Fund Institutional Resources Boron Management Botswana Retail Other Beneficiary Property Development Admin Asset Management Insurance Fintech Various eSwatini Corporate Gaming Sports Betting Finance Zimbabwe Stockbroking
Slide 10: Segmental – Financial Services
SEGMENTAL – FINANCIAL SERVICES Financial Fund management Top 3 fastest growing fund managers over the last two years AUM was R45.1 bn as at 31 October 2020. Services SA (BEEconomics Survey) The strategy to aggressively increase exposure to managing retail portfolios is paying off. R2.9 bn in new bus
Slide 11: Segmental – Financial Services
SEGMENTAL – FINANCIAL SERVICES Financial Asset Administration Assets Under Administration growth to R6,9bn. Market correction dropped AUA to R6,3bn in the first quarter, but Services Decent new business inflows. has since rebounded close to R7bn. Revenue up 5% to R69.9m and EBIT of R15,2m (2019; R17
Slide 12: Segmental – Financial Services
SEGMENTAL – FINANCIAL SERVICES Financial Stockbroking and capital Vunani Securities business continues to perform well after the The business has started he year relatively well despite of tough and Services markets restructure completed last year. volatile markets (VS & VCM) The bond desk is experi
Slide 13: Segmental – Private Equity
SEGMENTAL – PRIVATE EQUITY Private Equity Resources Coal COVID-19 resulted in the business having to close during April, but subsequently reopened, producing decent June & Coal prices have begun a recovery over the last few weeks which July results, as operations picked up. has resulted in increasin
Slide 14: Segmental – Private Equity
SEGMENTAL – PRIVATE EQUITY Private Equity Other Commodities The Agri commodities and Boron divisions have shown good The outlook for the Boron and Agri divisions is positive resilience during the first half of the 2021 financial year. considering that as industries they are considered necessities an
Slide 15: Segmental – Private Equity
SEGMENTAL – PRIVATE EQUITY Private Vunani Properties The properties team have secured a few development Funding market has become very tight on the back of COVID 19. Equities opportunities which are at various stages and subject to capital raising (Argent House, Mandulo Retail, Manzini Mall). Retail
Slide 16: Segmental – Private Equity
SEGMENTAL – PRIVATE EQUITY Private Equity Other African Businesses These are predominantly financial services businesses in other African countries and the sports betting investment Malawi The Alliance Capital business is a broking, advisory, Malawi microlending, insurance and pension fund managemen
Slide 17: Segmental – Private Equity
SEGMENTAL – PRIVATE EQUITY Private Equity Other African Sports Betting Sports Betting Businesses Vunani has invested in several sport betting operations in COVID 19 and the curtailment of sporting activities had an conjunction with Betpawa in Zambia, Zimbabwe and Ghana. impact on the sports betting
Slide 18: Segmental – Private Equity
SEGMENTAL – PRIVATE EQUITY Private Equity Other African Sports Betting Sports Betting Businesses Vunani has invested in several sport betting operations in COVID 19 and the curtailment of sporting activities had an conjunction with Betpawa in Zambia, Zimbabwe and Ghana. impact on the sports betting
Slide 19: Segmental – Private Equity
SEGMENTAL – PRIVATE EQUITY Private Other investments These are largely investment holdings that are either too Equity small for the group to consolidate, at an early stage of investment or are considered non-strategic, notwithstanding their significance. Fintech Fund Some of the businesses are findi
Slide 20: Financial Performance
FINANCIAL PERFORMANCE
Slide 21: Key Ratios
KEY RATIOS • 82% increase in EPS to 19.7c. • 75% increase in ROE to 6.11%. • 49% improvement in EBITDA to R57.5million. • 6% improvement in NAV/share to 321.2c. • 24% improvement in NTAV/share to 122.3c. • Current ratio declined marginally to 1.21 from 1.28. Mission: To be Africa’s foremost boutique
Slide 22: Profit After Tax
PROFIT AFTER TAX 2019 Profit contribution 35% 2020 Profit contribution 70% 30% 60% 57% 29% 25% 25% 50% 21% 20% 40% 16% 15% 30% 25% 23% 13% 21% 10% 20% 5% 10% 2% 0% 0% 0% 1 1 -5% -5% -10% -12% -13% -10% -20% Fund management Asset administration Fund management Asset administration Insurance Advisory
Slide 23: Revenue Comparison
REVENUE COMPARISON 2020 2019 REVENUE REVENUE 4% 1% 2% 19% 24% 8% 39% 3% 6% 37% 9% 23% 23% Commodities trading Other investments Advisory services Institutional securities broking Commodities trading Other investments Insurance Fund management Advisory services Institutional securities broking Asset
Slide 24: Revenue Comparison
REVENUE COMPARISON Revenue contribution excluding insurance 350 000 300 000 250 000 200 000 150 000 100 000 50 000 - Fund management Asset Advisory services Institutional Other investments Insurance Commodities TOTAL administration securities broking trading 2020 2020 - Excluding insurance Mission:
Slide 25: Statement of Comprehensive Income
STATEMENT OF COMPREHENSIVE INCOME ➢ Other income • Includes reinsurance recoveries of R5.8 million and other non- operational revenue earned by the group. ➢ Investment income • Insurance related investments: R1.9m. This decreased due to the impact of COVID-19 on our coal related investments ➢ Fair v
Slide 26: Statement of Comprehensive Income
STATEMENT OF COMPREHENSIVE INCOME ➢ Commodities trading related costs • Down by 57% due to decreased sales volume as a result of the impact of COVID-19 ➢ Operating expenses • Increased by 82% compared to Aug ’19: • Impact of consolidating Oracle and VFM Botswana which were acquired in the last quart
Slide 27: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION August 2020 Net Asset Value February 2020 Net Asset Value 10% 10% 42% 41% 27% 28% 0% 0% 1% 1% 19% 1% 19% 1% Fund Management Fund Management Asset administration Asset administration Insurance Insurance Advisory Advisory Institutional securities broking Institutional s
Slide 28: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION ➢Insurance related investments of R428 273 (Feb 20: R286 589) increased as a result of asset allocations strategies. ➢Cash and cash equivalents • Decrease as a result of acquisition of insurance related investments. ➢Other financial liabilities • Decreased by R13.2m a
Slide 29: Vunani Limited Unbundling - Reason
VUNANI LIMITED UNBUNDLING - REASON ➢ Market cap is at significant discount to underlying enterprise value @ 250 cps = R400m ➢ Difficult to read group AFS as a result of the combined financial services and private equity assets ➢ Coal and commodity trading volatility impacts results from year to year
Slide 30: Vunani Limited Unbundling – Proposed Solution
VUNANI LIMITED UNBUNDLING – PROPOSED SOLUTION ➢Split the group by unbundling of the private equity assets to shareholders ➢Listed company (ex private equity) then remains focused on financial services allowing investors to value this business on its earnings and market value should reflect underlyin
Slide 31: Financial Performance if Unbundling Accounted For
FINANCIAL PERFORMANCE IF UNBUNDLING ACCOUNTED FOR Vunani Limited Vunani Capital Total Partners R’000 R’000 R’000 Revenue 271 836 16 355 288 191 EBITDA 55 580 2 007 57 587 PAT 30 180 5 791 35 971 EPS 18.8c 0.9c 19.7c NAV 341 101 250 094 591 195 Intrinsic NAV 643 116 260 156 903 272 Mission: To be Afr
Slide 32: Status of Unbundling
STATUS OF UNBUNDLING ➢A circular detailing the impact of the unbundling was distributed to shareholders on 30 November. The timelines of the unbundling are detailed below: Step Date Posting of circular to shareholders 1 December 2020 General meeting to vote on proposed unbundling 11 January 2021 Res
Slide 33: Dividend Declaration
DIVIDEND DECLARATION ➢Due to the uncertainty regarding the impact of COVID-19 the group did not declare a dividend at year-end. ➢The group had a strong performance for the first six months of the year despite the tough operating environment. As such the board declared gross interim dividend of 5c pe
Slide 34: Prospects for the Year
PROSPECTS FOR THE YEAR
Slide 35: COVID-19 Response
COVID-19 RESPONSE • COVID Impact on the business • The COVID-19 pandemic continues to be a reality that the business needs to deal with on an ongoing basis. • Fortunately the majority of the businesses have not been to negatively impacted by the pandemic. • The various businesses have adopted admira
Slide 36: Prospects
PROSPECTS • The stage of growth and the business conditions require that we introspect and tighten up the business, provide focus in the things we do and become increasingly attentive to the generation of returns for our shareholders. • The proposed restructuring is the first step, but an additional
Slide 37: Thank You
VUNANI THANK YOU ~_
Slide 38: Contact Us
JOHANNESBURG Vunani Capital Vunani House, Vunani Office Park 151 Katherine Street, Sandown Sandton 2196 Office: +27 (0) 11 263 9500 Email: info@vunanilimited.co.za CAPE TOWN Vunani Capital No. 9 Long Street– 3rd Floor Cnr Long & Riebeek Streets Cape Town, South Africa 8001 Telephone: +27 (0) 21 481