Diversified financial services group Vunani has seen a two thirds rise in interim revenue, with new acquisitions and turnaround of some of its underperforming business helping the group navigate through Covid-19 volatility.
The group, whose interests include asset management, insurance and commodities trading, saw profits rise 89.8% to R35.97m in the six months to end-August, with revenue growing 69% to R288.2m.
This was largely influenced by the inclusion of recent acquisitions of an insurance and fund management business in Eswatini and Botswana the group said. Vunani also benefited from the designation of financial services businesses as essential services providers during Covid-19.
In January, it acquired a 60% stake in VFMB — previously Stanlib Asset Managers — in Botswana, which contributed R13.8m to its interim revenue.
In December 2019, the group acquired a short-term insurance business operating in Eswatini, picking up a stake of Metropolitan Life's business there in a R55m transaction.
This segment contributed revenue of R107.1m and profit of R5.7m to end-August.
Vunani’s institutional securities broking segment, which includes equity, derivative and capital market trading services, saw revenue increase 40% to R22.6m, contributing R4.6m in profit, compared to a loss of R2.4m previously. This was attributable to a turnaround strategy implemented in the previous year, the group said.
The fund management segment recorded a 68% increase in revenue to R66.9m with profit more than doubling to R8.9m.
Vunani Fund Managers reported a 12% increase in assets under management to R44.6bn when compared to the end of February.
“Trading under the Covid-19 climate coupled with a stagnant economy has been a challenge for the group,” CEO Butana Khoza said in a statement. “Our strategy to turn around our underperforming stockbroking business, company-wide business optimisation and successful integration of our acquisitions has borne fruit,” he said.
This would be important as Vunani focuses its attention on its next strategic intervention, which involves separating the group's investment activities from its financial services business, he said.
Vunani announced in August it was considering unbundling its private equity business and listing it separately in a bid to improve transparency, as well as reduce listing costs and reporting requirements.
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