Weak demand sees Brait loss widening
This year’s loss widened compared to last year’s restated figure of R10.61bn.
As a result the group’s net asset value (NAV) per share also declined by 25 percent to R41.80 a share, down from last year’s R55.86 a share.
The shares closed at R18.15.
Brait’s chairperson, Jabu Moleketi, said the group had a challenging year in its key markets of South Africa and the UK as weak consumer demand, inflationary cost pressures and increased promotional activity among its competitors had affected the performance of its portfolio companies and their peers, which had negatively impacted its NAV.
“While our NAV has declined, primarily as a result of the decline in valuation multiples due to peer group average multiples having reduced, this has been minimised as much as possible through the hard work of the management teams within our investments and our investment team, focusing on margin management and operational efficiencies,” Moleketi said.
Brait has a portfolio of investments in different companies like Virgin Active, New Look, Iceland Foods and Premier. The group also reported a basic loss and headline loss a share of 2219 cents a share, compared to last year’s 2092c.
The UK retailer, New Look, has completed its balance sheet restructuring transaction post the reporting period.
New Look’s balance sheet restructuring resulted in New Look’s long-term debt significantly dropping from £1.35bn (R25bn) to £350 million.
The long-term debt consists of the existing £100m revolving credit facility and £250m of reinstated senior secured notes (SSNs).
The group said it had received overwhelming support from the holders of SSNs, with 99 percent voting in favour and 98 percent committing to fund the £150m capital raise in the form of new SSNs, which refinanced the £80m interim bridge facility.
The group said the transaction provided New Look with a more flexible capital structure.
“The maturity date of the SSNs has been extended to 2024, reducing refinance risk,” the group said.
The initial maturity date was 2022.
Going forward Moleketi said with the economic outlook in its key markets unlikely to change in the near future, they believe this approach put them in the best possible position as and when conditions improved.
“Brait remains committed to its investment strategy, materially reducing the debt on its balance sheet, and driving performance in its companies, with the support of excellent management teams,” Moleketi said.