AEEI records over 50% growth in tough times
Shares rise on the JSE
NOT many firms can boast of growing operating profit by more than 50 percent year on year, but African Equity Empowerment Investments (AEEI) grew 53percent in the year to August – despite the sluggish global and domestic economic environment.
The firm rose 1.49 percent on the JSE yesterday after it reported a record operating profit, which had grown to R285million in the year ended August from R186m last year.
The shares closed at R3.39, 1.19percent higher on the day.
AEEI is focused on investment in food and fishing, information technology and tourism. It said its food and fishing division beat expectations with higher sales volumes resulting in a 15percent growth in revenue for the division to R401m from R349m and operating profit increasing to R75m compared with R68m last year.
In terms of technology, revenue was expected to grow by more than R400m next year following two acquisitions this year. AEEI group chief executive Khalid Abdulla said yesterday that the results were a reflection that the company was delivering on its targets. “The 2016 financial year was filled with global and local challenges across all fronts… but we buckled down, remaining singularly focused on reaching
our pre-identified goals.”
AEEI bolstered its assets by 26 percent to R1.6 billion in the year to August with acquisitions in Saab Grintek Defence (SGD) and Sygnia. AEEI increased its stake in SGD after it clinched a R125m deal to acquire a stake of 25 percent plus one last year.
Asked if the company planned to increase its stake in SGD, Abdulla said: “No we are okay for now. We want to ensure that we extract value from the stake by ensuring that shareholder value increases year on year… We will ensure that we assist to drive marketing because our expertise and theirs complement each other.”
More acquisitions
The company, which acquired a 57 percent stake in Tugela Technologies for an undisclosed amount this week, was poised for exponential growth and would make more acquisitions in the coming month particularly in information technology (IT), Abdulla said.
In terms of outlook, AEEI planned to list its IT business separately after announcing it would list its food and fishing business, Abdulla said. The listing would go ahead if each of the divisions was worth R1bn and made R100m profit.
“We are hoping to list the IT business in the next three to five years,” he said.
Headline earnings per share rose 39percent to 43.13c from 31.06c.
The dividend payout rose 32percent to 3.3c a share from 2.5c a share last year. Group revenue rose 12 percent to R752m from R672m mainly driven by organic growth and the expansion of its operations.