Imara seals P100m deal to sell subsidiary
Staff Writer | Thursday June 18, 2015 12:31
The Botswana Stock Exchange (BSE) listed company announced this week that it had finalised a deal with MMI Strategic Investments Proprietary for the disposal of South African stockbroking division, Imara S.P. Reid (ISPR).
“The board of Imara Holdings Limited is pleased to announce that all conditions precedent for the disposal of Imara S.P. Reid Proprietary Limited have now been fulfilled. Accordingly, the effective date of the disposal was 12 June 2015,” said the company in a statement.
Registered in Botswana, Imara also has presence in several countries including Angola, South Africa and the UK, as well as associate offices in Malawi, Mauritius, Zambia, Zimbabwe, Nigeria, Kenya and Namibia.
Although historically ISPR had been an important contributor to the group, Imara is streamlining its business portfolio due to an increase in online share trading, escalating regulatory and compliance costs that led to the growing pressure and competition for independent stockbroking companies in South Africa.
In response, the board took the decision to review various options relating to the company and its future earnings contribution to the group.
These included the investment of further working capital for the company to grow and increase its service offering and market share and as an alternative the disposal of the company.
Imara S.P. Reid – established in 1938 – is one of South Africa’s oldest stockbrokers.
Profit after tax for the six-month period ended 31 October 2014 of P10.94 million, while total comprehensive income amounted to P13.49 million and profit after tax attributable to shareholders amounted to P9.02 million.
This compares with the profit after tax of P5.90 million reported for the corresponding prior period, total comprehensive income of P5.37 million and profit after tax attributable to shareholders of P3.15 million.
This represented a substantially improved earnings performance and a marked improvement in the attributable earnings, which increased by more than 186 percent to P9.02 million.
“The asset management division continues to be the main contributor to profitability and cash flow, but new redemptions, a change in performance fee criteria and a general decline in equity markets are likely to negatively impact earnings in the second half of the year,” stated Imara.
The corporate finance division reported particularly strong results in the first half year following the conclusion of several regional mandates, in particular in Zambia.
During this period, the divisions of the group were again profitable. In Botswana, Imara provides a range of specialised financial products and services among them asset management (institutional and private client), corporate finance and advisory services, stockbroking (Imara Capital Securities), trust and administration services.