| Tue 11 May 2010, 16:48 | | SKJ - Sekunjalo Investments Limited - Sekunjalo shows strong recovery |
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SKJ
SKJ
SKJ - Sekunjalo Investments Limited - Sekunjalo shows strong recovery
Sekunjalo Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/006093/06)
Share code: SKJ & ISIN: ZAE000017893
("Sekunjalo" or "the company" or "the group")
SEKUNJALO SHOWS STRONG RECOVERY
Sekunjalo Investments Limited ("Sekunjalo" or "the Group" or "the Company"),
the top JSE listed Black investment holding company, today announced its
interim for results the period ending 28 February 2010.
KEY HIGHLIGHTS
* Ranked as South Africa`s Top Empowerment Company for 2010 by the
authoritative Financial Mail/Empowerdex Top Companies Awards;
* The total liabilities for the Group have decreased by 28% to reflect
better debt and risk management;
* The financing cost of debt has also declined in line with our strategy;
and
* The net cash effect of the Group has positively increased by R23
million.
Chief Executive Officer, Mr Khalid Abdulla said that the Group is currently
showing the expected signs of recovery with a profit of R3,6 million for the
period under review, despite the impact of the global economic crisis on
local and export markets.
Mr Abdulla said that reporting revenue is down compared to the prior period
due to the disposal of one of the IT businesses as well as the impact of the
stronger rand on exports in the fishing sector. He was satisfied that the
fishing, aquaculture, ICT and pharmaceutical businesses are showing
satisfactory performances for the interim period. He noted that the Group is
confident that the strategic initiatives implemented by the divisions will
deliver results in line with expectations.
It should be noted that, historically, the group has consistently performed
better in the second half of the financial year due to the cyclical nature of
it`s businesses.
Compared to the last financial year-end, the Group`s net asset value has
improved.
Premier Fishing SA (Pty) Ltd ("Premier Fishing") has performed satisfactorily
despite the effects of the stronger rand on sales and the depressed
international prices due to the global economic slowdown. The restructuring
process of Premier Fishing has successfully been completed and a strong
dynamic management team is in place. Interim results show Premier Fishing
making an operating profit of R4,1 million in comparison to its breakeven
results in the previous interim period.
Khalid Abdulla noted that Premier Fishing is well positioned to take
advantage of future growth opportunities due to its strong empowerment
credentials and low gearing. Management is continually looking for new
opportunities to expand their fishing portfolio and maintain good relations
with various industry stakeholders.
Sekunjalo Technology Solutions Group (Pty) Ltd, ("Sekunjalo TSG") is a wholly
owned subsidiary of Sekunjalo that focuses on acquiring and growing niche-
market technology companies.
Khalid Abdulla said that Sekunjalo TSG continues to perform well, with
subsidiaries that are cash positive and has been a strong contributor to the
results. The Sekunjalo TSG Group has performed well despite the failure of
the Gauteng Department of Health ("GDOH") to honour its obligations in its
contract with Amethst (Pty) Ltd ("Amethst").
Revenue is well ahead of target for the period under review. The decline in
revenue in comparison with the previous period, is mainly due to the sale of
one of the subsidiary companies through a management buy-out and the
cancelation of the GDOH`s contract.
The total debt in the Sekunjalo TSG Group has decreased by 34%, indicating
that the debt management within the Sekunjalo TSG Group has improved as well
as the Group`s ability to fund its own operations.
Khalid Abdulla noted that the investment in Digital Matter (Pty) Ltd has
exceeded expectations with revenues increasing by 40%. Digital Matter has
proven itself in the market by acquiring significant contracts with reputable
clients.
Health System Technologies (Pty) Ltd ("HST"), a Hospital Information System
("HIS") provider, continues to rollout HIS to the Provincial Government
hospitals. The business has performed consistently well over the past few
years, with the exception of Amethst due to the cancellation of the contract
due to non-payment by the GDOH.
British Telecom Communication Services South Africa Pty Ltd ("BT"), one of
the world`s leading providers of communication solutions and services
operating in 170 countries, continues to perform well, despite the economic
climate. Its principal activities include the provision of networked IT
services globally; local, national and international telecommunications
services to customers for use at home, work and on the move; broadband and
internet products and services; and converged fixed/mobile products and
services.
Khalid Abdulla said that the value of the BT investment had increased
significantly in comparison to the previous reporting period and it is well
positioned to grow aggressively over the next few years.
The Health Care Division continues to show increased efforts, with its strong
management team and a good portfolio of products, by securing its supply
chain, throughput and driving the implementation of its sales strategy. In
the current year, the Group commenced the launching of consumer products to
pharmaceutical retail outlets. It should be noted that historically
healthcare businesses also consistently performed better in the second half
of the financial year due to the cyclical nature of this business.
The Group has also been awarded a public tender on its ethical products
during this period. Management consistently pursue opportunities to expand
its current portfolio which will provide a better platform for future growth.
Bioclones (Pty) Ltd ("Bioclones") has 22 global patents in the areas of novel
technologies, infectious disease and cancer treatment molecules.
Bioclones is seeing improved uptake in both the private and state sectors due
to the competitive price of the locally manufactured product,
RepotinRegistered.
Bioclones continues to prepare for the company`s listing of the company on an
international stock exchange subject to market conditions. Although investor
appetite is slowly improving abroad, market conditions are not yet optimal.
The company is carefully monitoring the economic conditions to ensure the
most favourable valuation for the potential listing of Bioclones.
FUTURE PROSPECTS
Khalid Abdulla indicated that Sekunjalo is now firmly established as the most
empowered company on the JSE and is continuously looking for strategic
opportunities. With low gearing the Group is well positioned to fund future
growth of its businesses and to unlock value in its underlying investments.
He stated that the Aquaculture division is being appropriately resourced to
take advantage of the expansion in the Far Eastern markets. The
restructuring of the pelagic division within the fishing business will
revitalise the pelagic sector.
He also noted that the strong recovery in the dermatological and
pharmaceutical division will start reaping rewards going forward.
Abdullah concluded "The continuous investment in our employees, the community
and our sustainability programmes has enabled the Group to actively be
involved in improving the economy of the country. Sekunjalo has strong B-BBEE
credentials and has become a partner of choice to multinationals. Our World
Economic Forum Global status provides a networking platform with the
international business community which unlocks strategic partners and
opportunities for the Group"
Contact details: Sekunjalo Investments Limited
Khalid Abdulla, CEO or Cherie Hendricks, CCO
Email: khalid@sekunjalo.com or cherieh@sekunjalo.com
Tel: 27 21 419 0124
Fax: 27 21 419 0731
11 May 2010
Date: 11/05/2010 16:48:02 Produced by the JSE SENS Department.
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