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EDWARD WEST
Finance Editor
AN ANNOUNCEMENT was “fairly imminent” about the future of Mvelaphanda Group’s (Mvela’s) 22% stake in Life Healthcare, Mvela financial director Ernst Roth said yesterday.
Speculation has been circulating that Life Healthcare may list on the JSE, but Roth said he was unable to provide details of the plans at this stage.
Mvela’s stake in Life Healthcare makes up 42% of Mvela’s intrinsic net asset value of R9,32 per share. Life Healthcare, which “has continued to perform well” in the six months to December 31 last year, said in November it had appointed advisers to advise it on a strategic path to be followed.
This was after Mvela Group said last year it intended to realise value in the most efficient way for its shareholders by unbundling or disposing of its investments.
Mvelaphanda CEO Yolanda Cuba said in a statement yesterday that the strategic focus of the group for the next six months was to concentrate on the unlisted investments in unlocking value for shareholders.
“We have benefited from the positive sentiment in the market on our investments and are working hard to ensure we realise intrinsic net asset value for shareholders,” she said.
The increase in Mvela’s intrinsic net asset value per share from R7,36 at December 31 in 2008 was mainly due to the rise in the valuations of Absa Group, Life Healthcare Group and Mvelaserve. Mvela’s headline earnings per share rose significantly to 124,9c from 1,3c in 2008.
The financial position remained strong, with cash of R558m, lower interest-bearing debt, and the debt-to-equity ratio falling to 38% from 47%.
Operating profit increased 43% to R150m on a comparable basis off a strong performance from Mvelaserve, a leading support services provider.
Earnings before interest, tax, depreciation and amortisation climbed 28% on a comparable basis, to R214m.
Mvelaserve’s two largest divisions reported strong results. The facilities management business benefited from increased project management activity and new business gains, while the security business grew in all operations and secured new contracts.
The turnaround strategy put in place in the catering and cleaning business was on course, while the diversified services business was affected by lower imports and exports in the contract-forwarding business.
Khuseti Holdings, the franchiser of the King Pie brand, improved operating profit by more than 400% with the expansion of its product range into the wholesale market.
Cuba said creating a brand around Mvelaserve with a separate management structure had paid off, and there remained good growth potential in the business.
weste@bdfm.co.za
MVELAPHANDA GROUP
Interim20092008
Rev (bn)1,9 1,89
Pretax (m) 642,6 109
Net Income (m)522 46,2
HEPS (c) 124,9 1,3
Dividend (c) --
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