Insurance does well for Reinet as tobacco dwindles


Insurance does well for Reinet as tobacco dwindles

Published Date: 2019-11-20 | Source: Stephen Gunnion | Author: Stephen Gunnion

Insurance does well for Reinet as tobacco dwindles

The investment company is seeing a growing contribution Pension Insurance Corporation as British American Tobacco stays under pressure.

British American Tobacco continues to weigh on the value of Reinet, whose biggest investment remains its stake in the cigarette maker. However, its holding in unlisted UK insurer Pension Insurance Corporation Group is going the other way, increasing in value and playing a more important role in the investment company's portfolio.

British American Tobacco (BAT) now makes up 48.6% of Reinet's net asset value (NAV), down from 52.2% in March, while Pension Insurance Corporation Group contributes 34.2% to its NAV, up from 30.6% previously. The company's NAV declined by 1.8% to €4.7 billion at the end of September from €4.83 billion in March. However, it said it still reflected a compound return of 10% a year in euro terms since March 2009, including dividends paid. Offsetting the decrease in BAT's value over the six months, as well as its latest dividend payment to shareholders, were dividends of €39 million received from its investment in BAT and increases in the estimated fair value of certain of its other investments, which include a number of private equity holdings.

As it reports in euro, it said the weakening of sterling and the rand against the euro, offset by a stronger US dollar, resulted in an overall decrease in the value of certain assets and liabilities in euro terms.

The company's net asset value per share rose 0.6% to €25.44 over the period due to a smaller number of shares in issue. It spent €67 million buying back 4.44 million of its own shares over the six months. The share buybacks were aimed at addressing the large discount it continues to create at relative to the intrinsic value of its underlying assets.

It has commitments totalling €28 million in respect of new and existing investments made during the period, after applying funding of €38 million.

Its shares rose 1.6% to R291.77 yesterday.

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