VenFin`s financial results were underpinned by a strong performance by cellular operator Vodacom, which increased its contribution to the investment group`s bottom line by 27%.
A segmental analysis of the group`s earnings show that headline earnings from telecommunications investments rose to R491 million this year compared with R404 million in 2003.
Technology investments contributed headline earnings of R33 million from a previous recorded loss of R1 million. Media investments did a turnaround with a contribution of R25 million from a previous loss of R28 million.
Financial and risk services investments saw a drop in headline earnings contributions to R117 million from R135 million in 2003 and corporate contributions declined to R74 million from a previous R155 million.
The results for the year ended 30 June were presented in Cape Town yesterday evening, and show that apart from Vodacom, good contributions were expected from VenFin`s other technology investments, which include Dimension Data, FrontRange, Psitek and Idion.
VenFin also has significant investment stakes in the automated vehicle locating company Tracker, as well as eTV and financial services group Alexander Forbes.
According to the VenFin results, Vodacom increased its contribution to headline earnings by 27.7%, from R376 million to R480 million.
Dillie Malherbe, CEO of VenFin, says he expects contributions from Vodacom to increase next year.
VenFin now owns 15% of Vodacom`s equity after buying HCI`s stake last year. (HCI is the major shareholder in eTV.)
The investment group has a $100 million bond with Dimension Data, and Malherbe says VenFin is satisfied that the South African-grown group, which is also listed in London, is "doing what it has to, to turn its business around".
Malherbe says Dimension Data has indicated its plans by splitting the role of chairman (Jeremy Ord) and CEO with the appointment of Brett Dawson as CEO. He also welcomed the news of the R380 million black empowerment deal in Dimension Data`s South African operations that will be headed by Andile Ngcaba.
Earlier this year VenFin invested R38 million in JSE-listed FrontRange, an international player in customer relationship management software solutions, giving VenFin an effective 11.1% interest as at the end of the year.
Malherbe says the FrontRange investment presents VenFin with an excellent arbitrage opportunity due to its local development costs and foreign earnings potential. The company has good prospects in extending its market leadership position, he says.
VenFin now holds a 34.99% stake in software development group Idion after acquiring Canadian company DataMirror`s shares. Malherbe says the revenue stream from Idion is not significant yet, "but the pipeline is growing".
For the first time, eTV made a positive contribution of R22 million compared to a loss of R24 million in the previous year, demonstrating a positive effect of R46 million year-on-year. eTV`s turnaround is largely attributable to a significant growth in its share of advertising revenues.
Tracker also performed strongly, with its input to headline earnings doubling from R8 million to R16 million, while GenuOne significantly reduced attributable losses from R22 million to R6 million. Net interest income from cash resources also added 9% (2003: 19%) to group earnings.
VenFin`s headline earnings per share increased by 16.3% to 151.4c (2003: 130.2c).
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