AEEI warns of drop in 2023 earnings

Sekunjalo subsidiary African Equity Empowerment Investments (AEEI), which recently announced its delisting from the JSE, has flagged a fall in headline earnings per share (Heps) for its 2023 financial year.

This comes as the group announced that its loss-making technology division, Ayo Technology, would be classified as a discontinued operation after unbundling it from the group.

The group’s Heps are expected to fall between 83% and 103% to as low as 0.5c for continuing operations, the firm said in a trading update on Tuesday.

Discontinued operations are expected to record a decline of between 5% and 25% to between 38.01c and 29.99c from the 40.09c headline loss per share of continuing operations for the prior year.

“This is due to impairments and the loss arising from the unbundling of Ayo,” AEEI said.

The recent unbundling of the group’s investment in Ayo and the proposed sale of a 30% stake in British Telecom SA (BTSA) by Kilomix, an AEEI wholly owned subsidiary, for R290m have been cited as among the reasons behind its plans to repurchase eligible shareholders’ shares and delist from the JSE.

AEEI also said the incentive for listing on the bourse has been eroded.

“In the current operating environment and given the illiquidity of the shares, the board is of the opinion that AEEI’s remaining portfolio no longer warrants a listing on the JSE as it can no longer justify the costs and administrative burden of a listing relative to its benefits,” the company said.

The Cape Town-based AEEI has investments in Premier Fishing and Brands, as well as in the technology, events and tourism, health and beauty, and biotherapeutics sectors.

Companies in the Iqbal Survé-controlled Sekunjalo Investment Holdings group have been entangled in various debacles since 2020, when the Mpati commission raised questions about the relationship between the Public Investment Corporation (PIC) and Sekunjalo; and a subsequent PIC investment in Ayo Technology.

Some of the major banks then moved to cut ties with the group, citing reputational issues, but the group has fought back in a string of legal battles including an appearance before competition authorities, where Sekunjalo has maintained that the decision by the banks is politically motivated and part of a broader attack.

AEEI, a black-controlled diversified investment holding company, debuted on the JSE in May 1999 and has a market capitalisation of R540m.