Vunani, the listed, black-owned financial services group, reported a strong annual operational performance, but earnings were impacted by insurance-related negative fair value adjustments.
Attributable income fell 14% to R52.3 million in the year to February 28 compared to R60.6m the previous year.
These adjustments related to the insurance business, which was hurt by volatility in the markets, as well as increased permanent health insurance claims, CEO Ethan Dube said in a statement yesterday.
This followed a solid 10% growth in revenue to R752.4m after growth in most of the divisions, while operating profit increased a robust 33% to R150.1m. An 11 cents dividend was declared compared to 14c the prior year.
“Vunani has performed admirably through a difficult period. We improved and protected our operating margin and our focus now will be to cautiously grow with an eye on numerous opportunities that will be evaluated on the basis that they enhance the medium- to long-term vision of the group,” said Dube.
The fund management segment, which includes the investments in Vunani Fund Managers and Vunani Fund Managers Botswana, increased revenue to R188.5m from R180.7m.
The reportable segment profit amounted to R21.2m for the year compared to R37.4m at February 28, 2022. Vunani Fund Managers assets under management (AUM) decreased from R61.9bn at February 28, 2022 to R45.6bn at February 28, 2023, which led to a decline in performance.
Vunani Fund Managers Botswana’s AUM increased to R11.3bn from R10.1bn.
The asset administration segment, which includes Fairheads Benefit Services and the investment in Verso Group, contributed revenue of R191.7m compared to R172.7m the previous year, and reported a well up R33.7m profit when compared with R19.8m in 2022.
Fairheads’ AUM ended the year at R9.9bn, up from R9.2bn at February 28, 2022.
The prior year, Oracle Insurance was affected by high death claims in eSwatini. The negative impact of Covid-19 was less, owing to the increased take-up in vaccinations which, in turn, improved profitability of the business.
The segment generated higher revenue of R303.6m from R271.9m and made a R14.6m profit compared to R11.8m in the prior year.
There was an impairment reversal of the value in-force intangible asset of R12.3m compared to R10.3m the previous year. This was due to improved profitability of certain income streams.
The institutional securities broking segment, which includes equity, derivative and capital market trading services to institutional clients, generated revenue of R25.4m, down from R30.9m in 2022 due to lower trading volumes in the markets.
As a result, the segment reported a loss compared to a profit of R1.4m in 2022.
BUSINESS REPORT