Share price: 1 764c/1 795c JSE code: BRT/BRN
BUY ADMITTEDLY BRIMSTONE SHARES HAVE offered much larger discounts on intrinsic net asset value (NAV). At the time of writing the share price (ordinary shares) was offering only a 10% discount on the R19,79c/share intrinsic NAV recorded at the end of December 2014. Considering that Brimstone’s two anchor investments, Life Health Care and fishing group Oceana, have not shifted significantly since the end of 2014, the official discount gauge is relatively intact. But Brimstone underlined its reputation as a genuine empowerment company by paying a final dividend of 30c/share and a special dividend of 20c/share.
IM would contend the special payout partly recognises the paucity of suitably priced new investment opportunities available to Brimstone, while reiterating the company’s directors remain aware of a commitment to deliver physical value to the many community shareholders. The special dividend by no means rules out the chances of Brimstone making new investments in the short term. In fact the recent involvement in a broad-based empowerment deal at logistics and shipping giant Grindrod confirms Brimstone’s status as a preferred black economic empowerment equity partner.
Brimstone may be a boring choice compared with its more colourful countermates reviewed alongside, but the well diversified investment portfolio, strong balance sheet, long track record and access to potential deal-flows means Brimstone remains the first choice empowerment share.