Review of the Interim Results ended 30 September 2016
The Peregrine Group has delivered a pleasing set of results against a backdrop of weak local markets among industrial and financial shares during the six months ended 30 September 2016. Over the period, normalised basic earnings were up 10% to R270 million, normalised headline earnings per share were 3% higher at 118.5 cents and the cash generative nature of the Group was once again evident in the normalised R302 million in cash generated from operating activities.
One of the most positive aspects of our results is embodied in the increased annuity income generated across the board and the resultant improved quality of earnings across the Group. Annuity earnings now account for two thirds of group income and this creates an enhanced ability for the Group to generate good earnings largely irrespective of market conditions.
The major political, macro-economic event during the period was the decision within the UK to exit the European Union and the resulting weakness of the Pound was inevitable. Many observers were, however, surprised by the Rand strength against a basket of developed world currencies. The Rand appreciated by 6.6% against the US Dollar and by 15.8% against the British Pound over the six months.
The environment was not particularly helpful to the wealth management cluster which has historically positioned itself to benefit from Rand weakness. The Securities segment performed very well, off a high base, as it managed to capitalise on its leading position within a variety of segments and products as well as overall market trading volumes, which remained robust over the reporting period. Our alternative asset management business benefitted from increased assets under management. Improved deal flow and corporate activity aided the corporate advisory and capital raising activities within Java Capital. Strong returns in the Peregrine’s offshore direct property holdings as well as pleasing returns from investments in the Peregrine’s own hedge funds were offset by a decrease in the value of our proprietary listed securities.
We remain committed to building Peregrine both through new Group initiatives and targeted acquisitions. The Group businesses are well positioned for continued growth in the remainder of the financial year.
Click here to view the Unaudited condensed consolidated results and Financial results presentation for the six months ended 30 September 2016.