Johannesburg - Pan-African financial services group Vunani had returned to profitability after two years of losses, it announced yesterday.
It reported a R9.9 million profit from continuing operations for the 14 months to end February from R8.6m and R25.3m losses for the 2015 and 2014 year-ends, respectively.
Read: Vunani turns its fortunes around
Chief executive Ethan Dube said: “These results mark a noticeable return to profitability. Vunani has been fortunate in that it has seen steady deal flow and promising opportunities, despite subdued market conditions.”
Vunani has changed its financial year-end reporting to accommodate its Fairheads acquisition. “The acquisition and bedding down of Fairheads was a major achievement during the year. It provides a robust platform for asset administration capabilities, and it had a pleasing performance, contributing solidly to the group result,” Dube said.
Vunani paid Mandlalux Proprietary R210m in March last year for a 70 percent stake in Fairheads International Holdings.
Profitable business
“We have bought a profitable business, with a strong management team behind it, and the acquisition will boost Vunani’s business in the future,” Dube said. Fairheads contributed R9.7m in equity accounted after tax earnings to the group for the period.
During the period, the group also grew its revenue to R154.2m, up 17.35 percent.
Basic headline earnings per share from continuing operations was 7.6 cents per share, up from 5.9c in the prior period, while basic earnings per share from continuing operations was 7.8c per share, up from 5.9c.
Vunani proposed to offer shareholders a dividend of 6c per share with the alternative of four shares for every 100 shares held, subject to JSE approval. “A formal dividend declaration will be made once the requisite approvals have been obtained,” Dube said.
The group said domestic growth prospects and business conditions deteriorated over the course of last year into this year. The period was characterised by growing uncertainty amid weaker global demand for resources, rising interest rates and increased concerns regarding the prospects for domestic inflation.
The heightened risk of South Africa’s credit rating being downgraded, a weaker rand and higher import prices due to severe drought also weakened economic growth prospects.
These factors caused tougher business conditions compared with what was envisaged at the beginning of last year.
Vunani shares were unchanged yesterday at R1.60.
BUSINESS REPORT