DURBAN – Patrice Motsepe’s African Rainbow Capital Investments (ARCI) blamed the poor South African economy for missing its targets for the year to end June as it grew its intrinsic net asset value (INAV) by 2.4 percent – below the medium-to long-term expectations of 16 percent a year. Its INAV only increased to to R9.34 a share, marginally up from R9.12 last year.
“The poor performance of the economy resulted from several political and economic factors and is expected to continue over the short to medium term. Our investee companies generally experienced low consumer, business and investor confidence, which was exacerbated by political and policy uncertainty before and after the May national elections,” the JSE-listed investment holding company said.
ARCI is owned by mining magnate Patrice Motsepe and has stakes in Alexander Forbes and Sanlam. However, the group managed to achieve some positive developments during the year.
Its subsidiary, African Rainbow Capital Financial Services Holdings (ARC FinHoldCo), increased its holding in TymeBank to 100 percent in November.
ARC FinHoldCo acquired the 90 percent stake previously held by Commonwealth Bank of Australia and its ARC Fund contributed R240 million for its effective 49.9 percent share of capital injections into the bank.
TymeBank is a digital bank and at the end of June it had more than 500 000 customers.
“The bank is signing up between 3 000 and 3 500 customers a day, with about 40 percent of bank accounts being active,” the group said.
The group said with the introduction of new partners in the bank through a series of capital raises, the 100 percent controlling interest held by ARC FinHoldCo was diluted to 65.5 percent.
“This equates to an effective ownership interest of 32.75 percent for the ARC Fund,” the group said.
ARC FinHoldCo also increased its stake in Alexander Forbes to 13.11 percent, up from the previously held 8.9 percent for a purchase consideration of R308m.
The ARC Fund increased its intrinsic portfolio value (IPV) by 14.9 percent to R9.36 billion, largely driven by net investments made by the ARC Fund totalling R1.2bn.
The ARC Fund also had cash of R725m at the end of the period, down from R1.6bn compared to last year.
Another investment ARCI highlighted was Rain, a mobile network operator. It said the value of its investment in Rain increased from R2.14bn to R2.5bn, mainly as a result of a fair value write-up of R364m.
“The company is well positioned to become a major player in the 5G data market," it said.
ARCI shares closed unchanged at R4.09 on the JSE on Thursday.