Brait’s board members take three-month pay cut due to effects of Covid-19
Both the board of the company and its new advisory partner, Ethos Capital, will cut their fees by 25% for the quarter to end-June
The board of investment company Brait, whose largest shareholder is Christo Wiese, is cutting its salary by a quarter for the three months to end-June, as Covid-19 batters some of its investments, notably the Virgin Active gym chain.
Ethos Private Equity, the company’s new advisory partner, has also reduced its R100m per annum advisory fee by the same amount for the quarter to end-June.
But the most notable development was the announcement that four Brait directors would not be standing for re-election at the company's AGM in August.
Brait is the latest to bow to the Covid-19 effect, Spur is also feeling the pain and Transaction Capital has written down its business by about R190m.
This is in line with the announcement in November 2019 regarding the company's recapitalisation and the introduction of EPE Capital Partners as a new strategic investor.
Brait announced at the time that after the recapitalisation a new board would be constituted and proposed to shareholders for approval. It is now at “an advanced stage” engaging with potential replacements for the four who will be retiring.
Brait's board comprises seven individuals, the most prominent of whom is Christo Wiese, but alongside him are a number of long-serving directors who include chair Jabu Moleketi, Christopher Seabrooke and Herman Troskie.
While Brait would not disclose which four directors will be replaced, Wiese told Business Day that he will remain a director.
Wednesday' announcement included an update on trading conditions facing its portfolio companies.
Brait has an about 80% stake in Virgin Active, which accounts for more than half of its investment portfolio that stood at just less than R30bn as of the end of September.
Gyms have been closed across the territories in which Virgin Active operates, and shareholders have recently approved a £20m loan to the gym group, of which Brait’s share is £16m (about R362m), to help it through the pandemic.
Virgin Active was also in discussions with lenders about waiving debt covenants, and increasing the size of debt facilities, Brait said.
Brait said it was rolling out digital content to its Virgin Active members and the public to retain contact and relevance with its customers while most countries in which it operates remain in lockdown.
Brait said Premier Foods continues to trade well with it benefiting from strong customer demand while its Iceland Foods based in the UK is also enjoying strong sales, particularly in its frozen-food categories.
The proposed re-domiciliation of the company’s registered office from Malta to Mauritius is progressing, with the intention to propose this to shareholders at group’s AGM, the group said. This will lead to a further decrease in operating costs.
Brait’s share had risen 4.67% to R3.14 on Wednesday afternoon, having lost 68.92% in the year to date.