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GREYSTONE PARTNERS LIMITED’S E68 MILLION INVESTMENT

By Qondile Ntiwane | 2020-07-01

Greystone Partners Limited has invested about E68 million in the 2019 financial year.

The company’s investments include Alliance Foods which is classified as a subsidiary in terms of IFRS, three business combinations and thus fully consolidated, Lojaf and Ngwane Mills which have been classified as investments in associates at fair value through profit or loss.

Other investments are Eswatini Royal Insurance Corporation (ESRIC), SBC Limited, Orchard Insurance Limited, Promco, General Africa Foods (GAF) and SwaziSpa Holdings Limited.

This is contained in their audited financial results for the year ended September 30, 2019. The financial report highlighted that in December 2019, Greystone acquired an additional 18.2 per cent in Alliance Foods for E16 648 075.

In January 2020, Greystone made an additional investment E11 735 876 in Eswatini Royal Insurance Corporation through Inba Holdings for 360 000 shares.

It was stated that Greystone’s total investments income of E15.7 million (2018: 20.8 million) comprised of dividend income of E11.0 million (2018: 21.8 million) and interest income of E4.6 million (2018: E6.2 million). Meanwhile dividends comprised of dividend received from ESRIC of E9.2 million, SBC limited of E1.8 million and Orchard of E80 625.

The financial further highlighted that revaluation gains of the underlying investments amounted to E17.7 million.

The major gain was a result of Lojaf’s value increasing by E10.3 million while ESRIC’s value decreased to E89.5 million, resulting in a fair value loss for the year.

The statements also reflected that cash and cash equivalents amounted to E66.2 million compared to E33.6 million in 2018. Of this total 23.1 million relates to Alliance Foods and the balance to Greystone. “KPMG was again engaged to perform the independent valuation of Greystone’s unlisted investments. KPMG applied the market multiple methodologies in valuing ESRIC’s and Orchard Insurance. For ESRIC short term insurance business and Orchard’s the price earnings multi was the primary methodology.

“For Ngwane Mills, Lojaf and Alliance Foods and GAF, the primary valuation technique applied by KPM was the discounted cash flow methodology,” reads the report.

It was stated that there were no other significant events that have occurred in respect of the group subsequent to the year-end that may be relevant to the accuracy of these financial statements. It was also noted that the 2019 calendar year had been a year of further investments and growth with each of the underlying investments doing reasonably well considering the low economic growth environment.

The financial statements for the 12 months ended September 30, 2019 have been audited by Price WaterHouse Coopers.

...Net Asset Value up by 7.94 per cent at E2.64

Greystone Partners Limited has reported that Net Assets Value (NAV) per share at September 30, 2019 was E2.64, which shows a growth of 7.94 per cent to the E2.45 NAV of the same period in the previous year.

According to their audited financial results for the year ended September 30, 2019, the growth in the company’s NAV was the key performance measure for the Board of Directors.

The report stated that the overall Net Asset Value increased to E374 million from E330 million. The company stated in their financial review that due to the accounting policy changes, Greystone financial statements were vastly different to prior years.

Also part of the key highlighted in the financial results was a three- year compound annual growth rate for the reported NAV to 30 September 2019 of 11.9 per cent per annum.

Meanwhile, on Greystone Company’s balance sheet, a total of E37.4 million of debt including capitalised interest was raised in the current financial year to fund a portion of the E68 million of equity acquisitions made in the 2018 financial year.

The audited financial statements for the company as at September 30, 2019, noted that this was the first time that Greystone had raised external debt to fund acquisitions.

“However, the Board is comfortable with the current leverage on the balance sheet,” reads the statement.

It was also reported that a loan of E36.5 million including capitalised interest was raised on Alliance Foods balance sheet that relates to the acquisition of the KFCs. These loans have resulted in E3.8million of finance costs compared to E2.4 million in 2018.

Alliance Foods acquired seven KFC quick service restaurants in March 2019 and is currently the sole franchisee for the KFB brand in Eswatini under a franchise agreement with KFC (Pty) Limited.

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