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BAT
BRAIT
BAT - Brait - Reviewed group results for the year ended 31 March 2007
Brait S.A.Societe Anonyme
(Incorporated in Luxembourg)
Registration number: RC Luxembourg B-13861
Share code: BAT
ISIN code: LU0011857645
("Brait")
Reviewed group results for the year ended 31 March 2007
Key performance measures
- Earnings
Profit from operations up by 32% to US$67,5 million (ZAR475,4 million, up
by 45%)
Attributable earnings up by 2% to US$48,1 million (ZAR338,8 million, up by
13%)
Headline earnings up by 10% to US$45,7 million (ZAR321,9 million, up by
21%)
- Return on US dollar equity 25% (ZAR equity: 41%)
- Annual dividend distribution unchanged at 18,24 US cents per share
(133,34 SA cents per share, up by 12%)
- NAV at 166,5 US cents per share, up by 7% (ZAR1 208,0 cents per share, up
by 26%)
- Assets under Management (fee earning) up by 28% from US$1,05 billion to
US$1,34 billion (up by 50% from ZAR6,46 billion to ZAR9,69 billion)
Salient features
for the year ended 31 March
Supplementary Rand information**
Audited* Reviewed Reviewed Audited*
2006 2007 2007 2006
ZARm ZARm US$m US$m Change
326,9 475,4 Profit from operations 67,5 51,1 32,2%
250,2 248,5 Private equity 35,3 39,1
5,8 45,1 Corporate finance 6,4 0,9
8,3 43,7 Specialised funds 6,2 1,3
62,6 138,1 Group investments 19,6 9,8
(15,4) (45,1) Finance costs (6,4) (2,4)
23,9 (21,8) Capital items (3,1) 3,7
335,4 408,5 Profit before taxation 58,0 52,4 10,7%
(17,3) (48,6) Taxation (6,9) (2,7)
318,1 359,9 Profit for the year 51,1 49,7 2,8%
(17,3) (21,1) Minority interest (3,0) (2,7)
300,8 338,8 Attributable earnings 48,1 47,0 2,3%
PERFORMANCE MEASURES
Headline earnings per
share
291,7 314,1 - Basic (cents) 44,6 45,8 (2,6%)
256,7 301,5 - Diluted (cents) 42,8 40,3 6,2%
Attributable earnings
per share
331,9 330,4 - Basic (cents) 46,9 51,9 (9,6%)
292,1 317,0 - Diluted (cents) 45,0 45,6 (1,3%)
Dividends per share
119,32 133,34 (cents) 18,24 18,24 -
51,51 59,40 - Interim paid 7,85 7,85
67,81 73,94 - Final proposed 10,39 10,39
Net asset value per
961,6 1 208,0 share (cents) 166,5 155,7 6,9%
45,4% 41,3% Return on equity 24,7% 45,9%
FINANCIAL STATISTICS
2 536,9 3 084,6 Market capitalisation 425,2 410,8 3,5%
101,5 105,6 Shares in issue (m) 105,6 101,5 4,0%
Weighted average
shares in issue
90,6 102,5 - Basic (m) 102,5 90,6 13,1%
103,0 106,9 - Diluted (m) 106,9 103,0 3,8%
Closing share price
2 500,0 2 920,0 (cents per share) 402,5 404,8 (0,6%)
ZAR/US Dollar exchange
rate
6,1765 7,2550 - closing 0,1378 0,1619
6,3979 7,0435 - average 0,1420 0,1563
*As restated - a schedule of restatements disclosed in the Annual Financial
Statements.
**The disclosure above is for information purposes and does not form part
of the group financial statements.
Abridged Group income statements
for the year ended 31 March
Supplementary Rand information
Audited* Reviewed Reviewed Audited*
2006 2007 2007 2006
ZARm ZARm Notes US$m US$m
293,1 517,7 Revenue 73,5 45,8
307,1 276,1 Other income 39,2 48,0
Total revenue and other
600,2 793,8 income 112,7 93,8
(272,5) (333,2) Operating expenses (47,3) (42,6)
(0,8) 14,8 Income from associates 2,1 (0,1)
326,9 475,4 Profit from operations 3 67,5 51,1
(15,4) (45,1) Finance costs (6,4) (2,4)
23,9 (21,8) Capital items 4 (3,1) 3,7
335,4 408,5 Profit before taxation 58,0 52,4
(17,3) (48,6) Taxation (6,9) (2,7)
318,1 359,9 Profit for the year 51,1 49,7
Attributable to:
17,3 21,1 - minority shareowners 3,0 2,7
- equity holders of the
300,8 338,8 parent 48,1 47,0
Dividends per share
119,32 133,34 (cents) 18,24 18,24
51,51 59,40 - Interim paid 7,85 7,85
67,81 73,94 - Final proposed 10,39 10,39
Basic attributable
earnings per share
331,9 330,4 (cents) 46,9 51,9
Diluted earnings per
292,1 317,0 share (cents) 45,0 45,6
*As restated - a schedule of restatements disclosed in the Annual Financial
Statements.
Abridged group balance sheets
as at 31 March
Supplementary Rand information
Audited* Reviewed Reviewed Audited*
2006 2007 2007 2006
ZARm ZARm Notes US$m US$m
ASSETS
945,5 985,2 Non-current assets 135,8 153,1
898,0 933,7 Investments 5 128,7 145,4
47,5 51,5 Other non-current 7,1 7,7
assets
962,4 1 336,4 Current assets 184,2 155,8
Cash and cash
575,8 571,0 equivalents 6 78,7 93,2
109,9 306,9 Investments 42,3 17,8
234,1 321,4 Loans and advances 44,3 37,9
42,6 137,1 Other 18,9 6,9
1 907,9 2 321,6 Total assets 320,0 308,9
EQUITY AND LIABILITIES
975,8 1 276,1 Equity and reserves 175,9 158,0
612,7 645,8 Non-current liabilities 89,0 99,2
Redeemable preference
450,3 457,1 shares 7 63,0 72,9
Other non-current
162,4 188,7 liabilities 26,0 26,3
319,4 399,7 Current liabilities 55,1 51,7
79,1 157,4 Loans and advances 21,7 12,8
240,3 242,3 Other 33,4 38,9
Total equity and
1 907,9 2 321,6 liabilities 320,0 308,9
Net asset value per
961,6 1 208,0 ordinary share (cents) 166,5 155,7
*As restated - a schedule of restatements disclosed in the Annual Financial
Statements.
Abridged group cash flow statements
for the year ended 31 March
Reviewed Audited*
2007 2006
US$m US$m
Cash flows from:
Operating activities** 29,8 5,7
Dividends received 7,4 1,7
Interest received 3,6 5,5
Finance costs (6,4) (2,4)
Currency hedge cost (0,4) (3,5)
Taxation paid (2,8) (2,2)
Change in working funds (15,1) 6,8
Cash generated from operating activities 16,1 11,6
Cash flows generated from investing activities 4,2 22,0
Cash flows generated from operating and investing
activities 20,3 33,6
Dividends paid (23,4) (19,8)
Cash flows from financing activities (3,7) 61,7
Net (decrease)/increase in cash and cash
equivalents (6,8) 75,5
Effects of exchange rate changes on cash and cash
equivalents (7,7) (0,1)
Cash and cash equivalents at beginning of year 93,2 17,8
Cash and cash equivalents at end of year 78,7 93,2
*As restated - a schedule of restatements disclosed in the Annual Financial
Statements.
**Includes Bayport`s net interest received.
Group statements of changes in equity
for the year ended 31 March
Attributable to equity holders of the parent
Share Foreign
capital currency
and Legal Equity translation Retained
premium reserves reserves reserves reserves
US$m US$m US$m US$m US$m
Balance at 31 March
2005 66,6 2,6 2,6 (30,1) 72,0
Net translation
adjustments - - - 0,7 -
Restructuring of
subsidiary - - - - (0,3)
Sale of interest in
subsidiary - - - - -
Bonus shares issued 12,3 - - - -
Treasury shares (12,3) - - - -
Delivered share
scheme shares 9,4 - - - -
Profit for the year - - - - 47,0
Foreign currency
adjustment
on capital loan - - 0,2 - -
Share entitlements - - 0,7 - -
Ordinary dividends
paid - - - - (19,8)
Transfer from
capital to reserves (40,0) - - - 40,0
Balance at 31 March
2006 36,0 2,6 3,5 (29,4) 138,9
Net translation
adjustments - - - (6,5) -
Restructuring of
subsidiary - - - - -
Acquisition of
subsidiary - - - - -
Treasury shares (7,7) - - - -
Delivered share
scheme shares 6,8 - - - -
Profit for the year - - - - 48,1
Foreign currency
adjustment
on capital loan - - (2,0) - -
Share entitlements - - 0,5 - -
Ordinary dividends
paid - - - - (23,4)
Transfer to - 0,1 - - (0,1)
reserves
Balance at 31 March
2007 35,1 2,7 2,0 (35,9) 163,5
Total
equity
Minority and
interest reserves
US$m US$m
Balance at 31 March 2005 1,4 115,1
Net translation adjustments 0,8 1,5
Restructuring of subsidiary (0,3) (0,6)
Sale of interest in subsidiary 1,8 1,8
Bonus shares issued - 12,3
Treasury shares - (12,3)
Delivered share scheme shares - 9,4
Profit for the year 2,7 49,7
Foreign currency adjustment
on capital loan - 0,2
Share entitlements - 0,7
Ordinary dividends paid - (19,8)
Transfer from capital to reserves - -
Balance at 31 March 2006 6,4 158,0
Net translation adjustments (0,9) (7,4)
Restructuring of subsidiary (0,4) (0,4)
Acquisition of subsidiary 0,4 0,4
Treasury shares - (7,7)
Delivered share scheme shares - 6,8
Profit for the year 3,0 51,1
Foreign currency adjustment
on capital loan - (2,0)
Share entitlements - 0,5
Ordinary dividends paid - (23,4)
Transfer to reserves - -
Balance at 31 March 2007 8,5 175,9
Group segmental reports
for the year ended 31 March
Supplementary Rand information
Audited* Reviewed Reviewed Audited*
2006 2007 2007 2006
ZARm ZARm US$m US$m
BUSINESS ANALYSIS
Segment income
293,1 517,7 Revenue 73,5 45,8
70,4 173,3 - Private equity 24,6 11,0
50,5 55,6 - Corporate finance 7,9 7,9
33,3 74,0 - Specialised funds 10,5 5,2
138,9 214,8 - Group investments 30,5 21,7
307,1 276,1 Other income 39,2 48,0
293,7 207,1 - Private equity 29,4 45,9
(0,6) - - Corporate finance - (0,1)
8,3 15,5 - Specialised funds 2,2 1,3
5,7 53,5 - Group investments 7,6 0,9
600,2 793,8 Total segment income 112,7 93,8
326,9 475,4 Segment result 67,5 51,1
250,2 248,5 - Private equity 35,3 39,1
5,8 45,1 - Corporate finance 6,4 0,9
8,3 43,7 - Specialised funds 6,2 1,3
62,6 138,1 - Group investments 19,6 9,8
(15,4) (45,1) Finance costs (6,4) (2,4)
23,9 (21,8) Capital items (3,1) 3,7
335,4 408,5 Profit before taxation 58,0 52,4
1 834,4 2 219,4 Segment assets 305,9 297,0
735,0 1 017,9 - Private equity 140,3 119,0
1,9 69,7 - Corporate finance 9,6 0,3
120,0 166,1 - Specialised funds 22,9 19,7
977,5 965,7 - Group investments 133,1 158,0
73,5 102,2 Other 14,1 11,9
1 907,9 2 321,6 Total assets per balance sheet 320,0 308,9
323,7 411,4 Segment liabilities 56,7 52,5
59,3 82,7 - Private equity 11,4 9,6
16,1 10,2 - Corporate finance 1,4 2,6
6,8 13,8 - Specialised funds 1,9 1,1
241,5 304,7 - Group investments 42,0 39,2
608,4 634,1 Other 87,4 98,4
Total liabilities per balance
932,1 1 045,5 sheet 144,1 150,9
1 510,7 1 808,0 Segment net assets 249,2 244,5
675,7 935,2 - Private equity 128,9 109,4
(14,2) 59,5 - Corporate finance 8,2 (2,3)
113,2 152,3 - Specialised funds 21,0 18,6
736,0 661,0 - Group investments 91,1 118,8
(534,9) (531,9) Other (73,3) (86,5)
Total net assets per balance
975,8 1 276,1 sheet 175,9 158,0
GEOGRAPHICAL ANALYSIS
Segment income
293,1 517,7 Revenue 73,5 45,8
138,9 228,9 - International 32,5 21,7
154,2 288,8 - South Africa 41,0 24,1
307,1 276,1 Other income 39,2 48,0
60,6 102,9 - International 14,6 9,5
246,5 173,2 - South Africa 24,6 38,5
600,2 793,8 Total segment income 112,7 93,8
326,9 475,4 Segment result 67,5 51,1
62,0 143,7 - International 20,4 9,7
264,9 331,7 - South Africa 47,1 41,4
(15,4) (45,1) Finance cost (6,4) (2,4)
23,9 (21,8) Capital items (3,1) 3,7
335,4 408,5 Profit before taxation 58,0 52,4
Segment assets
761,6 906,3 - International 124,9 123,3
1 146,3 1 415,3 - South Africa 195,1 186,6
1 907,9 2 321,6 Total assets per balance sheet 320,0 308,9
*As restated - a schedule of restatements disclosed in the Annual Financial
Statements.
Notes to the financial statements for the year ended 31 March
The results for the year ended 31 March 2007 have been reviewed by the
group`s auditors, Deloitte & Touche, and their unqualified opinion is
available for inspection at the company`s registered office.
1. Basis for preparation
The financial statements of the group are prepared in accordance with
International Financial Reporting Standards (IFRS). The abridged financial
statements are presented in accordance with IAS 34. The accounting policies
and methods of computation are consistent with those applied in the
previous year.
2. Supplementary Rand information
The balance sheets and income statements of the group have also been
presented in Rands for the convenience of South African stakeholders in the
group. The supplementary Rand results have been converted from the US$
functional results using a closing rate of ZAR7,3 to US$1 (2006: ZAR6,2 to
US$1) for the balance sheets and an average rate of ZAR7,0 to US$1 (2006:
ZAR6,4 to US$1) for the income statements.
Reviewed Audited*
2007 2006
US$m US$m
3. Profit from operations include:
Dividends received 6,2 2,3
Interest received 30,5 23,3
Depreciation (0,9) (0,6)
Related party transactions
- Interest received 0,4 1,0
- Interest paid (0,4) (1,2)
- Fees paid (1,5) (0,6)
- Key management (includes directors` (5,3) (5,0)
remuneration)
4. Capital items comprise:
Net currency hedge cost (0,9) (2,2)
Fair valuation adjustment of financial liability (6,9) (1,4)
Fair valuation adjustment of financial asset 4,4 1,8
Loss on restructuring of subsidiary (0,1) -
Profit on disposal of interest in subsidiary - 2,9
Profit on disposal of property, buildings and
fittings - 2,8
Profit on disposal of investment 0,4 -
Realisation of translation adjustment - (0,2)
Total capital items (3,1) 3,7
5. Investments
Included in investments, are investments in
unlisted associates:
- carrying value 1,9 11,6
- directors` valuation 6,8 11,6
6. Cash and cash equivalents
Bank balances 23,0 36,8
Short term treasury instruments 55,7 56,4
78,7 93,2
7. Redeemable cumulative preference shares
Opening balance 72,9 -
Issue of preference shares - 72,9
Effects of exchange rate changes taken to equity (9,9) -
Closing balance 63,0 72,9
Brait South Africa Limited raised US$72,9 million
(ZAR450 million) of preference share capital
during FY06 to provide additional capital to
leverage the group`s internal growth strategy.
450 000 (four hundred and fifty thousand)
cumulative redeemable preference shares were
issued at a par value of ZAR 0,01 and a premium
of ZAR 999,99 per share. These shares carry a
dividend of 78% of the South African prime rate
of interest and are redeemable in four tranches
on 31 July of each year commencing in 2010 until
2013. Brait South Africa Limited has an option to
effect early redemption.
8. Related party balances
- Liabilities (7,9) (14,5)
- Assets 3,8 11,5
9. Contingent liabilities, commitments and
subordinated loans
9.1 Contingencies
Sureties and guarantees 0,1 0,2
9.2 Commitments
Commitments to invest in funds and proprietary
investments 60,7 34,9
Other 1,0 1,1
Rental commitments 3,5 5,1
Within one year 0,8 1,1
Between one and five years 2,7 4,0
9.3 Subordinated loans 3,3 5,3
10. Interest-bearing liabilities
All liabilities are interest bearing except for
US$22,8 million (2006: US$37,8 million) in
respect of accounts payable, accruals, provisions
and deferred taxation.
11. Headline earnings
Attributable earnings 48,1 47,0
Headline earnings adjustment (2,4) (5,5)
- Loss/(profit) on restructuring of subsidiary 0,1 (2,9)
- Profit on sale of non-current assets held for
sale (2,5) (2,8)
- Realisation of translation adjustment - 0,2
Headline earnings 45,7 41,5
12. Subsequent events
The group is considering a proposal from Bayport`s management regarding the
acquisition of the group`s 41,66% equity holding and loans in Bayport. No
further events have taken place since 31 March 2007 and the date of the
release of this report, which would have a material impact on either the
financial position or operating results of the group.
*As restated - a schedule of restatements disclosed in the Annual Financial
Statements.
Commentary
Group profile
Brait is an international investment and financial services group focused
on private equity, specialised funds, corporate finance and strategic
investments. It is listed on the Luxembourg, London and the JSE Securities
Exchanges, with shareowners` funds of US$175,9 million at 31 March 2007.
Brait`s earnings are derived from:
* Private equity management fees and investment returns
* Specialised funds management fees and investment returns
* Corporate and debt advisory services
* Group investment returns.
Financial results
Earnings
* Profit from operations - US$67,5 million
Profit from operations has increased from
US$51,1 million to US$67,5 million for the year. Private Equity remained
the largest contributor to this result with significant increases recorded
in Corporate Finance, Specialised Funds and Group Investments.
* Finance costs - US$6,4 million
The increase in finance costs of US$4,0 million is largely attributable to
the redeemable preference shares of US$72,9 million (ZAR450 million) issued
at the end of the previous financial year.
* Capital items - US$3,1 million net loss
Capital items comprise:
* Net currency hedge - US$0,9 million loss
Brait has consistently applied its policy of hedging a significant portion
of the group`s South African tangible assets into US dollars, which is the
functional currency of Brait S.A.. The net loss on the hedge is after
recognising a profit on the revaluation of the five year call option and
currency losses on the unhedged portion of ZAR investments by the group.
Fair value adjustment of financial liability - US$6,9 million loss
The sale of 26% of Brait South Africa in the 2005 financial year to the
group`s black economic empowerment partner (Sitogo Holdings (Proprietary)
Limited) has not been recorded as a sale as it has given rise to a
financial instrument which has been disclosed in terms of IAS 32 (Financial
Instruments: Disclosure and Presentation) and measured in terms of IAS 39
(Financial Instruments: Recognition and Measurement). The fair value
adjustment of the financial instrument was a loss of US$6,9 million and
substantially equates to the portion of earnings that would have been
recognised as being attributable to the minority shareowners had the sale
been recognised as such.
* Fair value adjustment of financial asset - US$4,4 million profit
Pursuant to the sale of 26% of Brait South Africa, an equity investment by
Brait S.A. in Sitogo Holdings has given rise to a financial instrument,
which has been disclosed in terms of IAS 32 and measured in terms of IAS
39. The fair value adjustment of the financial instrument was an unrealised
gain of US$4,4 million and equates to the increase in fair value attached
to the specific class of shares held.
* Taxation - US$6,9 million
The taxation charged has increased from US$2,7 million to US$6,9 million
and is largely attributable to the raising of a deferred taxation liability
in respect of unrealised investment gains in Brait South Africa Limited.
* Return on equity - 24,7%
The US dollar return on average shareowners` funds for the year was 24,7%
compared with 45,9% achieved in the previous year. The annual ROE has
exceeded the group`s long-term target of 20% in US dollars, but is down on
last year largely due to the impact of Rand weakness. In Rand terms, the
group`s ROE is 41%.
The group`s net asset value in US dollars increased by 26,1% after adding
back dividends paid.
Segmental review
Private Equity
Private Equity`s earnings for the year have been driven primarily by value
recognition in Brait III, further growth in the group`s proprietary
investing income and management fees earned on Brait IV. The weakening of
the Rand has had a negative impact on Rand based investment income. Revenue
and other income of US$54,0 million was recognised during the period,
slightly down on US$56,9 million in the prior year. Profit from operations
decreased from US$39,1 million to US$35,3 million after incurring
additional abnormal costs of US$4,0 million associated with the capital
raising of Brait IV. Return on capital employed for the year in private
equity was 28,2% on average capital employed of US$125,2 million.
The group has been well positioned this year to take advantage of the
opportunities in the private equity market and South Africa`s positive
macro-economic and capital markets environment. Brait has improved its
proud 16 year investment record and maintains its position as a leading
independent private equity fund manager focusing on investments in Southern
Africa. Brait III, South Africa`s largest private equity fund at the time,
promises to complement Brait`s earlier successes with Brait I and Brait II
with a current gross internal rate of return, in both US Dollars and Rand,
exceeding 30%. The final closing of Brait IV in December 2006 with
commitments of US$880 million, including a US$200 million debt facility,
was another first for Brait, being the largest private equity fund raised
in Africa to date. Deal flow has been strong and, given the experience of
the management team, Brait is positively encouraged by the potential for
Brait IV.
Some of the notable investment transactions concluded during the period
under review were:
* the successful IPO of Kelly Group in early April 2007 on the JSE
Securities Exchange;
* the refinancing of Brait III`s shareholder loans in Pepkor, resulting
in a significant cash return for the fund;
* a further private placement of 24% of Brait III`s Net 1 shares at 6,8
times cost; and
* Brait IV`s investment in Consol Glass, a US$0,9 billion (ZAR6,6
billion) transaction.
Private Equity investment earnings are by nature volatile and influenced by
timing and market conditions. They incorporate income distributions as well
as realised and unrealised fair value based-uplifts. Brait Private Equity
is ideally placed to leverage off the Brait IV investment opportunities and
the Brait III value recognition prospects.
Specialised Funds
Specialised Funds income comprises fees earned from the management of third-
party capital in the group`s hedge funds and investment returns generated
from Brait`s own seed capital. Revenue and other income increased by 95% to
US$12,7 million from US$6,5 million the previous year. Profit from
operations increased by 377% to US$6,2 million from US$1,3 million the
previous year. Return on capital employed for the year in Specialised Funds
was 31,5% based on an average capital employed of US$20,0 million.
This year has been an exciting time for active managers in South Africa,
with the equity market continuing to offer substantial returns. The
continued boom in commodities and the impressive South African growth story
in government infrastructure spend and consumer behaviour has attracted an
ever increasing foreign involvement in the market, increased IPO and
private equity activity and many other opportunities.
Over the last five years, Specialised Funds has focused on building
performance consistency and infra-structure capability within its business,
to offer institutional investors a cash plus product that is complementary
to traditional equity exposure. This has been driven by a focus on
disciplined application of the investment process and continued enhancement
of all business management requirements. The cornerstone of Brait`s
strategy is managing risk, whether balancing investment opportunity against
risk to capital, or in designing checks and balances to mitigate non-
investment risks.
Assets under management increased by 27% since 31 March 2006 to US$652,1
million, spread across 20 hedge funds, chosen by the multi-management team
for their ability to balance risk against investment opportunity. The group
has secured an additional ZAR3,4 billion in capacity and plans to add to
this during the year as it searches for new sources of alpha.
Investment performance during the year was satisfactory, with Brait
Absolute SA Fund (Brait Absolute) continuing to outperform its three-year
rolling return objective, returning 7,4% above cash and 9,9% ahead of
inflation while limiting volatility to 2,9% per annum. We are pleased that
Brait Absolute`s correlation and beta to the All Share Index remained very
low at 0,35 and 0,07 respectively.
Corporate Finance
Profit from operations increased significantly to US$6,4 million from
US$0,9 million in the previous year with the main contributor being
Advisory Debt Services.
This positive result was achieved by capitalising on Brait`s Euro bond
advisory services, in particular, targeting suitable listed and unlisted
bond and leverage capitalisation opportunities and leveraging off Brait`s
leadership position in Private Equity and Alternative Funds Management.
Group Investments
Profit from operations from the group`s strategic investments increased by
100% to US$19,6 million from US$9,8 million and delivered a return on
capital employed of 17,6% for the year.
Bayport maintained its before tax profit growth, increasing it by 21% from
US$6,4 million to US$7,7 million. Bayport has grown its advances book from
US$33,8 million to US$45,3 million and continues to expand its micro-
lending and financial services operations in sub-Saharan Africa. The group
has received a proposal from Bayport`s management regarding the acquisition
of the group`s interest in Bayport which is being considered at present.
The group`s South African micro-lending interest held through Capital
Alliance Finance was realised during the financial year resulting in a net
profit to the group of US$2,1 million.
Income from treasury operations has contributed significantly to group
investments income. The treasury funds include the portion of the proceeds
of the preference share capital raised in the group which have been placed
with the Brait Absolute Fund.
During the previous financial year the group established, as a joint
venture, an independent mezzanine fund management business. At 31 March
2007, the fund had concluded investments of US$9,6 million with undrawn
committed capital of US$50,8 million.
PROSPECTS
2007 has been an important year in the development of Brait following
significant commitments of new capital secured for Brait`s Private Equity
operations and its Specialised Funds business. This capital has materially
raised the group`s annuity earnings platform and its potential for
substantial medium to long-term investment income growth. Both these
business units have entrenched their leading market positions in South
Africa. Elsewhere in the group, several new organic business initiatives
have been initiated which are also expected to increase Brait`s sustainable
growth in alternative asset management.
Macro-economic fundamentals in South Africa as well as the outlook for
investment markets are positive. It should be recognised, though, that
Brait`s earnings are dependent on specific investment performance and the
irregular occurrence of transactions which may cause lumpy revenue
recognition, over the short term.
As long as positive fundamental market characteristics continue, the
prospects for delivering on ROE and earnings growth targets in Brait remain
encouraging over the long term. Additionally it should be noted that Brait
is in a phase of expanding its investment base and these investments are of
a long term nature. Accordingly, expectations of significant year-on-year
increases in the short term should be moderated.
Dividend
The board holds the view that dividend distributions are an important part
of long-term shareowners` wealth creation and an indication of the health
of the group. Accordingly, it has resolved to make regular dividend
payments.
After taking into consideration the present financial and cash position of
the group, the board proposes to pay a final dividend of 10,39 US cents per
share. When added to the interim dividend of 7,85 US cents per share, this
equates to an annual dividend of 18,24 US cents per share (2006: 18,24 US
cents per share).
Shareowners registered on the South African register are advised that the
final dividend is 73,94 ZAR cents per share, and has been determined using
the Rand/US Dollar exchange rate in Luxembourg at 12h00 on 29 May 2007.
Dividend notice
Members will be asked to approve the following dividend declarations at the
annual general meeting of the company to be held on Wednesday, 25 July 2007
in Luxembourg.
* The declaration of the final dividend of 10,39 US cents per share in
respect of the year ended 31 March 2007 and endorse the payment of the
interim dividend of 7,85 US cents per share, paid on 27 November 2006;
and
* For South African resident shareholders registered on the South
African register, the declaration of the final dividend of 73,94 ZAR
cents per share in respect of the year ended 31 March 2007 and endorse
the payment of the interim dividend of 59,40 ZAR cents per share, paid
on 27 November 2006.
If approved by the shareowners, payment of the final dividend will be
effected on Monday, 13 August 2007 to shareowners registered as such on the
record date, Friday, 10 August 2007. The last day to trade "cum dividend"
will be Thursday, 2 August 2007 and the share will commence trading "ex
dividend" on Friday, 3 August 2007. Share certificates may not be
dematerialised between Friday, 3 August 2007 and Friday, 10 August 2007
both days inclusive.
Non-resident shareowners registered on the South African register, who
prefer their dividends to be paid in US dollars, are advised to inform
their CSDPs/brokers accordingly and provide their banking details to their
CSDPs/brokers by the required deadline in terms of their agreements entered
into with their CSDPs/brokers.
For and on behalf of the board
ME King AC Ball
Chairman Group Chief Executive
29 May 2007
Administration
Registered office
Brait S.A.
180, rue des Aubepines
L-1145, Luxembourg
Tel: +352 269255 3297
Fax: +352 269255 3642
Brait South Africa Limited
9 Fricker Road
Illovo Boulevard, Illovo, Sandton
South Africa
Tel: +27 11 507 1000
Fax: +27 11 507 1001
Listing agent
Dexia Banque Internationale a Luxembourg
69, route d`Esch
L-2953, Luxembourg
Tel: +352 45901
Fax: +352 45902010
Transfer agent/Registrar
United Kingdom
Capita IRG plc
Bourne House
34 Beckenham Road
Beckenham
Kent, BR3 4TU
United Kingdom
Tel: +44 208 639 2157
Fax: +44 208 639 2342
South Africa
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street
Johannesburg, 2001
or
PO Box 61051, Marshalltown, 2107
Tel: +27 11 370 5000
Fax: +27 11 668 5200
Legal advisors to the company
Elvinger, Hoss & Prussen
2, Place Winston Churchill
L-1340, Luxembourg
Tel: +352 446 6400
Fax: +352 44 2255
Independent auditors
Deloitte & Touche S.A.
560, rue de Neudorf
L-2220
Luxembourg
Domiciliary agent and registrar
Experta Luxembourg S.A.
180, rue des Aubepines
L-1145, Luxembourg
Tel: +352 269255 3297
Fax: +352 269255 3642
JSE and Lse issuer name and code
Issuer long name - Brait S.A.
Issuer code - BRAIT
Instrument alpha code/
Ticker symbol - BAT
ISIN - LU 0011857645
Directors
ME King (Chairman)+*, AC Ball*, PAB Beecroft+=, JE Bodoni+#, AD Campbell*,
BI Childs=, JA Gnodde*, RJ Koch+=, AM Rosenzweig+**, CJ Tayelor*, HRW
Troskie+**, SJP Weber#, PL Wilmot+*,
+Non-executive, *South African #Luxembourgish =British **Dutch
Financial information for the year ended 31 March 2007
is also available on the Brait website at www.brait.com
Date: 04/06/2007 08:00:03 Produced by the JSE SENS Department.
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