Brait, owner of gym chain Virgin Active and clothing retailer New Look, reported a first-half loss this week, saying the pound’s weakness against the rand cut into the net asset value of the UK units it purchased last year.
The investment company, whose biggest shareholder is billionaire Christo Wiese, posted a R4.5 billion loss for the six months through September, compared with a profit of R18.1 billion a year earlier.
“The UK apparel market continues to be challenging,” a Brait representative said.
“The recent macro events have highlighted the importance of increasing the diversity of operations.”
The loss comes at an inopportune time as Brait seeks a listing on the London Stock Exchange and is looking for new capital to fund future deals.
The company’s most recent investments have focused on the UK, where Brait last year spent a combined £1.6 billion (R28 billion) on Virgin Active, New Look and an increased stake in low-cost supermarket chain Iceland.
The pound tumbled after the UK voted to leave the EU on June 23.
New Look’s net asset value fell 42% to R18.7 billion.
The clothing retailer, which accounts for 30% of Brait’s net worth, this month said adjusted earnings before interest, taxes, depreciation and amortisation slumped 29% in the six months to September 24.
Virgin Active’s net asset value slid to R16.1 billion from R16.3 billion. The gym chain accounts for 26% of the company’s value.