Message from the CEO
Unaudited RESULTS FOR
Six months ENDED
30 September 2018
We are very pleased to announce the first interim dividend for the Peregrine Group for the first six months reporting period of its 20th year since listing.
This is in line with the direction given to shareholders at the time of the now completed restructuring and unbundling of Sandown Capital.
Trading conditions were challenging during the period under review in which emerging markets were negatively affected by international events, as investors sought better returns in safe haven assets. Against this backdrop, the Peregrine Group performed well and reported a pleasing set of results.
The operating businesses of the Peregrine Group increased Segmental earnings to R283 million (131.4 cents per share) with the continuing operating businesses, excluding the Broking & Structuring business which is the process of being sold, delivering growth of 31%. Included in the current period is a one-time performance fee earned on exit amounting to £3 million (R58 million) received by Stenham as a result of the disposal of a property which formed part of the property portfolio sold to Stenprop in 2014 (“the ad hoc performance fee”). Excluding the impact of the ad hoc performance fee in the current period as well as the contribution from the Peregrine Group’s proprietary assets in the prior period, Segmental basic and headline earnings from continuing operating businesses would have reduced by 6%.
Segmental basic earnings and headline earnings per ordinary share at 131.4 cents per share up 4%.
The Peregrine Group’s now well established strategy of diversifying its earnings continues to pay off as the contribution from its offshore operations delivered 56% (2017: 38%) of the aggregate earnings from continuing operating businesses outside South Africa. In addition, annuity earnings grew by 15% and accounted for 91% (2017: 75%) of the Peregrine Group’s aggregate earnings across the continuing operating businesses. Variable and performance fee earnings decreased by 67% due to lower performance fees earned by Peregrine Capital
This contribution from offshore operations and annuity earnings relate to segmental earnings from continuing operating businesses and excludes the ad hoc performance fee received in the current period as well as the contribution from the Peregrine Group’s proprietary assets in the prior period.
Total operating revenue, which includes the ad hoc performance fee, grew by 2% to R789 million. Investment and other income decreased by 95% due to the unbundling of the Peregrine Group’s proprietary assets in the second half of the 2018 financial year. Segmental expenses were well controlled and remained flat year on year.
The imminent disposal of the Broking & Structuring business is in its final stages and we expect approval from the Competition Commission for this process to proceed before the end of the calendar year.
We expect the demanding trading environment and challenging economic climate to continue for the rest of the current financial year but are confident that the strategies we have embarked upon will secure continued growth and positive returns from the Peregrine Group. We also continue to seek new opportunities for acquisitions that are consistent with the cash generative nature of the businesses within the Peregrine Group.
Click here to view the unaudited results for six months ended 30 September 2018.