VUNANI, the independent black-owned financial services group, reported a R200 000 total loss for the year to February 28 following losses at discontinued operations and Covid-19-related insurance write-downs.
As a result, attributable profit to equity holders fell to R20.7 million from R35.9m. A final dividend of 7.5 cents (5c) was declared.
Last October, management decided to dispose of the group’s private equity segment and a smaller portion of the fund management business. This culminated in an unbundling of its private equity business to Vunani Capital Partners, through a restructuring.
Because the unbundling was related to a major line of the group’s business, the activities were being presented as a discontinued operation.
A R20.2m loss from the discontinued operations arose from negative fair value adjustments to the private equity assets.
The insurance segment was affected by R67.9m negative fair value adjustments to insurance liabilities, compared to R4.2m the prior year, as well impairments of intangible assets of R41.1m.
Revenue from continuing operations was up 62 percent to R558.7m, profit from continuing operations fell 76 percent to R20.1m, while headline earnings per share increased to 7.2c from 0.6c in 2020.
Net cash at year-end was R195.8m versus R236.7m at the same time in 2020.
The reportable segment of Vunani Fund Managers (VFM) generated profit of R18m compared to R10.7m in 2020 after its performance improved from an increase in assets under management and higher performance fees earned.
The asset administration segment includes the investment in Fairheads Benefit Services (Fairheads). The segment contributed revenue of R144.6m to February 2021, compared to R139.2m in 2020. The segment reported a profit of R19.6m compared to R16.6m in 2020.
Oracle Insurance was consolidated for the full year compared to three months to February 2020. The business incurred significantly higher death claims during the period.
The value in-force intangible asset was impaired by R41.1m from a decrease in profitability of certain income streams as a result of the pandemic.
The advisory services segment generated revenue of R16.9m compared to R14m due to the successful conclusion of several mandates. The segment reported R5.6m profit versus a R0.2m loss in the 2020 year.
The institutional securities brokering segment generated revenue of R46.2m versus R36.9m in 2020, with the increase due to an increase in trading volumes in the market, as well as the introduction of new revenue streams. The segment reported a R14.2m profit, well up from 2020’s R3.7m loss.
BUSINESS REPORT