African Equity Empowerment Investments (AEEI) reported on Tuesday that for the six months ended February 28, 2023 revenue from continuing operations grew by 22%, despite increased operational expenses attributed to retrenchment costs and legal costs.
In its interim results for the six months ended February 28, 2023, the group reported that revenue from continuing operations totalled R344 million from R28m in the prior period.
Headline loss per share for continuing operations increased from a reclassified loss of 8 cents to a loss of 2 821c per share, mainly due to the impairment of our investment in BT Telecommunications SA Proprietary Limited.
“Normalised headline earnings increased to 536c per share from 54c per share. The loss-making Technology division has been classified as a discontinued operation,” it said.
The group said the loss-making technology division AYO Technology Solutions Limited has been classified as a discontinued operation.
“The Technology division is currently being unbundled out of the AEEI portfolio, hence this classification,” it said.
AYO revenue increased by 30% from R783m to R1 018m and the loss before tax increased by 74% from R84.1m to a loss before tax of R146.5m mainly because of the decrease in gross margin and the one-off restructuring and retrenchment costs.
“VAT was also disallowed by the South African Revenue Service on expenses from prior years amounting to R60m which had a significant negative impact on profits and cash reserves.
“AYO implemented cost-saving initiatives, retrenchments, and restructuring which resulted in a one-off increase in overall operating expenditure,” the group said.
The group said the fishing and brands division had an increase in revenue of 15.7% from R223m to R256m.
“Profit before tax showed an increase of 46.8% to R18.2m from R12.6m from the prior period. The net asset value per share of the group decreased from 1 058c to 873c.
“This was a result of once-off restructuring and retrenchment costs as well as legal fees in the AYO court matter with the Public Investment Corporation which led to a drop in the cash reserves.
“The impairment of our investments was also a contributing factor. We are still confident that the strategies we have put in place will yield positive shareholder gains for the long term,” it said.
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