Brimstone Investment Corporation Limited Class N · JSE:BRN
Brimstone Investment Corporation Limited Class N — FY2022 Earnings Presentation
40 slides from Brimstone Investment Corporation Limited Class N's earnings presentation, December 2022
Slide 1: Financial Results for the year ended 31 December 2022
Financial Results for the year ended 31 December 2022
Slide 2: Overview
ei BRIMSTONE INVESTMENT CORPORATION LIMITED OVERVIEW
Slide 3: Philosophy
Philosophy Empowerment Positive Social Profitability Impact
Slide 4: Our group
Our group Food Healthcare Property Financial Services RE AFRICA Restricted BEE structures Futhi Other
Slide 5: Group & Associated Brands
Group & Associated Brands THE HEART OF DAIRY GOODNESS MG KAILIS GROUP DAYBROOK Bs 4 J : 6 We Dstyv MEDIAERRANEAN MutriCnoice lolicactes C; MILPARK SD. iccorporctin { P EDUCATION fo 2 S A Professional © & ‘caeconnect 5 A : Chelsea Pies Accounting Selecta Sea Products INVESTMENT CO: Profitability. Fim
Slide 6: Some of our products
Some of our products
Slide 7: Unclaimed dividends project
Unclaimed dividends project • During 2022, Brimstone embarked on a project to track down shareholders whose records were not up to date and who are owed unclaimed dividends • While there is no obligation to locate these shareholders, Brimstone considers it a moral obligation to locate these sharehol
Slide 8: Contribution to Intrinsic Gross Asset Value by sector
Contribution to Intrinsic Gross Asset Value by sector Healthcare Cash Other 1% 2% 2% Restricted BEE 11% Financial Services & Property 12% 31 Dec 2022 Food 72%
Slide 9: Contribution to Intrinsic Gross Asset Value Listed, Unlisted, and Cash
Contribution to Intrinsic Gross Asset Value Listed, Unlisted, and Cash 100 90 80 70 60 % Listed 50 Unlisted Cash 40 30 20 10 0 Dec 20 Dec 21 Dec 22
Slide 10: Salient Features
Salient Features ▪ Revenue* R6.2bn (2021: R5.1bn) ▪ Operating profit* R509.6m (2021: R712.0m) ▪ Profit for the year R324.5m (2021: R920.9m) ▪ EPS 76.6 cents (2021: 292.3 cents) ▪ HEPS 69.0 cents (2021: 298.9 cents) ▪ Total assets R11.7bn (2021: R10.5bn) ▪ Dividend declared 33cps (2021: 30cps) *Inclu
Slide 11: Underlying Investment Performance
UNDERLYING INVESTMENT PERFORMANCE
Slide 12: Food
BRIMSTONE INVESTMENT CORPORATION LIMITED ed Profitability, Empow raitive Social Impact.
Slide 13: Sea Harvest (53.4%)
Sea Harvest (53.4%) ▪ Accounts for 34% of Brimstone’s intrinsic gross asset value ▪ Hake volume losses due to FRAP and reduction in TAC ▪ Higher fuel and logistics costs ▪ EBIT R500m (2021: R670m) ▪ Australian acquisition of MG Kailis completed on 23 May 2022 ▪ Dividend receivable 38cps – R60.6m (11
Slide 14: Oceana (25.1%)
Oceana (25.1%) ▪ Accounts for 37% of Brimstone’s intrinsic gross asset value ▪ Shareholding of 32.7m shares, market value R2.1bn (Dec 2021: R1.8bn) ▪ Recorded R195.4m (2021: R193.3m) in equity accounted earnings to Sept 2022 ▪ Received cash dividends of R194.1m (2021: R35.9m) during the year. Includ
Slide 15: Financial Services & Property
Financial Services & Property
Slide 16: AON Re Africa (18%)
RE AFRICA AON Re Africa (18%) ▪ Equity accounted earnings of R13.9m (2021: R12.0m) ▪ Received dividends of R12.7m (2021: R8.0m) during the year ▪ Intrinsic gross asset value R78.1m (2021: R69.9m)
Slide 17: Equites (1.8%)
Equites (1.8%) ▪ Received dividends of R23.2m (2021: R22.2m) during the year ▪ Closing share price R16.84 (Dec 2021: R22.99) ▪ Revalued downwards by R85.8m at year end to R235.1m ▪ Latest closing price R15.16 (07 Mar 23)
Slide 18: FPG Property Fund (10.2%)
FPG Property Fund (10.2%) ▪ Cape-based black owned and managed unlisted property fund with a property portfolio valued in excess of R7.5bn ▪ Portfolio of properties in the retail convenience market ▪ SA: GLA 309 587m2 ▪ UK: GLA 28 850m2 ▪ Participated in rights issue and invested a further R27m in t
Slide 19: Healthcare
ed BRIMSTONE INVESTMENT CORPORATION LIMITED Profitability, Empowerment. Psitive Social Impact. Healthcare D Anvott anki" COVID-ADAg eocce
Slide 20: Obsidian Health (70%)
Obsidian Health (70%) ▪ A leading supplier of innovative healthcare solutions to private and public sector ▪ Decrease in sales of Covid-19 antigen test kits and PPE ▪ Increase in elective surgeries ▪ Contributed R5.2m to group profit (2021: R20.7m) during the year
Slide 21: Restricted BEE Structures
Restricted BEE Structures “A > eS INVESTMENT CORPORATION LIMITED '@¢ BRIMSTONE Profitability. Empowerment. Positive Social Impact.
Slide 22: Phuthuma Nathi (2.8%)
Phuthuma Nathi (2.8%) ▪ Received a dividend of R42.1m during the year ▪ Closing share price R133.11 (Dec 2021: R134.95) ▪ Revalued downwards by R3.5m to R252.3m ▪ Latest closing price R139.01 (07 Mar 23)
Slide 23: MTN Zakhele Futhi (1.5%)
MTN Zakhele Futhi (1.5%) ▪ Closing share price R19.40 (Dec 2021: R31.00) ▪ Revalued downwards by R21.1m to R35.3m ▪ Latest closing price R20.01 (07 Mar 23) ▪ Matures on 25 Nov 2024
Slide 24: STADIO (5.1%)
STADIO (5.1%) ▪ Received a maiden dividend of R2.0m during the year ▪ Closing share price R4.91 (Dec 2021: R3.75) ▪ Revalued upwards by R50.5m to R213.9m ▪ Latest closing price R4.50 (07 Mar 23) ▪ Lock-in until 5 Dec 2024
Slide 25: Milpark Education (12.8%)
Milpark Education (12.8%) ▪ Milpark contributed R14.6m in equity accounted earnings (2021: R8.3m) ▪ Received dividends of R15.1m (2021: R17.1m) during the year ▪ Invested a further R20.4m in Milpark – final part of CA Connect early- settlement ▪ Intrinsic gross asset value R100.4m (2021: R92.9m)
Slide 26: Other
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Slide 27: South African Enterprise Development (25%)
South African Enterprise Development (25%) ▪ Provides equity growth capital to high potential small and medium-sized enterprises ▪ Underlying investments ▪ High Duty Castings (45%) ▪ Tombake (32.6%) ▪ Decision Inc. (48.4%) ▪ ASG Holdings (33.5%) ▪ Specialised Food Investment Holdings (46.4%) ▪ Seapr
Slide 28: Financial Results
ei BRIMSTONE INVESTMENT CORPORATION LIMITED FINANCIAL RESULTS
Slide 29: Group Income Statement
Group Income Statement Key line items Dec Dec % R’000 2022 2021 Change Continuing operations SHG: R1.2bn (27%) Sales and fee income 6 137 165 4 979 804 23.2% OBH: R74m (24%) Dividends received 75 687 74 922 1.0% Operating profit 509 565 695 091 (26.7%) SHG: R203m (29%) Fair value gains 34 324 273 91
Slide 30: Analysis of Dividends Received
Analysis of Dividends Received Dec Dec R’000 2022 2021 Sea Harvest 89 324 71 775 Obsidian 17 500 - Oceana 194 116 35 890 AON Re (net of minority share) 7 636 4 804 Milpark (net of minority share) 7 680 8 705 Phuthuma Nathi 42 121 42 121 Equites 23 197 22 185 Other 13 316 13 108 Total dividends recei
Slide 31: Analysis of Fair Value Movements
Analysis of Fair Value Movements Dec Dec R’000 2022 2021 Life Healthcare - 351 932 Zero Cost Collar (derivative) - (346 499) Equites (85 846) 78 447 STADIO Holdings 50 535 78 417 FPG Properties 55 667 47 076 MTN Zakhele Futhi (21 098) 38 795 Phuthuma Nathi (3 488) 30 706 Contingent consideration 20
Slide 32: Share of Profits of Associates & JV's
Share of Profits of Associates & JV’s Dec Dec % R’000 2022 2021 Change Oceana* 195 431 233 975 (16.5%) Aon Re 13 934 12 020 15.9% Milpark 14 603 8 337 75.2% Other 4 383 2 508 74.8% Total 228 351 256 840 (11.1%) * Included in other investment losses in the prior year is an amount of R40 640k relating
Slide 33: Net Finance Costs
Net Finance Costs Dec Dec R’000 2022 2021 Brimstone 388 9 028 Newshelf 1063 160 510 129 350 Sea Harvest 143 761 77 860 Other subsidiaries (OBH and HOM) 1 636 2 721 Total finance costs 306 295 218 959 Interest income (18 737) (19 797) Net finance costs 287 558 199 162
Slide 34: Group Balance Sheet
Group Balance Sheet Key line items Dec Dec % R’000 2022 2021 Change SHG: R259m (capex & MGK acq.) Property, plant and equipment 2 408 651 2 253 348 6.9% SHG: R803m (MGK acq.) Goodwill and intangible assets 2 445 085 1 641 820 48.9% Investments in associates and JV’s 2 661 300 2 332 148 14.1% OGL: R3
Slide 35: Intrinsic Net Asset Value
ei BRIMSTONE INVESTMENT CORPORATION LIMITED INTRINSIC NET ASSET VALUE
Slide 36: Intrinsic NAV Detail: Listed investments
INTRINSIC NAV DETAIL Listed investments Gross Debt CGT INAV Asset % held Valuation basis R’000 R’000 R’000 R’000 Oceana 25.1% Mkt value 2 071 743 - - 2 071 743 Sea Harvest 53.4% Mkt value 1 914 707 - - 1 914 707 Phuthuma Nathi 2.8% Mkt value 252 300 - (3 365) 248 935 Equites 1.8% Mkt value 235 063 -
Slide 37: Intrinsic NAV Detail: Unlisted investments
INTRINSIC NAV DETAIL Unlisted investments Gross Debt CGT INAV Asset % held Valuation basis R’000 R’000 R’000 R’000 FPG Property Fund 10.2% Book value 312 348 - (32 947) 279 401 Milpark Education 12.8% Market approach 100 470 - (6 246) 94 224 Aon Re Africa 18.0% PE valuation 78 086 - (15 143) 62 943
Slide 38: Intrinsic NAV Summary
INTRINSIC NAV Summary Gross Debt CGT INAV Asset R’000 R’000 R’000 R’000 Listed 4 723 002 - (28 247) 4 694 755 Unlisted 739 878 - (45 717) 694 161 Cash / (Net debt) 115 280 (2 216 954) - (2 101 674) Total 5 578 160 (2 216 954) (73 964) 3 287 242 Intrinsic NAV per share (cents) 2 248 (894) (30) 1 325
Slide 39: Other Key Statistics
Other Key Statistics 31 Dec 31 Dec Change R’000 2022 2021 Intrinsic gross asset value 5 578 160 5 512 768 1.2% Book NAV 3 323 504 2 924 444 13.6% Book NAV per share (cents) 1 339.6 1 180.3 13.5% Intrinsic NAV 3 287 242 3 255 610 1.0% Intrinsic NAV per share (cents) 1 325.0 1 314.0 0.8% Market price
Slide 40: Questions
ei BRIMSTONE INVESTMENT CORPORATION LIMITED QUESTIONS