Imara offloads subsidiary for P100m
Brian Benza | Wednesday December 17, 2014 19:53
The Botswana Stock Exchange (BSE) listed company announced on Monday that it had entered into an agreement with MMI Strategic Investments Proprietary for the disposal of South African stockbroking division, Imara S.P. Reid (ISPR).
Registered in Botswana, Imara also has presence in several countries including Angola, South Africa and the UK, as well as associate offices in Malawi, Mauritius, Zambia and Zimbabwe, Nigeria, Kenya and Namibia.
In a statement, Imara said that although historically ISPR had been an important contributor to the group, an increase in online share trading, escalating regulatory and compliance costs has led to growing pressure and competition for independent stockbroking companies in South Africa.
“In response, the board took the decision to review various options relating to the company and its future earnings contribution to the group. These included the investment of further working capital for the company to grow and increase its service offering and market share, and as an alternative the disposal of the company. The board’s view was that the company, which remains an attractive investment within the stockbroking industry in South Africa, needs a parent willing and able to fund its growth needs,” added the statement.
Imara S.P. Reid – established in 1938 – is one of South Africa’s oldest stockbrokers.
Imara, which has been trading under a cautionary for the past three months, said further details of the transaction, along with statutory information on IHL and notice of an extraordinary general meeting will be published in a circular to shareholders in January 2015.
The IHL board further advised shareholders to continue to exercise caution in any share dealings. Listed on the local bourse’s Venture Capital Board, Imara closed yesterday’s trading on the BSE at 210 Thebe.
On the back of an exceptional performance by the asset management division, Imara recorded its best performance since 2008 to register a P16 million profit in the financial year ended April 2014 from a 1.5 million loss in the previous period.
Total assets, which amounted to P344.22 million, reflected 36% increase over the prior year, largely attributable to stockbroking activities.
Cash flows for the year were positive by P12.29 million which the company directors said was encouraging following the negative trend of recent years. The group closed the year with cash and cash equivalents of P83.75 million and with no borrowings.
In Botswana, Imara provides a range of specialised financial products and services among them Asset management (institutional and private client), corporate finance and advisory services, Stockbroking (Imara capital Securities), trust and administration services.