African Equity Empowerment Investments (AEEI) increased revenue 27% in the year to August mainly due to better squid catches and improved prices in the fishing division, but the group bottom line was affected by losses and impairments in the technology division.
A loss before tax was due to accounting adjustments for impairment of the investment in an associate held for sale, and the unbundling loss from the disposal of AYO Group from the technology division.
Revenue from continuing operations increased 27% to R734.25 million. Net asset value per share was down 75% to 246.07 cents. The dividend was passed.
The fishing and brands division reported a solid performance, with revenue up 19% to R566m, primarily due to an increase in the squid catch rates and volumes sold in the squid sector, compared with the prior year.
The export demand for squid was “very strong” with selling prices improving, and the group was able to sell at better exchange rates than expected. Operating profit for this segment increased to R74m from R14m.
Other sectors that did well included South Coast rock lobster, pelagic, hake and Seagro. The West Coast rock lobster and abalone has had tough years, but due to cost-cutting, their earnings before interest, tax, depreciation and amortisation broke even.
In the Technology division, the 49.36% stake in AYO was disposed of on July 31. AYO contributed R2.1bn revenue and losses of R512m for the 11 months to July 31.
Global Command and Control Technologies for the first time reported a positive annual operating profit, and a R1.4m net profit compared with a prior year R21.8m loss.
“As the only original equipment manufacturer on the African continent, the company was able to experience revenue growth while reducing and maintaining a low-cost base,” a statement said.
In the Health and Beauty segment, Orleans Cosmetics increased revenue 10% to R38m as it continued to recover from the Covid-19 pandemic, with customer sales improving.
Global supply chain issues that led to delayed deliveries affected sales. Nuxe traded well with sales up 16.7% and it now represented 40% of the company’s sales.
AfriNat increased revenue to R12.1m compared with R11.8m the prior year.
This was based on a shift from the depressed citrus market from the previous year. Revenue was derived from new clients which AfriNat was expanding to, and from new territories in the northern provinces.
The research and development division was doing product development at different stages, including developmental work on the dendritic cell vaccine for cancer immunotherapy and communicable diseases such as extreme drug-resistant tuberculosis.
There was minimal progress in this division owing to funding challenges and management was seeking alternative funding partners.
In the events and tourism division, revenue from ESP Afrika increased to R7m from no revenue the prior year, indicating a recovery from Covid-19 restrictions, which also led to the cancellation of events and large public gatherings, including the division’s flagship event, the annual Cape Town International Jazz Festival.
The company anticipated a further revenue increase due to the planned hosting of the Cape Town International Jazz Festival.
The corporate division holds strategic investments including BT Communications Services South Africa (BTSA). On September 26, AEEI subsidiary Kilomix Investments entered into a share repurchase agreement with BTSA, for it to acquire 30% of the share capital of BTSA owned by Kilomix, for R290m.
The corporate division incurred losses of R1.1bn from a profit of R5.7m the prior year, mainly due to the impairment of the BTSA investment of R702m.
BUSINESS REPORT