Little economic improvement likely in year ahead, Ethos Capital warns


Investment holding company Ethos Capital, which recently took a stake in TymeBank, said on Thursday its net asset value per share rose 3% to R11.34 in the year to end-June.

Despite this, the company’s discount to intrinsic net asset value, which is seen as the best measure of how well an investment holding company is faring, widened to 31% at the end of the period from 28% previously.

The company spent R684m investing in seven new assets during the period, bringing its total investment portfolio to 19. Invested capital rose to R1.4bn, or 74% of total assets. This would soon increase to R1.6bn and 82%, respectively, as another transaction is imminent.

Investments during the period included a stake in Chibuku, a Malawi-based brewer of traditional African beer, as well as a stake in Gammatek, the largest distributor of mobile phone accessories and low-technology components in SA.

The group said on Thursday it does not expect a material improvement in economic conditions in SA over the next year and would focus on scalable businesses, including with transportable business models across countries.

“Ethos has focused much of its efforts on improving the fundamentals of and outlook for its portfolio companies and positioning these businesses to benefit from an improved macroeconomic outlook,” Ethos CEO Peter Hayward-Butt said in a statement.