DURBAN – RECM and Calibre (RAC) is bullish about its investments going forward, despite going through a lean period by reporting a loss for the six months to September.
The group said on Friday that its investments had exciting prospects, with the exception of its businesses exposed to mining and construction. “Fortunately, these represent less than 5 percent of our total assets. Of course, when we initially made these investments, they formed a larger portion of the asset base.”
The group said by the end of the reporting period, the market had, correctly so, penalised them by marking the value of these investments down substantially. “This is reflected in our current net asset value (NAV) as it stands. Going forward they will play a small role in the NAV of RAC.”
RAC's net asset value per share, which includes ordinary and participating preference, amounted to R26.86 a share, and this represents a decrease of 3.3 percent in the first six months of the financial year, and a decrease of 3.6 percent in the last 12 months.
RAC reported a R47 million loss during the period compared with a profit of R26.4m reported last year. However, the group is banking on its core investments to effect a turnaround in the next reporting period. “Our core investments now make up over 84 percent of our asset base. We have two things going in our favour in these businesses. They have good growth prospects, and their valuations are conservatively struck. These two factors set RAC up for continued strong NAV growth,” the group said.
RAC's core investments include Goldrush, Astoria Investments, The JB Private Equity Partnership, Outdoor Investment Holdings, College SA and ISA Carstens.
The group said Goldrush continued to perform well with total revenue for the past 12 months exceeding R1.1 billion, compared with R836m reported last year. Goldrush owns 32 Bingo licences, of which two were rolled out this period.
The group benefited from Astoria as the share price gained 14.5 percent during the period under review. RAC owns a 28.7 percent stake in Astoria.
The group said its investment in Outdoor Investment Holdings and its subsidiaries Safari Outdoor, Formalito and Inyathi Sporting Supplies had performed above expectation in an increasingly competitive industry.