Tiso Blackstar needs to dispose of more assets

TISO BLACKSTAR is banking on a year of intense restructuring, which includes the sale of its media business, to reduce debt and put it on a sounder footing.

The group, which owns a brand printing, packaging and digital solutions business in Durban and media titles such as Business Day, Financial Mail and Sunday Times, late on Monday reported a massive 160 percent increase in headlined loss per share to -76.60 cents for the year to June 30, compared with the previous year.

Following the anticipated R1.05 billion sale of the media, broadcast and content business to Lebashe Investment Group next month, the liquidation of steel pipe-making business Robor and acquisitions in Hirt & Carter, chief executive Andrew Bonamour said that he expected Tiso’s borrowings to end up between R300 million and R350m, with asset-based financing of about R186m remaining by next month.

“Total debt will be comfortably serviced by the remaining businesses.

“The strengthening of the balance sheet as a result of the transaction presents an opportunity to take a longer-term view around the future direction of the company,” he said.

The short-term strategy would be to grow Hirt & Carter, and unlock value in the other assets, which mainly comprise the holding in Kagiso Tiso Holdings (KTH).

The Gallo music business would be developed.

A structure for a more streamlined business would be developed, while the integration and acquisitions in Hirt & Carter would be bedded down.

Hirt & Carter, now operating from one site after relocating in the year, was realising process improvement, efficiencies and better cost-management benefits “on an ongoing basis”.

Over the medium term, certain assets would be sold once market conditions allowed, especially KTH.

Hirt & Carter aimed to capitalise on opportunities globally for its retail marketing software systems.

It was hoped to develop Gallo into a South Africa and African market leader and then be sold, while consolidation opportunities would be sought.

The board was investigating whether to change to an investment entity, which would necessitate a change in accounting policies from consolidation to holding investments at fair value, said Bonamour.

Net asset value per share fell by 19.5 percent to 887.74c a share.

Tiso Blackstar shares remained unchanged at R3.60 on the JSE yesterday.