Our opinion on the current state of BRIMSTON(BRT)Brimstone (BRT) is a black-controlled investment holding company with a diverse portfolio of holdings.
It owns:
1. 54,2% of Sea Harvest, which is a listed fishing company and has a market capitalisation of just over R4,5bn.
2. 100% of Lion of Africa, a loss-making insurance company, which decided in November 2018 to cease operations and close its doors.
3. 100% of House of Monatic, a loss-making clothing manufacturer.
4. 24% of Oceana, the largest fishing company in South Africa with a market capitalisation of R8,6bn. Brimstone is increasing its shareholding by buying 8m shares from Tiger Brands, which will take its holding to 22,9%.
5. 6,1% of Grinrod.
6. 18% of Aon Re Africa.
7. 25% of South African Enterprise Development.
8. 49,8% of Vuna Fishing company.
9. 12,8% of Milpark Education.
10. 25% of Obsidian (a black-owned investment holding firm positioned to benefit from the roll-out of the NHI) which, in January 2020, it increased to 80% for R35,7m.
It also holds a variety of other smaller shareholdings in property, healthcare, 3,9% of Long4Life and 5,3% of Stadio. The company has been selling down its stakes in Life Healthcare, Lion of Africa, House of Monatic, Equites, Multichoice, and Phuthuma Nathi. It has used the proceeds to pay down R1bn of its debt.
In its results for the six months to 30th June 2024 the company reported revenue down 39% and headline earnings per share (HEPS) up 110%. The company's intrinsic net asset value (NAV) fell 5,7% to 1143,6c per share. The company said, "Despite the operating environment, the Group reported headline earnings per share of 71.9 cents (2023: 34.2 cents), up 110% over the comparative period. This was mainly due to fair value gains of R76.2 million compared to fair value losses of R40.3 million in the prior period, and the increase in Brimstone’s share of profits of associate, Oceana, from R94.9 million in the prior period to R187 million in the period under review."
The company disposed of its entire stake in Milpark, and part-stakes in Phuthuma Nathi, MTN Zakhele Futhi, and Equites. Both ordinary and "N" shares are thinly traded, but the ordinary shares are worse.
We regard the ordinary share as too thinly traded for private investors and, unless they begin to unbundle the portfolio, the extra value is likely to remain locked in. On 27th November 2024 the company announced that its intrinsic net asset value (NAV) had declined by 9,6% in the 3 months to 30th September 2024.
