Efficient Group stomachs loss to bring investment unit in-house
Chief economist Dawie Roodt says the company is excited rather than worried about the transaction
Financial services company Efficient Group is expecting a loss of more than half of its market cap when it announces its full-year financial results at the end of November. The loss, the biggest loss the company has ever reported, was due to it cancelling its profit-sharing arrangement with its investment business, which was established in 2013. It is also Efficient’s first loss since 2012. Efficient said it expects a loss of between R272m and R301m. “This is actually not a loss. It’s an acquisition of an additional income stream. It’s a once-off accounting expense. We are not worried about it, we are excited about this transaction,” said Efficient Group’s chief economist, Dawie Roodt. The joint management and profit-sharing agreement with Robert Walton, the founder of the investment business called Efficient Invest Companies saw Walton and his team earn 66% of the unit’s profit before tax. The unit, which includes collective investments as well as asset management and consulting...
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