ARC Investments (ARC), majority owned by the Ubuntu-Botho Investments Group, lifted net asset value 14.7 percent to R10.06 per share in the year to June 30 after good financial performances by many of its businesses.
The net asset value growth was due to good performances by some of the businesses it has invested in, such as Rain, TymeBank in South Africa, Tyme Global in Singapore, Alexforbes, Fledge Capital and Capital Legacy, ARC said in a statement.
Looking ahead, Co-CEO Johan van Zyl said they were likely to consider fewer major acquisitions going forward, following a “good run” since listing five years ago.
“We’ll enter a phase of reviewing our portfolio and consider some pruning over the short to medium term. We have received some unsolicited offers for our shareholdings in a few companies, which we are considering,” he said.
The share price rose 4.1 percent to R5.82 yesterday morning on the JSE.
Ubuntu-Botho Investments Group, which has more than 600 individuals and groups of black shareholders, owns 13.1 percent of Sanlam as its key asset. ARC’s portfolio value increased to R13.6 billion, excluding cash, from R12.2bn at the same time last year. Cash in ARC Fund rose well to R669 million from R239m.
During the year international equity funding was secured in TymeBank and Tyme Global. Some 12.4m Afrimat shares were sold for R740m. ARC Investments grew the value of its total portfolio, excluding cash, by 11.3 percent to R13.6bn.
ARC Investments has shareholdings in 52 companies across several sectors: financial services, telecommunications, mining & energy, Business Process Outsourcing, property, agriculture, and other private equity type businesses.
ARC co-CEO Johan van der Merwe said: “Notwithstanding difficult trading conditions, most of the key assets in our portfolio delivered strong results, while others improved their financial performance. The diversified nature of our investment portfolio has shielded the performance of the portfolio from the vagaries of the market.”
Among the three largest investments in ARC Fund is Rain.
The value of ARC Fund’s interest in Rain increased 9.7 percent to R3.6bn as Rain was doing well on the sale of 4G and 5G products.
It also acquired new spectrum, and the use of the spectrum was expected to positively impact cash flow.
Rain achieved its budget of R1bn earrings before interest tax depreciation and amortisation in its financial year ending February 2022.
Among ARC Fund’s three largest investments was also Kropz, which operates in a market characterised by strong phosphate concentrate demand. It saw unexpected ore body variability that required alternative mining methods. The business could still deliver significant value once this challenge was resolved, Van der Merwe said.
The third investment was TymeBank, which raised $150m from new shareholders, Tencent and the CDC.
TymeBank has 5m customers, 36 months after launch.
It started to open several hundred TFG (formerly The Foschini Group) kiosks in August 2022, to be rolled out over four months. Recently TymeBank acquired SME lender Retail Capital, to drive a new SME focus.
BUSINESS REPORT