Vunani offloads private wealth, investment

FINANCIAL services group Vunani yesterday announced that it had offloaded the private wealth and investments division to a third party as it was no longer aligned to its business anymore.

The group said the sale was recorded in its interim results for the six months to end August.

Chief executive Ethan Dube said keeping private wealth and investments was not working for the group. “It is still a good business, but it was not working for us,” he said. “However, the group is still holding on to its other divisions which include fund management, asset administration, advisory services, institutional brokering and private equity.”

Vunani reported that revenue from continuing operations increased by 113 percent to R160.1 million during the period, up from R72.7m reported a year ago. The group attributed the rise to the consolidation of Fairheads’ into the group’s results and increased revenue from the private equity segment.

Vunani acquired the 70 percent stake in Fairheads International Holdings for R210m in 2015.

“The first three months of the first half of the financial year were not good, but the business managed to bounce back in the next quarter. And now we are confident that we are going to make our annual targets,” Dube said.

Other income increased by 425 percent to R1.8m, up from R0.4m.

Total investment income for the current period amounted to R0.8m, down from R1.6m compared to last year, while headline and basic earnings per share declined largely as a result of the number of shares increasing from 118 916 million to 164 026 million over the period and the difficult equity markets during the first three months

Positive fair value adjustments and impairments of R6.6m relate to a net increase in the value of the group’s listed and unlisted investment portfolio.

“These are solid results primarily due to the bedding down of structural changes and alignments within the group as well as improved performance from all our business units,” Dube said. “The successful integration of Fairheads is a significant contributor to the revenue line.”

He said the fund management division reported revenue of R32m, down from R33m, a decline of 3 percent, with profit also down to R1.5m as compared to R5m reported a year ago.

The asset administration segment includes investment in Fairheads and Dube said it was making good progress in increasing its assets under administration, which amounted to R6.2 billion. The segment contributed R4.7m to the group’s results compared to R2.1m in the prior period.

He said the advisory services was affected by the tough economic environment, resulting in a 23 percent decrease in revenue earned from R3m in the prior period to R2.3m currently.

Institutional securities broking, this segment includes equity, derivative and capital market trading services to institutional clients. Revenue decreased by 19 percent. The segment reported a loss of R1.5m as compared to a profit of R2.5m a year ago.

The private equity reported R11.2m profit during the period, up from R5.1m a year ago.

The group did not declare a dividend.

Vunani shares remained unchanged on the JSE yesterday to close at R2.80