Stellar maintains liquid balance sheet to fight another day

By Sandile Mchunu Time of article published Mar 16, 2020

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DURBAN - Stellar Capital Partners had a difficult trading period in the six months to the end of December after its earnings fell by 111percent into a loss of R17.14million.

The JSE-listed investment holding company said that despite the recessionary state of the South African economy, and fast receding valuation multiples, it had been able to protect its balance sheet values due to the good performance of its niche portfolio of financial assets.

“The company has a debt-free, liquid balance sheet that will enable it to withstand any of the additional challenges posed by the recent volatility in financial markets. The board continues to actively pursue various initiatives regarding the future strategy and positioning of the company, and the outcome of this process will be communicated to shareholders once finalised,” the group said.

Its headline earnings per share (Heps) also declined by 111percent into a loss of 1.64cents a share compared with Heps of 14.86c reported a year earlier, but its net asset value per share increased by 1percent to 121c.

The group did not declare an interim dividend during the period.

The group has invested in companies such as Prescient, AHI Asset Management, Sithega Fund, Praxis, Greenpoint, Inyosi Solutions and Tellumat.

Prescient grew its assets under management to R98.4billion, while assets under administration increased to R478.3bn at the end of December and the group said Prescient continued with its five-year growth strategy.

“The partnership with Sithega as a new empowerment shareholder continues to strengthen, as Sithega utilises its experience and business network in the financial services industry to support the Prescient growth activities. The Prescient Group disposed of its Life Company, but is still in the process of expanding its international businesses in Britain, Ireland and China. Prescient China has partnered with Reinet to accelerate its growth into new markets in Asia,” the group said.

This comes after Capital Partners invested R54m in Sithega Fund in April last year as part of the Prescient broad-based black economic empowerment transactions and as a seed investor of the fund.

Sithega is a black-owned and managed investment vehicle led by Thabo Dloti, which has acquired a controlling stake in Prescient and has a desire to grow its exposure to the traditional financial services market.

“Prescient is currently the only investment held by the Sithega Fund as of December 31. Sithega is targeting the conclusion of a second investment transaction during the first part of 2020,” the group said.

Stellar shares rose 1.37percent to close at 74c on the JSE on Friday.


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