Stellar Capital’s net asset value in decline
DIVERSIFIED investment holding company Stellar Capital Partners said yesterday that its net asset value per share (NAVPS) declined by 13.18 percent in the six months to end December, primarily driven by the listed share price of Torre Industries, and a reduction in the valuation of Tellumat.
Torre’s share price lost 49 cents during the period to R1 a share. Stellar Capital holds a 55.62 percent stake in Torre Industries. As a result, the group’s NAVPS declined to R1.12 a share during the period, dropping by 17c as compared to the R1.29 a share at the end of June.
However, the board is confident about its businesses going forward, and is involved in a strategic review that will see bigger returns for shareholders in the future.
“The board’s focus remains keenly on the optimisation of the group’s capital structure, which it anticipates will be finalised by June 30. The group has determined that it will reduce its exposure to the industrial sector in a practical and organised process,” the group said.
Stellar said it also had mediumterm objectives to hold non-controlling stakes in underlying investments, and to be invested in businesses which could demonstrate growth prospects that meet Stellar Capital’s minimum mediumterm return requirements, as well as being scalable within the industry they competed in.
“Thus Stellar Capital continues with its strategic review of current investments it holds, and which will determine the long-term approach to improving shareholder returns and efficient allocation of capital,” the group said.
The group has significant interests in both listed and unlisted investments.
Besides Torre and Tellumat, Stellar has also investments in Prescient, Cadiz, Praxis and Integrated Equipment Rentals, Greenpoint Capital, previously Stellar Credit, and Amecor.
Stellar Capital took the strategic decision to exit the investment in Integrated Equipment Rentals during the period under review, as it held no equity in the operating business which provided the underlying services to the clients.
“Stellar Capital was released from all obligations for the debts of the business as part of the exit,” the group said.
The Prescient investment performed well during the period. Assets under management grew to R91.1 billion, up from R82.9bn at the end of June, and assets under administration grew to R267.9bn, up from R222.7bn.
Prescient is also looking to expand its international offerings in Europe and China, and expects these to be a growth area for the business in coming years.
“Prescient is committed to improving its empowerment status through a multitude of initiatives, which may well include increasing its empowerment ownership,” the group said.
Cadiz’s assets under management marginally improved to R7.3bn, up from R7bn, while Tellumat is still experiencing depressed operating results, particularly in the Defence and Integrated Solutions divisions, which is partially offset by better performance of the Air Traffic Management division.