Vunani plans more shares

Vunani Holdings wants to increase the number of its shares in free-float, saying on Thursday that it would consider placing shares with fund managers and private clients.

Tightly held Vunani Holdings wants to have more shares in free float, saying on Thursday that it would consider placing shares with fund managers and private clients to promote trade in the stock, or using a partial share offer to fund a large acquisition in future.

“We have too many shares held by strategic shareholders, including the founders,” CEO Ethan Dube said on Thursday, implying that management could sell some shares.

Only about 12%-15% of the company’s shares were in free float, which dented interest from institutional investors, he said.

“Institutions want to buy, but there isn’t enough [liquidity],” said Dube, speaking after the release of Vunani’s results for the six months to August.

Vunani, which offers asset management, investment banking and stockbroking services to institutional and retail clients, has struggled to break into a market dominated by entrenched incumbents.

Profit fell in its fund management business, on lower performance fees, although assets under management grew, which bodes well for future profitability. The company’s institutional securities broking business swung from profit to loss on lower trading volumes.

The consolidation of retirement fund administrator Fairheads was earnings accretive for the group, as were the coalprocessing operations in its private equity unit.

A successful tender for a development between Clifton and Camps Bay in Cape Town would kick-start the property business, Dube said.

The idea was to build businesses with a view to spin them out of the private equity fund, either through a listing or through a sale.

Vunani grew revenue 120% to R160.1m over the period, while taxed profit increased 9.2% to R15.7m.