Brait Reduces Loss With $81.45 Million Recapitalization

Brait SE, a significant investment holding company partially owned by South African billionaire businessman Christo Wiese, declared an R171-million ($216.83 million) deficit for the fiscal year ended March 31, 2024. This represents an improvement above the R928-million ($54.77 million) loss in the preceding fiscal year.

The lower loss is due to Brait’s R1.5 billion ($81.45 million) recapitalization, which intended to reduce debt and provide working capital. The group’s headline loss per share for FY2024 was 13 cents, down from 70 cents the previous year, while the net asset value per share fell by 8%, from R7.06 ($0.39) in FY2023 to R6.52 ($0.36).

Brait has launched a recapitalization strategy that involves a fully underwritten equity capital offering of up to R1.5 billion ($81.45 million). The proceeds will be used for general working capital, possible investments, and debt repayment, with both bond classes having their maturity dates extended to the end of 2027.

“The recapitalization meaningfully reduces the group’s debt and strengthens the Brait balance sheet, providing a runway for all stakeholders to benefit from the continued recovery in Virgin Active and New Look and the growth in Premier,” according to the organization.

This recapitalization has bolstered Brait’s balance sheet, allowing Virgin Active and New Look to recover while also boosting Premier growth. Following the news, the group’s share price increased by roughly 3% in early session, reflecting investor confidence.

“The maturity of Brait’s bonds in December 2024 requires a recapitalization of the group’s balance sheet to provide the requisite flexibility to optimise the exit window for these assets and to avoid being forced into expedient sales of Brait’s three remaining assets when market conditions are not conducive to value maximisation for shareholders,” according to the statement.

Virgin Active, which accounts for 67 percent of Brait’s assets, performed admirably in all major territories. In Southern Africa, income climbed by 16% year on year in the first four months, with 26,000 new members added. In Italy, revenue increased by 23%, with 11,000 new members.

The UK experienced a 13% growth in revenue and 9,000 new members, while Asia Pacific’s revenue increased by 22%, bringing the total active membership base to 63,000.

Premier, a fast-moving consumer goods company, announced a 26.4% increase in operating profit to R1.6 billion for the fiscal year ending March 31, 2024. The company was listed on the Johannesburg Stock Exchange just over a year ago.

New Look, a clothes store in the UK and Ireland, reported an 8.8 percent reduction in revenue. The decline was blamed on unseasonable weather and a quickly shifting competitive landscape.

“Unseasonal weather and a rapidly changing competitive landscape continue to be key factors for the management to navigate,” Brait told me.

Brait’s recapitalization enables the company to choose the optimal time to sell its assets, allowing it to redeem bonds and return capital to stakeholders more quickly. This strategy seeks to enhance shareholder value while avoiding selling assets in bad market situations. To promote development and success, the company continues to prioritize operational excellence and strategic collaborations.

Brait was founded in 1999 and has since grown to become Africa’s leading investment group. It owns companies in fitness and health clubs, food manufacturing, and clothes retail. Brait is an important player in the region’s economy, strengthening its leadership across the continent.

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