The group said while finding good opportunities for investment would be difficult, protecting the downside had become more important.
“In times of uncertainty, Reinet’s approach is to maintain value for its shareholders in the long-term,” the group said. “Our focus will remain on businesses that we understand and business partners that we know and trust.” Reinet reported a 5.8 percent decline in its net asset value (NAV) for the year to end March, negatively impacted by a decline in the British American Tobacco (BAT) share price.
The decline led to the company's NAV falling by 297 million (R4.77 billion) during the period from the 5.13bn recorded last year.
BAT’s shares fell 22.68 percent during the year to £31.94 (R585.01) a share, with Reinet saying it slashed 674m from its bottom line.
“The investment in BAT represented some 52.2 percent of Reinet’s net asset value at the end of March 2019 compared to 62.4 percent a year ago,” Reinet said. However, Reinet said it still had confidence in BAT after it acquired Reynolds American for $49.4bn (R710.62bn) in 2017.
“BAT continued its strong underlying performance, with Reynolds American now fully included for the first full year. However, the market still reflects uncertainty in respect of the impact of the changes the industry is going through and anticipated regulatory developments,” Reinet said.
The group said BAT would remain an attractive long-term investment and that the current industry challenges will be appropriately managed.
Reinet received 148m as dividends from BAT during the year.
Reinet, a Luxembourg-based investment vehicle that was demerged from the Swiss luxury goods company Richemont in 2008, has a number of investments in its portfolio.
Its investment in Pension Corporation represents 30.6 percent of Reinet’s NAV at the end of March, up from 25.4 percent compared to last year.
“Pension Corporation continues to perform well, writing £7.1bn of new business in 2018 compared to £3.7bn in 2017, with its embedded value increasing from £2.9bn to £3.6bn, assets under management increasing from £25.7bn to £31.4bn and with a solvency ratio of 167 percent at the end of 2018,” the group said.
Reinet shares rose 1.52 percent on the JSE on Tuesday to close at R233.