AFRICAN Equity Empowerment Investments (AEEI), formerly Sekunjalo Investments, intimated on Wednesday it could separately list up to four subsidiaries on the JSE in the medium to long term.
CEO Khalid Abdullah said a part of the company’s 2020 objectives was to separately list its fishing interests (mainly held under Premier Fishing) and technology hub once revenue targets of R500m were achieved in the respective businesses.
Mr Abdullah was speaking at an investor presentation covering the company’s year to end-August results, which showed headline earnings of 31c per share, operational cash flow of R68m and a 25% hike in the dividend to 2.5c per share.
Speaking to Business Day after the presentation, Mr Abdullah conceded it was likely that the fishing interests would be listed first.
“It’s a race between fishing and technology. But Premier Fishing might pip the technology hub … and we could see a listing anytime in the next 12 to 24 months,” he said.
Premier Fishing would be only the second fishing company listing on the JSE. Oceana is the only dedicated fishing concern listed on the bourse.
The divisional breakdown in AEEI’s results showed Premier Fishing, which has a sizeable position in export-orientated south coast and west coast lobster, generated R349m in revenues and R68m in operating profits. Possible corporate action could push Premier Fishing’s turnover to more than R500m and profits to more than R100m in the short term.
Premier Fishing had engaged two acquisition targets. Fishing sector sources have argued that Premier Fishing’s listing could be well-timed ahead of the new quota allocations in 2020 — a development that might prompt consolidation in the fishing industry.
AEEI’s technology hub generated revenue of R216m and operating profits of R33m.
Mr Abdullah said two possible acquisition targets had been engaged, but added that at least five companies could present takeover opportunities.
AEEI was still mulling an international listing for its biotech subsidiary Genius.
Genius produces erythropoietin brand Repotin, used in the generation of red blood cells for kidney dialysis patients, and granulocyte and dendritic cell vaccines, both used for cancer treatments.
Mr Abdullah also raised the possibility of listing its events and tourism division, which is centred on the Cape Town International Jazz Festival and other third-party events.
“Who knows … we could list this too,” he said.
The division showed revenue of R97m and an operating profit of almost R9m.
Independent analyst Abe Gordon queried AEEI’s dividend policy — the company’s 2.5c per share payout being covered a conservative 12 times by earnings. Mr Abdullah explained that AEEI had not formulated a formal dividend policy yet.
“Bear with us for the next few years … we want to build up dividend payments slowly,” Mr Abdullah said.
AEEI, which is controlled by empowerment personality, Iqbal Surve, closed up 2.63% at 390c on Wednesday.