Slide 1: Reviewed Results for the Year Ended 28 February 2019
REVIEWED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2019 ETHAN DUBE, CEO
Slide 2: Table of Contents
TABLE OF CONTENTS ❑Highlights of the year 3 ❑Group structure and segmental overview 7 ❑Financial performance 20 ❑Strategy & prospects 27 Mission: To be Africa’s foremost boutique financial services group. 2
Slide 3: Highlights of the Year
HIGHLIGHTS OF THE YEAR
Slide 4: Highlights of the Year: Strategies
HIGHLIGHTS OF THE YEAR: STRATEGIES 1. Significant increase in assets under management. 2. Significant increase in assets under administration. 3. Marked increase in advisory services deal flow. 4. Commodities trading revenue almost doubled. 5. Entered insurance space via acquisition of MMI’s insuran
Slide 5: Highlights of the Year: Financial Results
HIGHLIGHTS OF THE YEAR: FINANCIAL RESULTS ➢ +21% Increase in revenue from continuing operations to R425.3 million… ➢ +98% Increase in net profit to R90.3 million! ➢ +117% Increase in HEPS, resulting in a ➢ +111% increase in EPS, culminating in a ➢ +19.35% Growth in dividend /share to 7.4c (6.2c in 2
Slide 6: Highlights of the Year: Financial Results
HIGHLIGHTS OF THE YEAR: FINANCIAL RESULTS 2019 Revenue (R'000) 42001 0 87155 141302 127362 9488 18021 Fund management Asset administration Advisory services Other investments Commodities trading Institutional securities broking Private wealth and investments ➢ Commodities trading the most significan
Slide 7: Group Structure and Segmental Overview
GROUP STRUCTURE AND SEGMENTAL OVERVIEW
Slide 8: Group Structure
GROUP STRUCTURE Asset Fund Investment Private equity Property administration management banking Mission: To be Africa’s foremost boutique financial services group. 8
Slide 9: Geographical Footprint
GEOGRAPHICAL FOOTPRINT Mission: To be Africa’s foremost boutique financial services group. Ghana Lesotho Zimbabwe South Africa Zambia Democratic Republic of Congo Malawi eSwatini 9
Slide 10: Segmental Developments
SEGMENTAL DEVELOPMENTS ➢ Asset administration and fund management two key business silo’s by generating revenue of R127million and R87 million, respectively…. ➢ Revenue from commodities trading increased significantly to R141 million. ➢ Private wealth business sold in 2018, hence no contribution in
Slide 11: Segmental Developments
SEGMENTAL DEVELOPMENTS ➢ Significant increase in revenue from commodities trading… ➢ Asset administration a consistent revenue stream; and ➢ Healthy growth in revenue from fund management. ➢ Commodities trading the biggest contributor to revenue… ➢ Followed by asset administration and fund managemen
Slide 12: Segmental Developments
SEGMENTAL DEVELOPMENTS ➢ Fair value adjustments on listed and unlisted investments bolstered “other investments” revenue… ➢ Asset administration, commodities trading, fund management and advisory services also showed healthy growth in profit. ➢ Securities broking struggled… ➢ Segmental contributions
Slide 13: Segmental Developments: Fund Management
SEGMENTAL DEVELOPMENTS FUND MANAGEMENT ➢Institutional fund management focus. ➢Investments included in this segment: • Vunani Fund Managers: R27.6b AUM at 28 Feb 2019 (Feb ‘18: R20.9b). • Purpose Vunani (Zimbabwe): R397m AUM at 28 Feb 2019 (Feb ‘18: R290.4m). • Alliance Capital (Malawi): R373.5m AUM
Slide 14: Segmental Developments: Asset Administration
SEGMENTAL DEVELOPMENTS ASSET ADMINISTRATION ➢ Fairheads made good progress in winning good quality mandates. ➢ Assets under administration of R6.3b (28 Feb 2018:R6.2b). ➢ Segment results • Revenue of R127.4 m (Feb ‘18: R124.8m). • Segment profit of R13.4m (Feb ‘18: R6.7m). Mission: To be Africa’s fo
Slide 15: Segmental Developments: Investment Banking
SEGMENTAL DEVELOPMENTS INVESTMENT BANKING Institutional securities Advisory broking services Equities Vunani Securities JSE Sponsor M&A Fixed Interest Bond Origination Vunani Capital Markets Mission: To be Africa’s foremost boutique financial services group. 15
Slide 16: Segmental Developments: Investment Banking
SEGMENTAL DEVELOPMENTS INVESTMENT BANKING ➢ Institutional securities broking experienced difficult trading conditions due to low trading volumes and margin compression. • Revenue of R42m (Feb ‘18: R63.6m) • Segment loss of R7.2m (Feb ‘18: Profit R1.3m) ➢ Revenue from advisory services rebounded from
Slide 17: Segmental Developments: Private Equity
SEGMENTAL DEVELOPMENTS PRIVATE EQUITY Other Commodity investments broking Investments Commodity broking Listed and unlisted Coal Private equity Boron Mining investments Mission: To be Africa’s foremost boutique financial services group. 17
Slide 18: Segmental Developments: Private Equity
SEGMENTAL DEVELOPMENTS PRIVATE EQUITY ➢ Focus on themes offering growth opportunities in the foreseeable future. ➢ Private equity initiatives explored with well established partners including Anglo American and South 32. ➢ Segment results: • Other investments • Segment profit R61.9m (Feb ‘18: R29.8m
Slide 19: Mining
MINING Investment Location Shareholding Partner Economics 1. Black wattle Colliery • Middelburg • 15%- debt free • Bisichi PLC • Vunani earns a monthly (“BWC”) • 22.5%- vendor management fee loan • A fee for securing the Quatro allocation at R.B.C.T • Dividends • BWC is a junior coal miner with its
Slide 20: Mining
MINING Investment Location Shareholding Partner Economics 4. Coal processing • Anglo Coal • 75% • Management (25%) • Processing and trading of 30 000 tons of coal per month • In October 2016 Vunani Resources secured the right to retreat/process/mine a 2 million ton coal discard dump on an Anglo Coal
Slide 21: Segmental Developments: Property
SEGMENTAL DEVELOPMENTS PROPERTY ➢ Focus is on development as well as building property funds. Mission: To be Africa’s foremost boutique financial services group. 21
Slide 22: Financial Performance
FINANCIAL PERFORMANCE
Slide 23: Revenue
REVENUE Mission: To be Africa’s foremost boutique financial services group. 23
Slide 24: Profit After Tax
PROFIT AFTER TAX Mission: To be Africa’s foremost boutique financial services group. 24
Slide 25: Key Ratios
KEY RATIOS • 84% improvement in ROE to 18.9%. • 42.6% improvement in net profit margin to 24.6% (from 17.2%). • 66.6% improvement in EBITDA to R131.1million. • 20.1% improvement in NAV/share to 291c. • 50% improvement in net tangible asset value/share to 157.4c. • Current ratio improved to 1.18 from
Slide 26: Statement of Comprehensive Income
STATEMENT OF COMPREHENSIVE INCOME ➢ Other income • Includes non-operational revenue earned by the group. ➢ Investment income • JSE: R0.6m. • Blackwattle: R9.3m. • Gidani (once off dividend): R1.1m. ➢ Fair value adjustments and impairments • Favourable fair value adjustments of R73.2m (Feb ‘18: R43.7
Slide 27: Statement of Comprehensive Income
STATEMENT OF COMPREHENSIVE INCOME ➢ Equity accounted earnings ➢ Increased to R6.1m from negative R10.8m at Feb’18 • Includes Vunani’s of post-tax earnings for Alliance, Isilo Investments, Betbio Zambia, Phakamani and our investment in Workforce ➢ Commodities trading related costs • Up by 91.6% due t
Slide 28: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION ➢ Intangible assets • Intangible assets arose on the consolidation of Fairheads. • Decreased by R11.2m as a result of the amortisation of the asset. ➢ Equity • 3.7 m VL shares cancelled as a result of BSI share swop. VL Shares in issue 161.2m Feb ‘19 (164.9m on 1 Mar.
Slide 29: Strategy and Prospects
VUNANI LIMITED STRATEGY ROSPECTS
Slide 30: Strategy & Prospects
STRATEGY & PROSPECTS ➢ Improve existing businesses and maximise on synergies within the group to improve profitability. ➢ Broaden the product offering on the existing platform. ➢ Identify significant acquisition opportunities for the group in financial services. ➢ Increase share incentive scheme to
Slide 31: Thank You
VUNANI THANK YOU ~_
Slide 32: 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