Profit from operations has increased from USD51.1 million to USD67.5 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. Headline earnings increased by 10.12% to 45.7cps (41.5cps). 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.
Dividend
After taking into consideration the present financial and cash position of the group, the board proposed a final dividend of USD10.39c per share. When added to the interim dividend of USD7.85c per share, this equates to an annual dividend of USD18.24c per share (USD18.24c per share).
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.
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