Johannesburg - Business Partners is committed to investing R1.2 billion in small and medium enterprises in its current financial year.
This comes as the risk financier indicates in its 2015/16 annual report that it disbursed R966.2 million in funding in the last financial year, an increase of 35 percent.
In a statement, the financier – which provides funding to local and African companies – said there is still significant demand for finance among SMEs to facilitate growth, restructure balance sheets, or to ensure they effectively navigate the adverse market conditions that businesses currently face.
Business Partners disbursed the amount through 307 deals between April and the end of March this year. In the previous year, R713.1 million was disbursed through 278 investments.
MD Ben Bierman says “during a year when SMEs experienced tough trading conditions, the volume of business concluded exceeded our expectations”.
Business Partners also achieved its annual projection of approving more than R1.1 billion in new investments to SMEs across South Africa.
It increased profit before tax by 9.1 percent to R260.3 million, up from R238.6 million during the previous financial year.
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“Given market conditions over the past year, the company’s financial position was strengthened by its prudent expense management, increasing revenue lines as well as the growth in our asset base. The majority of the company’s revenue lines – net interest revenue, fees revenue and property revenue, and property management service income – all showed healthy increases.”
Net profit was impacted by changes in the inclusion rate for capital gains tax for companies from 66.6 percent to 80 percent. Profit after tax increased 2.1 percent to R186.5 million.
Through the funding disbursed this financial year, 14 221 jobs were either sustained or created. Bierman adds, while this figure is below the number jobs created during the previous financial year (17 231), it represents a material effort in addressing South Africa’s unemployment challenge.
Bierman adds the company seeks to invest in excess of R1.2 billion in SMEs during the 2016/17 financial year. “Given the current environment, it will be challenging, but we are positive this is achievable if we adopt a similar investment strategy.”
IOL