• Market Watch

Virgin Active owner Brait gets investee boost, but NAV halves after hefty shareholder lift

• 23 Hours Ago - 2024-11-15 00:00:00

Brait, the private equity firm partly owned by billionaire Christo Wiese, has reported that it got a boost from its underlying portfolio in its six months to end September. But its net asset value (NAV) per share still more than halved in the wake of a hefty recapitalisation in June that more than doubled the number of its shares in issue.
The investment firm, which has stakes in gym chain Virgin Active, fast-moving consumer goods group Premier, and UK fashion retailer New Look, said on Wednesday that its NAV per share fell to 310c to end September from 684c a year before.
Nevertheless, the total value of its investments still increased just over 9% to R16.57 billion in the period.
The NAV was driven by increases in the value of its underlying investments as well as its issuance of more than 2.54 billion new shares in a rights offer that was concluded in August, which raised R1.5 billion as it looks to buy more time to unlock value from an underlying portfolio it plans to exit.
Premier, of which Brait holds just over a third, was its best performing asset thanks to a 28% jump in its asset value in the period to R4.6 billion, driven by a share price rally for 200-year-old food producer.
"The last six months have been a very significant period for the business ... we've done a recapitalisation ... and since then, the share price has trebled," Brait CEO Peter Hayward-Butt told News24.
"The rights issue price was 59c, the share price now is roughly 185c ... so, hopefully, the market sees it was a good thing to do."
Virgin Active, which comprises 61% of its assets, saw active members increase 6% year-on-year to about 1.024 million with revenue, including from the Kauai food chain, rising 23%.
The increase in revenue was driven by Italy (which delivered a 19% increase in revenue year-on-year), followed by South Africa (16%) and Singapore (34%), though this was offset by lower growth in the UK of 11%.
The group reported 634 000 active members in southern Africa at the end of September, from 606 000 in the prior comparative period.
Premier, which comprises 28% of Brait's total assets, saw all its business units contribute towards growing profitability. The listed food group's results for the six months to end September showed headline earnings growth of over a third. Brait's shareholding in Premier is now 34.4% following the sale of 1.4 million ordinary shares in the company in September 2024, which raised about R142 million.
New Look, which comprises 5% of Brait's assets, disappointed due to difficult trading conditions in a UK fashion market characterised by significant discounting as retailers look to drive sales among cost-conscious consumers. Brait said unseasonal UK weather had also affected the performance.
The value of its legacy private equity fund investments also declined to R11 million as at end-September, down from about R34 million a year prior.
The group opted not to pay a dividend.
"To the extent that surplus cash becomes available at a future date for distribution, the board will consider the potential for the distribution of such surplus cash by way of special dividend," Brait said in its results.
However, before Brait can pay shareholders it first has to make offers to holders of its exchangeable and convertible bonds. Holders of the exchangeable bonds get first preference.
Brait has about R2.68 billion in convertible bonds that need to be repaid by December 2027 and about R1.76 billion exchangeable bonds also due in December 2027.
Shares of Brait, valued at about R7.1 billion on the JSE, had risen about 2% on Wednesday morning and have still fallen by about a fifth on a one-year basis.
-FIN24