Vunani posts 82% increase in earnings per share

VUNANI yesterday reported a strong surge in earnings for the six months to end August, boosted by turnaround in the securities broking business as well as acquisitions.

The JSE-listed and black-owned financial services group reported an 82 percent increase in headline earnings per share (Heps) to 19.7 cents a share, up from 10.8c compared to last year. The group said the increase was largely influenced by the inclusion of recent acquisitions of an insurance and fund management business in Eswatini and Botswana, respectively.

At the beginning of the year, Vunani acquired a 60 percent stake in Vunani Fund Managers Botswana (VFMB), previously Stanlib Asset Managers, in Botswana as well as a shortterm insurance business operating in Eswatini in December 2019.

The group said the turnaround strategy implemented last year resulted in an improved performance in the institutional securities broking business as its revenue increased by 40 percent to R22.6 million and improved on a loss of R2.4m to a profit of R4.6m in the current period.

As a result, group revenue increased by 69 percent to R288.2m while total profit surged by 90 percent to R36m.

Vunani said the designation of financial services businesses as essential services providers during the hard lockdown led to minimum disruptions and yielded positive results for the group.

Chief executive Butana Khoza said trading under the Covid-19 climate coupled with a stagnant economy has been a challenge for the group.

“Our strategy to turn around our underperforming stockbroking business, company-wide business optimisation and successful integration of our acquisitions has borne fruit. This will be important as we focus attention on the next strategic intervention which entails separating our principal investment activities from our operating financial services business,” Khoza said.

Vunani declared an interim dividend of 5c a share out of income reserves.

The group's reporting segments include fund management, asset administration, insurance, investment banking (advisory services and institutional securities broking) and private equity (other investments and commodities trading).

The group said its commodities trading segment felt the impact of the lockdown and lower coal prices negatively affected mining activity as it reported a loss of R1.9m.

The fund management segment recorded a 68 percent increase in revenue to R66.9m and profit was up by 128 percent to R8.9m. Vunani Fund Managers reported a 12 percent increase in assets under management to R44.6 billion, up from R39.6bn at the end of February.

Looking ahead, Khoza said the group would continue its focus on improving the performance of its operating businesses as well as improving synergies.

“Vunani will continue to look at acquisitions that are in line with creating a diversified financial services business,” he said.

Vunani shares remained unchanged on the JSE yesterday and closed at R2.50.