AEEI share at record high on solid results
The share price of African Empowerment Equity Investments (AEEI) — which has core investments in the technology and fishing sectors — streaked to a record high on Tuesday following the release of robust results for the year to August.
The share price has gained more than 50% in the past 12 months. The company raised its final dividend to 5.5c per share, which more than doubled the full year payout to 7.5c per share.
Apart from its technology and fishing core, AEEI also holds interests in healthcare and biotechnology, events, tourism and broadcast media.
It also has a portfolio of strategic investments including JSE-listed financial services counter Sygnia, consumer brands giant Pioneer Foods and unlisted defence systems contractor Saab SA.
Investors’ attention, however, has been focused on the pending listing of technology company Ayo on the JSE. This will be the second listing by AEEI, which floated Premier Fishing & Brands on the JSE in March.
Ayo – excluding AEEI’s 30% stake in British Telecoms SA (BTSA) – reported revenue up 183% to R479m after two sizeable acquisitions during the financial year. Operating profit rose 47% to R49m.
The inclusion of the stake in BTSA pushed operating profit to nearly R650m, suggesting an upward revaluation of the investment of about R500m.
AEEI CEO Khalid Abdulla said that the revaluation of BTSA reflected the company’s growth prospects.
“Their profit has grown 20 times since we invested in them (AEEI acquired a 30% stake in BTSA for R27m in 2007). We think the valuation is conservative, and that BTSA’s prospects are excellent in this country.”
Abdulla said a listing circular for Ayo had been submitted to the JSE and was awaiting final timing and approval.
AEEI also reported a 7% rise in cash flow from operating activities to almost R80m. This translated into 16c per share.
AEEI had a solid balance sheet and improved cash flows. “Our business model remains on a firm growth path, investing in other companies and market strategies,” Abdulla said.