market watch
MARC HASENFUSS: AEEI erasing legacy issues
While Rupert blows smoke and GPI seems to have an insatiable appetite for shares in Spur
Equity analysts turned up in large numbers to the recent presentation by African Empowerment Equity Investments (AEEI, the old Sekunjalo Investments). The firm, anchored on investments in recently listed Premier Fishing and a soon-to-be-listed technology hub (which includes the 30% stake in British Telecoms SA), has been snubbed by institutional investors. AEEI has a chequered past, but no-nonsense CEO Khalid Abdulla is slowly erasing the lingering legacy issues. There is now evidence of decent cash flows (and an interim dividend), as well as a strong balance sheet to take advantage of the considerable BEE leverage AEEI has for deal making.The most intriguing slide in AEEI’s presentation pack was the directors’ valuation of the company. While the "official" net asset value (NAV) sits at 216c/share, AEEI suggests a value of 660c/share based on an earnings multiple of 15 times. But the 29.5c headline earnings do contain a sizeable fair value adjustment and are far higher than operatio...
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