Vu­nani plans more shares

Business Day - - FRONT PAGE - Hanna Zi­ady In­vest­ment Writer zi­adyh@busi­

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.

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