Peregrine delivers improved interim profit but stock slides

INVESTMENT holding company Peregrine Holdings yesterday delivered an improved set of interim results.

The group said the increase in profits was made by capitalising on its strong base of profitable, cash-generative operating businesses, which highlighted the diversified nature of its earnings streams.

In its interim results for the six months to September, the group reported that net profit for the half-year increased by 6 percent to R325 million.

Operating revenue rose by 3 percent to R1.09 billion. Headline earnings per share rose by 1 percent to 112.5c.

Despite the improved results, Peregrine’s shares on the JSE yesterday fell by 1.45 percent to R29.28, which valued the company at R6.5bn.

“Our new acquisitions continue to exceed expectations. And the group, which is wellpositioned to capitalise on further growth opportunities, continues to focus on growing its businesses organically and driving cross-business revenue synergies,” said Peregrine.

Normalised headline earnings grew by 12 percent to R246m from R220m in 2014.

Normalised headline earnings per share rose by 7 percent to 115.4c.

Normalised cash generated from operating activities amounted to R306m, up 11 percent from R276m in the same interim period last year.

Peregrine’s shareholding in Stenham increased from 80.91 percent to 84.89 percent in August 2015, following the repurchase and subsequent cancellation of 34 665 Stenham shares.

Acquisition

It said the acquisition of 50 percent in Java Capital in July last year had resulted in a contribution to headline earnings for the six months of R12m, compared with R6m a year ago. Java Capital had a significant amount of unbilled work in progress and a pipeline of new business at the end of the reporting period.

“Java Capital is widely regarded as the premier independent corporate advisory house in South Africa competing directly, and successfully, for mandates against local and international banks. It is also the industry leader in the provision of corporate finance services in the listed property sector,” Peregrine said.

It said significant growth in earnings from the trading and structuring businesses housed within Peregrine Securities offset slightly weaker returns in the hedge fund and wealth management sectors on the back of global and local market weakness.

The group said while proprietary returns and performance fees had decreased in an environment characterised by weak markets, levels of annuity income had increased substantially. “Annuity earnings now account for the majority of group earnings,” it said.

Peregrine wealth management subsidiary, Citadel’s assets under management were R36bn for the half-year. It had gross inflows for the six months amounting to R1.7bn.