Cape Town - Brimstone Investment, the empowerment company, was changing its investment tack in a bid to secure a 30 percent rise in headline earnings in the year ahead, Fred Robertson, the chief executive, said yesterday.
Speaking at the release of the company's maiden results, he noted that Brimstone's baptism of fire on the JSE had prompted management to pursue an investment strategy that would secure meaningful stakes in companies where it could add value and influence management decisions.
"We've moved from an initial phase which was essentially opportunistic in nature because of the circumstances which existed, to one in which we will concentrate on a smaller number of substantial investments to which we can add value, be empowering and make a difference," he said.
Robertson said Brimstone, which notched up headline earnings of 8c a share in the year to September 30, boasted cash balances of over R80 million.
"We are hoping to boost this figure to R150 million by trading in some investments in the next few months, which will place us in a strong position to take swift advantage of investment opportunities."
He said consumer industries and pharmaceuticals were two sectors that Brimstone would target for investment in the months ahead.
Robertson acknowledged that Brimstone had been punished by perceptions that it had invested in "dusty" industries such as clothing manufacturing (House of Monatic) and fishing (Sea Harvest).
"We are still very optimistic about House of Monatic, which we view more as a brand building business than a clothing manufacturer."
He said House of Monatic owned well-known brands such as Carducci, Yves St Laurent, Cravateur and Embassy, which could extend its ranges into accessories such as belts, boxer shorts, watches and luggage.
"One must also remember that Brimstone is also a stakeholder in businesses like House of Busby and Brandcorp," he added.
Turning to the results for the period under review, Robertson said management was relatively happy in the circumstances but realised that the company could have done a lot better.
Net attributable income (including an exceptional profit of R18,3 million relating to the sale of Norwich shares) came in at R28,9 million, or 22,3c a share.
Brimstone's operating subsidiaries chipped in R9,2 million compared with the almost R18 million generated from trading in the listed strategic portfolio.
The company's listed trading portfolio yielded a loss of R2,4 million, but this was offset by about R9 million in interest earned.
Brimstone closed at R1,30 on the JSE yesterday, down 6c and well off its stated net asset value of R2,60 to R2,70 a share.
