There is nothing more satisfying than hanging in for a long and hard-earned comeback. I wish I could speak from personal experience, but I can’t.
I did once, though, single-handedly turn a family golf day around for the unfancied “outlaws” team on the Mossel Bay golf course — but there was a resounding hollowness to clinching the critical par after my wayward approach had deflected off a roof and plopped softly next to the pin.
Financial services specialist Vunani, on the other hand, can be very proud of its superb turnaround effort — though I’m not sure this achievement got much of the market’s attention. Vunani, founded by empowerment pioneer Ethan Dube, was smart in separating the private equity/investment interests from the main business. These interests are now listed under Vunani Capital Partners — not on the JSE, but on the Equity Express bourse.
This is a rather interesting compilation of investments, which I will probably look at more closely in our sister publication Investors Monthly. But back to JSE-listed Vunani. The numbers stacked up nicely in the year to end-February, with a healthy R100m gain in revenue and premiums to R687m and the bottom line up more than threefold to R60m. Net cash generated was a reassuring R121m, underpinning a generous dividend declaration of 14c a share. The core fund management function did awfully well — at least when compared with some of its larger opposition.
This segment reported sharply higher revenue of R181m (last year R134m), and its profits doubled to R37m. On the asset administration side, those punters who questioned the 2015 acquisition of Fairheads might check their cynicism. This segment managed revenue of R173m (previously R145m), and posted profits of R20m.
One interesting aside — and something that might hearten JSE CEO Leila Fourie — was CEO Butana Khoza’s response to my question about being tempted to buy out minority shareholders and delist Vunani from the JSE.
To tough it out in the public domain can be inspirational. We want to be visible to other entrepreneurs who want to take their value proposition to the next level
— Butana Khoza
On paper, Vunani might look a prime candidate for delisting. The share is illiquid, there’s a lack of market interest and there is certainly no need for the company to raise fresh capital in the foreseeable future. But Khoza says that as a small financial services company Vunani’s visibility in maintaining a JSE listing is priceless. “The regulation should give our clients a lot of comfort. The level of transparency is important ... there is really no room to hide. To tough it out on the public domain can be inspirational. We want to be visible to other entrepreneurs who want to take their value proposition to the next level.” Preach on, brother!
Unsurprising silence
Speaking of transparency, there are a few perplexed shareholders in Hosken Consolidated Investments (HCI) who are wondering how the investment group could issue its results and make only the scantiest comment about its oil and gas exploration interests. The discovery of the Venus field off the Namibian coast has certainly got oil industry pundits in a froth, and this has already spilled over into HCI’s shares.
HCI has a significant interest in Impact Oil & Gas (IOG), which has a stake in the Venus find. But what did punters really expect HCI to say? The way I understand it is that the operator, Total, would be responsible for comment and information out of the blocks. In other words, HCI — or IOG, for that matter — won’t say anything of importance until Total has said it first. In any event, HCI has always played down its oil and gas interests — stressing the high-risk, high-reward nature of these assets. Remember also that the speculative reports about the Namibian block are based on a single well in a field that might span about 570km2.
In other words, there is still a heap of detail that needs to be garnered before any authoritative pronouncements can be made. I would suspect that HCI — which has already invested heavily in Impact — might even be looking to offload all or part of its oil and gas interests rather than taking on more debt to participate in further exploration and production activities.
As things stand, HCI is chipping away valiantly at its debt-at-centre, which stands at R2.3bn. Encouragingly, subsidiaries Frontier Transport, eMedia and Deneb collectively declared about R200m in dividends — of which HCI will collect the lion’s share in the weeks ahead.
HCI’s unlisted coal business is also going great guns, and presumably donated a decent dividend. Gaming subsidiary and pre-Covid cash cow Tsogo Sun Gaming (TSG) postponed its dividend decision until its board meeting in August. I think betting on TSG resuming dividends later this year is a worthwhile wager.
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