Ann Crotty Writer-at-large
Picture: ISTOCK
Picture: ISTOCK

Sagarmatha Technologies had built solid, scalable technology platforms and was well positioned to expand through organic growth or through acquisition, the company’s joint CEOs said on Tuesday with the release of results for the year to end-December 2017.

"Management is focused on its strategic plan to become the largest technology platform company on the African continent," said Grant Fredericks and Gary Hadfield.

The release of the results is in line with the conditions set down by the JSE for the company to be listed on April 13.

In addition to producing the 2017 annual financial statements by April 11, Sagarmatha must achieve a minimum subscription of R3bn and public shareholders must hold at least 20% of the company.

The listing was scheduled for April 6 but was pushed out by a week. According to Sagarmatha, the delay was at the request of potential investors.

The group has said it has received irrevocable commitments from five investors to purchase between R350m and R600m. The placement shares have been valued at R39.62 each, giving the group, with 1-billion shares, a market capitalisation of R49.7bn.

This placement price compares with the end-December 2017 net asset value figure of 33.92c a share. The end-December figures do not include the results of Sekunjalo Independent Media (SIM), but the prelisting statement revealed that in the six months to June 2017 SIM reported an operating loss of R11.1m and had an accumulated loss of R752m. Its net asset value remains negative.

According to the prelisting statement SIM’s losses were primarily due to the reduced net yields on advertising revenue "as a result of increased discounting to maintain and/or grow market share".

Sagarmatha’s planned acquisition of SIM will be effective on the date of the listing. Ahead of that acquisition, Sagarmatha’s businesses include news wire agency African News Agency (ANA), online retailer Loot, online classified business IOL Property, online media business Independent Online and Sagarmatha Enterprise Solutions.

The 2017 results reveal Loot generated R207m of the group’s R282m revenue. With an operating loss of R23.6m, it accounted for the largest portion of total operating loss of R56.8m.

The results reveal interesting lending arrangements between Sagarmatha and Sekunjalo Investment Holdings, with SIH benefiting by borrowing at prime and lending back at prime plus 5%.