AUDITED RESULTS ANNOUNCEMENT for the year ended 31 March 2024
52 AUDITED RESULTS ANNOUNCEMENT for the year ended 31 March 2024
Summary statement of financial position as at 31 March
Notes | |
ASSETS | |
Non-current assets | |
Investments | 3 |
Current assets | |
Cash and cash equivalents | 4 |
Audited | Audited |
31 March | 31 March |
2024 | 2023 |
R'm | R'm |
12 204 | 12 535 |
12 204 | 12 535 |
2 | 1 |
2 | 1 |
Total assets | 12 206 | 12 536 | |
EQUITY AND LIABILITIES | |||
Ordinary shareholders equity and reserves | 2 | 8 609 | 9 325 |
Non-current liabilities | - | 3 125 | |
Convertible Bonds | 6 | - | 3 125 |
Current liabilities | 3 597 | 86 | |
Convertible Bonds | 6 | 3 504 | - |
Accounts payable and other liabilities | 7 | 93 | 86 |
Total equity and liabilities | 12 206 | 12 536 | |
53AUDITED RESULTS ANNOUNCEMENT for the year ended 31 March 2024
Summary statement of comprehensive income for the year ended 31 March
Audited | Audited | ||
31 March | 31 March | ||
2024 | 2023 | ||
Notes | R'm | R'm | |
Investment valuation gain/(loss) | 8 | 206 | (603) |
Operating expenses | 10 | (46) | (45) |
Finance costs | 11 | (331) | (280) |
Loss for the year | (171) | (928) | |
Other comprehensive loss | |||
Item that may be subsequently reclassified to | profit or loss | ||
Translation adjustments | (545) | (800) | |
Total comprehensive loss for the year | (716) | (1 728) | |
Loss per share (cents) - basic and diluted | 12 | (13) | (70) |
54AUDITED RESULTS ANNOUNCEMENT for the year ended 31 March 2024
Summary statement of changes in equity for the year ended 31 March
Audited | Audited | |
31 March | 31 March | |
2024 | 2023 | |
R'm | R'm | |
Ordinary shareholders balance at 31 March 2023 | 9 325 | 11 053 |
Loss for the year | (171) | (928) |
Translation adjustment | (545) | (800) |
Ordinary shareholders balance at 31 March 2024 | 8 609 | 9 325 |
55AUDITED RESULTS ANNOUNCEMENT for the year ended 31 March 2024
Summary statement of cash flows for the year ended 31 March
Audited | Audited | ||
31 March | 31 March | ||
2024 | 2023 | ||
Notes | R'm | R'm | |
Cash flows from operating activities: | |||
Operating expenses paid | (32) | (30) | |
Administration fee paid to subsidiary BML | (14) | (11) | |
Net cash used in operating activities | (46) | (41) | |
Drawdown on loan from subsidiary | 13 | 274 | 245 |
Convertible Bonds: coupon payments | (209) | (205) | |
Net cash generated from financing activities | 65 | 40 | |
Net increase/(decrease) in cash and cash equivalents | 19 | (1) | |
Effects of exchange rate changes on cash and cash equivalents | (18) | - | |
Cash and cash equivalents at beginning of year | 1 | 2 | |
Cash and cash equivalents at end of year | 4 | 2 | 1 |
56AUDITED RESULTS ANNOUNCEMENT for the year ended 31 March 2024
Notes to the summary financial statements for the year ended 31 March
1. ACCOUNTING POLICIES Basis for preparation
The financial statements are prepared in accordance with IFRS® Accounting Standards on the going concern principle, using the historical cost basis, except where otherwise indicated. The accounting policies and methods of computation are consistent with those applied for the year ended 31 March 2023. The Group has only one operating segment being that of an investment holding company.
In accordance with IFRS10, given the investment entity status of wholly owned subsidiary Brait Investment Holdings Limited ("BIH"), the Company is exempted from producing consolidated financial statements.
The Company's financial statements are prepared using SA Rand (R/ZAR) as its presentation currency. The holding company, Brait PLC, and its main wholly owned subsidiaries, BIH and Brait Mauritius Limited ("BML"), use Pound Sterling as their functional currency. The financial statements have been prepared using the following exchange rates:
2024 | 2023 | |||
Closing | Average | Closing | Average | |
GBP/ZAR | 23.8600 | 23.5406 | 21.9162 | 20.4653 |
USD/ZAR | 18.8919 | 18.7332 | 17.7153 | 17.0039 |
57AUDITED RESULTS ANNOUNCEMENT for the year ended 31 March 2024
Notes to the summary financial statements for the year ended 31 March
2024 | 2023 | |||
Notes | R'm | R'm | ||
2. NET ASSET VALUE PER SHARE | ||||
Ordinary shareholders equity and reserves | 8 609 | 9 325 | ||
Ordinary shares in issue (millions) | 5 | 1 320.3 | 1 320.3 | |
Net asset value per share (cents) | 652 | 706 | ||
58AUDITED RESULTS ANNOUNCEMENT for the year ended 31 March 2024
Notes to the summary financial statements for the year ended 31 March
3. INVESTMENTS
Through its main operating subsidiary BML, which holds its portfolio of investments, the Company designates the majority of its financial asset
investments as at Fair Value Through Profit and Loss ("FVTPL"), with any resultant gain or loss recognised in investment valuation gain/(loss). Fair value is determined in accordance with IFRS13.
Statement of financial position items carried at fair value include investments in equity instruments and shareholder funding instruments. Where applicable, listed investments are held at closing share prices at period end.
The primary valuation model utilised for valuing the unlisted portfolio of investments held by BML is the maintainable earnings multiple model. Maintainable earnings are generally determined with reference to the mix of prior year audited numbers and forecasts for future periods after adjusting both for non-recurring income/expenditure or abnormal economic conditions if applicable. If the forecasts are higher than the prior year earnings, as the year progresses the weighting is increased towards the portfolio company's forecast. If the forecasts are lower, the forecasted future earnings will usually be used as the maintainable earnings for valuation purposes. For portfolio companies that have been significantly impacted by the Covid pandemic, maintainable earnings are based on a post Covid sustainable level.
The Directors decide on an appropriate group of comparable quoted companies from which to base the EV/EBITDA valuation multiple. Pursuant to Brait's strategy focused on maximising value through the realisation and/or unbundling of its existing portfolio companies, the primary reference measure generally considered at reporting date is the average spot multiple of the comparable quoted companies included as peers, which is adjusted for points of difference, where required, to the portfolio company being valued.
Where maintainable earnings are based on a post Covid sustainable level, peer average forward multiples for the corresponding forward period are used as the reference measure. Peer multiples are calculated based on the latest available financial information which may be adjusted based on subsequent macro or company specific information publicly known if appropriate. Adjustments for points of difference are assessed by reference to the two key variables of risk and earnings growth prospects and include the nature of operations, type of market exposure, competitive position, quality of management, capital structure and differences between the liquidity of the shares being valued and those on a quoted exchange.
The resulting valuation multiple is applied to the maintainable EBITDA to calculate the Enterprise Value ("EV") for the portfolio investment. That EV is then adjusted by net cash/debt to calculate net EV to which the Company's percentage holding is applied to calculate the Company's carrying value. Net cash/debt may be adjusted for the estimated effect of working capital and cost deferrals, where applicable.
59AUDITED RESULTS ANNOUNCEMENT for the year ended 31 March 2024
Notes to the summary financial statements for the year ended 31 March
3. INVESTMENTS CONTINUED
31 March 2024 | 31 March 2023 | |||||
3rd Party | 3rd Party | |||||
Valuation metrics (note 1) | EBITDA | Multiple | Net Debt | EBITDA | Multiple | Net Debt |
Virgin Active (£'m) (note 2) | 123.3 | 9.0x | 447.0 | 120.9 | 9.0x | 476.0 |
Premier (R'm) (note 3) | Listed on the JSE on 24 March 2023 | Listed on the JSE on 24 March 2023 | ||||
New Look (£'m) (note 4) | 40.0 | 6.5x | 31.8 | 55.0 | 5.0x | 38.0 |
Other Investments | Varied | Varied | ||||
Note 1 Consistent with the prior year, Brait has valued its unlisted investment portfolio on a pre-IFRS16 basis, adjusting financial data for the impact of IFRS16, as appropriate to ensure consistency.
Note 2 Virgin Active's maintainable EBITDA is based on a look-through to a December 2025 estimate sustainable level (FY23: March 2025 estimate sustainable level). The primary reference measure considered is the peer group average forward multiple of 9.9x (FY23: Two year forward multiple of 8.9x). Net third party debt has been increased by £20.0 million (FY23: £22.3 million) for the estimated effect of working capital and costs deferred during lockdowns. Brait's equity and shareholder funding participation is unchanged from the prior year at 67.4%.
Note 3 Premier is valued at the closing JSE share price of R61.10 (FY23: R60.00). Brait's shareholding in Premier is 35.4% (FY23: 47.1%) representing its 45.7 million shares (FY23: 60.7 million shares held). As announced to the market on 19 March 2024, the reduction in shareholding was a result of the oversubscribed placement of 15 million ordinary shares in Premier, raising total gross proceeds of R900 million.
Note 4 New Look's valuation is based on LTM EBITDA applied to a 6.5x historic multiple, which represents a 41% discount to its peer average multiple of 11.1x. In the prior year, New Look was valued using a 5.0x historic multiple (peer average multiple of 9.8x). No normalisation adjustments were considered in net third party debt of £31.8 million (FY23: included £18.9 million in respect of certain deferred costs during the lockdown periods). Brait holds 18.3% of the New Look shareholder loans/PIK facility and equity (17.2% equity participation post dilution for management's incentive plan).
60AUDITED RESULTS ANNOUNCEMENT for the year ended 31 March 2024
Notes to the summary financial statements for the year ended 31 March
3. INVESTMENTS CONTINUED
Fair value hierarchy
IFRS13 provides a hierarchy that classifies inputs employed to determine fair value. Investments measured and reported at fair value are classified and disclosed in one of the following categories:
Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 Inputs for the assets or liability that are not based on observable market data.
The Group's investments are held by subsidiary BML, a wholly-owned subsidiary of BIH, and therefore classified as Level 3. To enhance disclosure, a breakdown of the fair value of the investment in BIH is provided.
2024 | 2023 | ||
Notes | R'm | R'm | |
BIH Investment in BML | 15 073 | 15 166 | |
Virgin Active | 10 183 | 9 045 | |
Premier | 2 791 | 3 640 | |
New Look | 982 | 931 | |
Other investments | 22 | 37 | |
BML net working capital(1) | 1 204 | 3 567 | |
Borrowings (BML RCF) | 3.1 | (109) | (2 054) |
BIH net working capital | (49) | (49) | |
BIH Exchangeable Bonds | 3.2 | (2 820) | (2 582) |
Level 3 fair value investment in BIH | 12 204 | 12 535 |
- FY24 includes R0.9 billion arising from the oversubscribed placement of 15 million Premier shares in March 2024 as well as R0.2 billion cash held in GBP denominated notes ring-fenced for coupons on the Convertible Bonds to 4 December 2024. FY23 represented R3.6 billion proceeds realised from the listing of Premier which were subsequently applied in FY24 as follows: (i) to fully repay the outstanding amount of R2.1 billion on the BML RCF in April 2023; and (ii) to follow Brait's pro rata GBP33.8 million (R756 million) equity subscription into Virgin Active's GBP50 million equity rights offer in May 2023.
61AUDITED RESULTS ANNOUNCEMENT for the year ended 31 March 2024
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Brait plc published this content on 25 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 June 2024 06:41:13 UTC.