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Brimstone ‘working hard’ to make empowerment work
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Edward West
Business Day
Monday, March 01, 2010
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Brimstone Investment Corporation, the empowerment group that turned around to a profit in the year to December 31, had been working hard to manage its empowerment status and dividends would be paid to black shareholders holding 54% of the group, executive deputy chairman Fred Robertson said last week.
Its investment interests include Life Healthcare, fishing groups Sea Harvest and Oceana, clothing maker House of Monatic, and financial services firms Lion of Africa and Aon SA.
Brimstone made a R337,5m profit in the year to December 31 after a R106,4m loss the previous year. The group declared a dividend of 32c per share, from 24c.
Robertson told the Investment Analysts Society in Johannesburg last week there was a big debate on empowerment, whether it was successful, and whether black businessmen tended to become only silent partners. He said this was not the case for Brimstone, with short-term insurer Lion of Africa being built into a successful company from almost scratch.
The group had built its assets steadily over 15 years and had institutional shareholder support, while many other empowerment companies had disappeared from the JSE.
“For us, it’s important that 54% of our dividends go straight into black hands. We started on the Cape Flats with shareholders in Mitchells Plain and Khayelitsha, but now we are a national empowerment spread…. People want to be able to see we have this shareholding when we do deals.”
Brimstone had grown the book value of its assets from R267,8m in 2002 to R5,59bn last year.
The Sea Harvest hake fishing and processing subsidiary had pipped its main rival to hold the biggest market share in SA, and chances were good the 1% rise in total allowable catch this year would continue growing. Last year’s export performance was hurt by a stronger rand.
House of Monatic had moved back to what it did best, making formal wear, and had made a profit every month since last May — barring September, when there was a two-week strike. It was budgeting for a profit this year.
Life Healthcare, which owns and operates 55 acute care facilities, increased patient paid days from 1,5-million a year in 2006 to 1,8-million last year. Admissions were up from 500 000 to just less than 600 000, and the number of theatre cases was just under 350 000, from 250 000. Revenue had risen from more than R5,5bn to just under R8bn and taxed earnings were just under R800m, from more than R300m.
There has been speculation Life Healthcare may list in the first half of this year. Formalities regarding approvals for restructuring plans were under way and an announcement was expected soon, a spokesman said.
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