| Tue 28 Nov 2006, 7:19 | | Sekunjalo Investments Limited - Press Release |
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SKJ
SKJ
Sekunjalo Investments Limited - Press Release
Sekunjalo Investments Limited
Share code: SKJ
ISIN: ZAE000017893
Press Release
Date: 28 November 2006
Headline Earnings and Operating Profits rocket for Sekunjalo as Technology and
Innovation Driven Investments pay off
(Full results and commentary live on SENS)
JSE-listed Sekunjalo Investments Limited today announced a 644% increase in
headline earnings (R67,3 m), a 101% increase in operating profits (R92 m) and a
602% increase in headline earnings per share (21 cents) for the 12 months ended
31 August 2006, as the company"s diversification into Technology and Innovation
Driven Sectors delivered excellent results.
The technology and innovation driven investments include the ICT investments
(Business Intelligence, Financial Management and Hospital Information Systems
software companies); Aquaculture (abalone), Biotechnology (Bioclones) and
Financial Services (locally and internationally).
"This is the second consecutive year in which Sekunjalo"s headline earnings are
in excess of 300%. Sekunjalo has not only delivered in terms of its Broad Based
Empowerment status (being named the Top BEE company for 2006 by Financial Mail
and Empowerdex) it has also performed strongly, financially," said Dr Iqbal
Surve, Chairman and CEO.
"I am confident that the consistent growth in profitability will be recognised
by the investment community so that the gap between the increasing share price
and Company NAV of R2,51 per share is narrowed."
Sekunjalo Investments Limited is rapidly gaining in stature as a successful,
diversified, financially driven Group, with an aggressive strategy to achieve
growth in the value of investments. As a result, the NAV of the Company has
increased to R903,5 million against a value of R813,8 million (2005).
"This strong increase in NAV clearly reflects the company"s ability to identify,
acquire and grow suitable investments in line with its investment strategy."
"The Group continues to be lowly geared and financially strong, with a debt to
equity ratio of 14%. Sekunjalo has a global business presence with
representation in 3 countries, namely South Africa, Mauritius (headed by Raj
Gopaul), and the UK (headed by John Whatley). The appointment to the Board of
Mihe Goamab, The First, has given the Group an important entry into the SADC
countries of Namibia, Botswana and Angola," Dr Surve said.
Norman Noland, Deputy CEO, said, "The strategic shift made two years ago to
diversify into Technology and Innovation Driven Investments has been rapid and
successful. Our strategic shift was made to lessen reliance on the historical
investments in resource driven sectors such as fishing, as well as health care,
which by nature is seasonally volatile. The decision was further influenced by
the opportunities in Technology Driven Businesses which continually became
available as a result of Sekunjalo"s status as a leading empowerment company."
"Simultaneous with the speedy implementation of the diversification strategy the
Group has implemented a financially driven model encompassing structure, system
and processes and resources thus creating a successful platform for growth.
Executives, rich in experience and intellectual capital have been appointed at
corporate office and divisional level. The decision to build a disciplined
conglomerate is definitely succeeding."
Norman Noland said, "The hard work by a committed team over the last 2 years is
reaping rewards, Our ICT, financial services, aquaculture and biotechnology
operations were star performers. The biggest contributor to the increase at
operating profit level came from the Technology and Innovation Driven
Investments whilst the Group"s plans for fixing, consolidating and growing
historical investments shows strong signs of beginning to work.
"The Technology Driven Investments excluding the fair value of Bioclones
generated an operating profit of R 40 million," Noland said.
The company"s ICT interests housed in Sekunjalo Informatics and
Telecommunications Africa (SITCA) had exceeded expectations, positioning SITCA
for a proposed listing on the JSE. The four main operating ICT companies -
Synergy, FIOS, HST and Saratoga performed well. He singled out FIOS for special
commendation.
"FIOS is clearly carving out a "Market Leader Status" in its field and continues
to be sought out by the South African blue chips. The financial management
software company has delivered profits significantly ahead of those anticipated
and was recently successfully awarded a project with one of the country"s major
banks," Noland said.
Alongside SITCA, the Group"s Financial Services Division, Sekunjalo Capital, has
again produced excellent results. Noland said this is likely to continue as a
large share of the revenue is annuity derived.
The Group"s aquaculture division, consisting primarily of its Gansbaai abalone
farm, had an excellent year, validating the decision to expand in this sector.
Revenue is up and prospects are strong, based on the relative maturity (larger
organism asset base) of this operation which allows it to bring four and five
year old abalone to market. Future prospects are promising as South African
abalone continues to be highly prized abroad.
Manufacturing and Resource Based investments: Premier Fishing managed to hold
its own despite difficult fishing conditions and a once off non-recurring loss
in an international trading joint venture. Healthcare, as planned, had a
successful turnaround in the second half of the financial year. Both Premier
Fishing, because of its very successful long term lobster rights allocation and
Health Care, due to its JV"s with multinationals - are expected to contribute
significantly in the coming financial year.
This financial year has been one of building and cementing significant
partnerships with multinationals. In Pharmaceuticals JV"s have been developed
with Indian based Unichem and Orchid Pharma and UAE based Julphar. In ICT-
Health Care; IT- Siemens; BI - Cognos and Microsoft. In Biotechnology with
Swiss based Solidago AG. These partnerships are expected to contribute
significantly to the profits of the group in the years ahead.
Commenting on the prospects for the Group, Norman Noland said they are excellent
based on the growth of the Technology and Innovation Driven Investments.
Sekunjalo"s Business Intelligence (BI), financial consolidation and hospital
information software companies, currently used by 350 blue-chip clients, have
opportunities to expand into Government and the private and public sector.
Premier Fishing has been allocated one of the largest allocations in lobster in
the southern hemisphere, and its lobster is a preferred brand in export markets,
including the USA. In Biotechnology, Bioclones has two products licensed for
expansion into the global market- EPO (Repotin) into a US $12 billion market and
G-CSF (with a recent SA Government investment of US$ 5,3 million) into a US $ 3
billion market. Further products of the 22 global patents held by Bioclones are
being evaluated for commercialisation.
Norman Noland expressed his excitement and confidence about the future of the
Group and said that Sekunjalo will be making significant announcements in the
first quarter of 2007, two of which relate to its Technology and Innovation
Driven businesses.
Ends - contact numbers follow
Prepared by: Bruce Hetherington
Beachhead Media & Investor Relations
082 458 2199
Contact details: Sekunjalo Investments Limited
Zenariah Barends
Mobile: 082 441 0433
Dr Iqbal Surve (Chairman and CEO)
Mobile: 082 491 0179
Norman Noland (Deputy CEO)
Mobile: 083 626 4135
Date: 28/11/2006 07:19:59 AM Produced by the JSE SENS Department
