DiamondWhile the British people are attempting to make up their minds whether they want to remain in the warm embrace of their Continental cousins or plunge into the unknown waters that are offered by Brexit, Brait’s shareholders may not be too unhappy to note that their company has done a Brexit all of its own.

It has shifted its focus and the great bulk of its assets from the sunny skies and political challenges of the South to markets where the beer might be warm but at least the currency is solid.

Of the group’s asset base, 45% is in fashion retailer New Look, 23% in Virgin Active and 9% in Iceland; the 15% in Premier is the only significant chunk that is still struggling along in rand.

New Look is based largely in the UK, which is far from being an uncompetitive market, as the recent demise of the BHS department store chain demonstrates.

New Look is launching a major push into China, with 85 stores spread across 20 provinces and 40 cities, as opposed to 19 stores at the end of the 2015 financial year.

Virgin Active is also piling into Southeast Asia, with £150m earmarked for investing in new clubs in Thailand and Singapore over the next six years.

But the most important numbers for Brait shareholders will be the 76.7% growth in NAV for the year, which brings the three-year compound annual growth rate to a remarkable 72.3%/year, kicking its benchmark of 15% firmly into touch.

The share itself has done a cheeky 816.4% over the past five years, an astonishing achievement that will be difficult to repeat.

Vital numbers on June 17 2016

Share price (R)153.95
Market cap (Rbn)80.23
P:e ratio3.59
Earnings yield (%)27.89
Dividend yield (%)0.88



DogMeanwhile, at the other end of the spectrum, you have poor old RBA Holdings, which is limping along as if it is just waiting for someone to do the merciful thing and apply the captive bullet. There are business rescue practitioners crawling all over the place seeing what they can do to inject a bit of life and salvage a bit of value from the mess, but the company is in breach of its loan covenants, going concern is covered in question marks, and it all looks a little bit bleak.

The company builds houses to sell directly to owners and delivers turnkey rental units to property investors. There’s clearly no shortage of demand for affordable housing, but RBA had a number of difficulties in the year that added up to a total loss for the year of R92m. It ramped up capacity to cope with expected demand that failed to materialise, leaving it with an inflated cost base.

A large number of its projects were on a turnkey basis, where the finance providers pay in full only on completion and final transfer of the house, leading to severe cash-flow constraints.

One complaint that will be more than familiar to anybody who has experienced the Sisyphean horror of dealing with certain local councils relates to the delays experienced in the registration process, particularly in getting electrical and water meters fitted in Tshwane and in dealing with the deeds office in Johannesburg.

The frustration involved is enough to drive an individual to the dark end of the Klipdrift bottle, but if your business depends on it, the angst must be almost unbearable.

Vital numbers on June 17 2016

Share price (c)74
Market cap (Rm)111.35
P:e ratio
Earnings yield (%)
Dividend yield (%)

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