BRIMSTONE INVESTMENT CORPORATION LIMITED - Voluntary quarterly intrinsic net asset value disclosure

            
BRN BRT
Voluntary quarterly intrinsic net asset value disclosure

Brimstone Investment Corporation Limited
(Incorporated in the Republic of South Africa)
Registration number 1995/010442/06
Share Code: BRT ISIN: ZAE000015277
Share Code: BRN ISIN: ZAE000015285
("Brimstone" or the Company)

Voluntary Quarterly Intrinsic Net Asset Value (NAV) disclosure

A full analysis of the Intrinsic NAV, together with applicable explanations for the quarter ended 30 September 2020 is set out below.

Summary                                                                  Change      30 September          31 December          31 December       31 December    31 December
                                                            Dec 2019 to Sep 2020             2020                 2019                 2018              2017           2016
                                                                             (%)
Intrinsic NAV of Brimstone (Rm)                                             (6.2)         3 142.3              3 349.3              3 899.6           4 317.9        5 133.9
Book NAV (Rm)                                                                2.3          2 573.0              2 516.2              2 713.4           2 782.0        2 427.1
Intrinsic NAV per share (cents)                                           (12.4)         1 243.0              1 419.3              1 615.1           1 800.9        2 139.5
Fully diluted Intrinsic NAV per share (cents)                             (12.7)         1 231.9              1 410.3              1 598.8           1 750.9        2 043.1
Book NAV per share (cents)                                                  (4.5)         1 018.0              1 066.3              1 123.8           1 160.3        1 011.5
Market price per share (cents)
   Ordinary shares                                                         (41.0)             451                  765                1 050             1 300          1 299
   N Ordinary shares                                                     (31.0)             535                  775                  949             1 125          1 200
Discount to Intrinsic NAV
  Ordinary shares                                                                            63.7%                46.1%                35.0%             27.8%          39.3%
  N Ordinary shares                                                                        57.0%                45.4%                41.2%             37.5%          43.9%

Intrinsic NAV analysis by asset

An analysis of the Intrinsic NAV of Brimstone as at 30 September 2020 is set out below, including the valuation basis of each asset.
Where applicable, Intrinsic NAV is net of ring-fenced debt and potential CGT relating to that asset.

 Asset                     %      Share price           Share     Valuation basis           Gross value          Debt           CGT       September      September         Gross      December      December     Increase /
                         held           at 30        price at                                    (R'000)       (R'000)       (R'000)           2020           2020     portfolio          2019          2019      (Decrease)
                                    September              31                                                                             Intrinsic      Intrinsic     weighting     Intrinsic     Intrinsic             (%)
                                         2020        December                                                                            NAV (R'000)       NAV per            (%)          NAV       NAV per
                                                         2019                                                                                                share                      (R'000)        share
                                                                                                                                                            (cents)                                   (cents)
 Oceana                25.0%           62.00           61.55     Market value per share      2 022 881             -             -       2 022 881          800.2          30.1     1 349 405         571.8           39,9
 Sea Harvest           54.2%           14.20           14.55     Market value per share      2 264 849             -             -       2 264 849          895.9          33.7     2 320 273         983.3           (8,9)
 Life Healthcare 3       3.4%           17.06           24.65     Market value per share        844 433     (1 319 663)    (166 122)       (641 353)        (253.7)         12.6      (279 758)       (118.6)         114,0
 Life Healthcare         100%                                     Option valuation              491 351              -     (110 063)        381 288          150.8           7.3        94 001          39.8          278,6
 Zero Cost Collar4
 Equites                 2.3%           17.00           20.00     Market value per share        237 297              -      (12 250)        225 047           89.0           3.5       642 394         272.2          (67,3)
 Phuthuma Nathi          2.8%          109.49          107.40     Market value per share        207 530              -            -         207 530           82.1           3.1       421 989         178.8          (54,1)
 Multichoice Group       0.0%               -          116.50     Market value per share              -              -            -               -              -           0.0       105 170          44.6         (100,0)
 Stadio & Milpark        5.3%            1.36            2.00     Market value per share        105 055              -            -         105 055           41.6           1.6       127 721          54.1          (23,2)
                                                                  & cost
 Investment            100.0%                                     Capitalisation rate            71 234              -            -          71 234           28.2           1.1        71 234          30.2           (6,7)
 properties
 FPG Property            9.9%                                     Book value                    180 847              -      (10 759)        170 088           67.3           2.7       164 852          69.9           (3,7)
 Fund
 MTN Zakhele Futhi       1.5%           10.00           13.20     Market value per share         18 188              -            -          18 188            7.2           0.3        24 008          10.2          (29,3)
 Aon Re Africa          18.0%                                     PE valuation                   74 308              -      (14 857)         59 450           23.5           1.1        40 835          17.3           35,9
 House of Monatic      100.0%                                     Adjusted book value            12 751              -            -          12 751            5.0           0.2        23 516          10.0          (49,4)
 Other investments    Various                                     Valuation                     145 972              -      (11 716)        134 256           53.1           2.2        99 612          42.2           25,8
 Cash / (net debt)     100.0%                                     Book value                     37 544     (2 078 935)     152 471      (1 888 919)        (747.2)          0.6    (1 855 906)       (786.5)          (5,0)

                                                                                              6 714 238     (3 398 598)    (173 295)      3 142 345          1 243         100.0     3 349 345         1 419          (12,4)

 Intrinsic NAV per share (cents)                                                                  2 656         (1 344)         (69)          1 243
 Fully diluted Intrinsic NAV per share (cents)                                                    2 629         (1 329)         (68)          1 232
 
Notes:
 1. Based on 253 million shares (December 2019: 236 million shares) in issue, net of treasury shares as calculated below:
                                                                                                                                                   Number of shares in          Fully diluted number
                                                                                                                                                                 issue                     of shares
    Gross number of shares in issue                                                                                                                        268 514 108                   268 514 108
    Treasury shares (fully diluted number is net of notionally realised shares issued to staff and management share trusts and FSPs)                       (15 710 628)                  (12 856 144)
                                                                                                                                                           252 803 480                   255 657 964
    Outstanding in the money share options                                                                                                                                                            -
    Net shares in issue for INAV purposes                                                                                                                  252 803 480                   255 657 964

 2. No CGT provided on shareholding in Sea Harvest and Oceana due to potential use of the corporate relief provisions of the Income Tax Act.
 3. Brimstone has entered into a securities lending arrangement with Nedgroup Securities. At the end of the lending arrangement, Nedgroup Securities will be obligated to return the shares to
   Brimstone.
 4. The Zero Cost Collar derivative over the Life Healthcare investment was valued as at 30 September 2020.

The INAV information presented has been prepared on a basis consistent with that used in the integrated report for the year ended 31 December 2019, which is available on the Companys website at
www.brimstone.co.za.

The above information is the responsibility of the directors and has not been reviewed or reported on by the Companys auditors.

20 November 2020

Sponsor

Nedbank Corporate and Investment Banking

Date: 20-11-2020 04:00:00
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