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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.

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