Vunani brushes off profit decline


Vunani brushes off profit decline

Published Date: 2019-10-14 | Source: Stephen Gunnion | Author: Stephen Gunnion

Vunani brushes off profit decline

The group is looking for acquisitions to expand its diversified financial services offering.

Vunani is looking past a blip in first-half earnings as it positions itself to grow its financial services operations.

The group reported a share decline in profitability after community unrest disrupted operations at the main operating site of its commodities trading business earlier this year, resulting in an 80% decline in production. However, it said the disruptions had since been resolved and operations had restarted. It is a black economic empowerment partner to Anglo Coal

While it also blamed the tough economic environment for the downturn in its performance, it said its main operating businesses reported improved profitability over the six-month period.

Revenue and profit from its fund management and asset administration operations increased, but it earned less from advisory services and its institutional securities broking division still reported a loss, albeit lower, due to a decrease in trading volumes in the market. It said it had implemented a turnaround strategy to ensure the segment returned to profitability. Commodities trading, which includes Vunani Resources, swung from being the biggest contributor to profit last year to a loss this year as revenue from the division slumped 65%.

Total revenue fell 27% to R170.5 million in the six months to end-August and results from operating activities declined 36% to R25.8 million. Attributable profit dropped 31% to R17.4 million and basic and headline earnings per share also came in 31% lower at 10.8c.

It said it would continue to look for acquisitions that were in line with creating a diversified financial services business.

Its shares closed 0.5% higher at R2.10 in thin trade on Friday. They rose 16% on Thursday following the release of the results. The stock is illiquid, which can results in big swings.

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