Brimstone warns loss will widen amid downward valuations
The largest shareholder of Sea Harvest says its first-half headline loss could increase by as much as 35%
Brimstone Investments, the largest shareholder of food producer Sea Harvest, has warned that its half-year loss is expected to widen amid downward pressure on the valuations of its listed investments.
The group expects a headline loss per share of 73.6c-81c, a 23%-35% increase on the prior period’s loss per share of 59.9c, which has been adjusted to account for a capitalisation issue in May.
Recently Brimstone sold down some of its smaller investments — such as its exposures to MultiChoice and property group Equites — to cull debt. The group has opted to distribute new shares to shareholders rather than pay a dividend, to preserve cash.
At the end of December, Brimstone held 54.2% of Sea Harvest, and 24% of Oceana. It also had stakes in, among other things, higher education group Stadio and hospital owner Life Healthcare.
Brimstone had an intrinsic net asset value of R3.35bn at the end of December, with its stake in Sea Harvest worth R2.3bn.
By the close of trade on Friday, Brimstone’s ordinary share was unchanged at R4.80, having fallen 37.25% so far in 2020. Its N shares were also unchanged at R4.50, with a fall of 37.87% this year. They reached highs of R18.25 in 2011 and R16.78 in 2015, respectively.
Shares in Sea Harvest were flat at R13.55 on Friday and have fallen just less than 7% in the year to date.
Oceana’s shares fell the most in two weeks on Friday, down 2.26% to R64.51. They are up 4.81% in 2020.
There has been speculation that Brimstone may unbundle its stake in Oceana and Sea Harvest to unlock value. However, board chair Fred Robertson said at the company’s recent annual general meeting he believed it might be prejudicial for Brimstone to mull unbundling any of its fishing interests while the fishing rights allocation process, due for implementation in 2021, is still outstanding.
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