Vu­nani off­loads pri­vate wealth, in­vest­ment

The Star Late Edition - - COMPANIES - To Sandile Mchunu

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 brok- er­ing 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

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