DURBAN - Reinet Investments’ share price gained 8.51% on the JSE yesterday following the release of a positive trading update for the third quarter to December.
The group announced that in the quarter its net asset value (NAV) increased by 295 million euro (about R436bn) and credited the increase to a positive impact made by its investment in British American Tobacco (BAT).
The group’s overall NAV has reached 5.69bn euro.
The share price responded positively to the update and by yesterday morning it traded higher at R289.99 a share, from Tuesday’s closing price of R267.25 a share. However, in the afternoon it reversed some of the gains to trade at R269.76.
“The increase in the net asset value of 295m euro during the quarter is largely a result of movements in the fair value of British American Tobacco and Pension Insurance Corporation Group, together with the BAT dividend receivable of 32m euro,” the group said.
It added that partially offsetting these increases in NAV were decreases in the estimated fair value of derivative assets associated with put options related to borrowings due to an increase in the BAT share price, and the effect of the weakening of the pound and the dollar against the euro in the quarter.
The NAV a share also increased during the quarter by 5.48 percent to 29.06 euro a share, from 27.55 euro a share at the end of September.
Reinet was created as a result of the restructuring of Swiss luxury group Richemont in 2008. The group is listed in Luxemburg, Amsterdam as well as the JSE. The group has invested in both listed and unlisted investments.
Reinet’s ordinary shares were listed on Euronext Amsterdam on November 14 last year.
Reinet holds 68.1 million shares in BAT, which represents about 2.97 percent of BAT's issued share capital. The value of Reinet’s investment in BAT amounted to 3.84bn euro by the end of December and this equals 67 percent of Reinet’s NAV at the end of September of 3.61bn euro.
BAT’s share price increased on the London Stock Exchange from £46.72, a share to £50.08 in the quarter and Reinet benefited as a result. “This increase in value is offset to some extent by the weakening of sterling against the euro during the quarter,” the group said.
The group said BAT declared a dividend of 43.6 pence a share for holders on record at December 28, 2017. The dividend of some €32m will be paid on February 8, 2018 and has been included in the NAV as at 31 December 2017.
- BUSINESS REPORT