Our opinion on the current state of BRIMSTON(BRT)Brimstone (BRT) is a black-controlled investment holding company with a diverse portfolio of holdings. It owns:
1. 54.2% of Sea Harvest, which is a listed fishing company and has a market capitalization of just over R4.5bn.
2. 100% of Lion of Africa, a loss-making insurance company, which decided in November 2018 to cease operations and close its doors.
3. 100% of House of Monatic, a loss-making clothing manufacturer.
4. 24% of Oceana, the largest fishing company in South Africa with a market capitalization of R8.6bn. Brimstone is increasing its shareholding by buying 8m shares from Tiger Brands, which will take its holding to 22.9%.
5. 6.1% of Grindrod.
6. 18% of Aon Re Africa.
7. 25% of South African Enterprise Development.
8. 49.8% of Vuna Fishing Company.
9. 12.8% of Milpark Education.
10. 25% of Obsidian (a black-owned investment holding firm positioned to benefit from the rollout of the NHI), which it increased to 80% for R35.7m in January 2020.
Brimstone also holds a variety of other smaller shareholdings in property, healthcare, 3.9% of Long4Life, and 5.3% of Stadio. The company has been selling down its stakes in Life Healthcare, Lion of Africa, House of Monatic, Equites, Multichoice, and Phuthuma Nathi. It has used the proceeds to pay down R1bn of its debt.
In its results for the year to 31st December 2023, the company reported revenue up 5.1% and headline earnings per share (HEPS) up 4%. The company said, "The year under review was characterised by high inflation, a weaker Rand and high interest rates. Continued load shedding and pressure in the domestic transport network, in particular the ports, have weighed heavily on the economy. The high unemployment rate continued to impact consumer spending in an environment where the consumer was already under pressure."
Both ordinary and "N" shares are thinly traded, but the ordinary shares are worse. We regard the ordinary share as too thinly traded for private investors and, unless they begin to unbundle the portfolio, the extra value is likely to remain locked in. On 24th May 2024, the company reported that its intrinsic net asset value (NAV) had fallen 6.7% by the end of March 2024 to 1132c per share.