R/€ = 15.26
R/$ = 14.41
Au 1057.95 $/oz
Pt 835.50 $/oz
Sep 19, 2003
VenFin to stick to its technology strategyBack
© Reuse this Technology, telecoms and media investment company VenFin – best known for its interests in Vodacom and e-TV– remains committed to its strategy of investing in local and international technology businesses, despite signifi-cant changes in market conditions and growing investment-community im-patience.
CEO Dillie Malherbe admitted last week that the radical shift in market conditions for technology companies since VenFin’s inception in September 2000 had resulted in many challenges as well as questions about the rationale for the group’s continued existence.
However, he said that the board had recently decided to confirm its mandate and strategy and that there were also, at present, no plans to delist the company and run it on a private basis.
He reported, though, that its focus was likely to shift away from start-up opportunities towards businesses that had survived the technology bubble, as well as ‘rerated’ larger opportunities.
The company also did not discount the prospect of possible disposals of smaller contributors so as to allow the company to concentrate on investments that could have a ‘material impact’ on VenFin.
This meant that its positions in operations such as technology company Inala, of Midrand, accounting-software company FRS and sports-branding and entertainment company Sail could well be re-evaluated.
Malherbe added that it would continue to be circumspect in doing deals, revealing that, of the 200 enquiries brought to it over the last year, it had only conducted seven detailed assessments and pursued two new investments.
“We are under no pressure to do deals, but our board has indicated that it will continue to support us in pursuing strategic opportunities.” Its biggest disappointment for the year came in the form of its security solutions provider, Intervid, which has been hit by managerial power struggles and financial underperformance.
Malherbe said VenFin “shared the blame” for failing to act decisively, but added that strong action was being taken to tackle the problems in the business. However, he added that VenFin still saw a future for the company given the fundamentals of the industry, but he acknowledged that the road back to financial health would be a slow one. Intervid aside, Malherbe insisted that other parts of the portfolio were performing well, particularly its investment into mobile phone network provider Vodacom, which is by far the biggest part of its portfolio. In fact, the Vodacom investment contributed more than half of the R665-million-worth of headline earnings reported by VenFin last week. Overall its headline earnings fell by 5,9% during the 12 months to June 2003, from R707-million for the 15 months to June 2002 – the group changed its year-end to June, from March, in 2002.
VenFin also viewed its 1999 investment into privately-owned telecoms solutions company PsiTech as another success. The company contributed R27-million to headline earnings in 2003, more than double its 2002 contribution of R11-million, and VenFin is confident of more to come.
VenFin’s 32% interest in PsiTech has been valued at R96-million.
VenFin was also optimistic about its investments in auto-recovery firm Tracker, in which it has a 23% interest, and e-TV, where it has a 33% stake.
In the longer-term, management at VenFin is likely to pay more attention to increasing the net asset value of the business, which is a key indicator of performance for an investment holding company. Commenting on prospects, Malherbe said that, given VenFin’s long-term outlook, there were a number of opportunities emerging for new technology investments both locally and abroad.
Edited by: Terence Creamer© Reuse this Comment Guidelines (150 word limit)
Creamer Media Editor
Other ICT News
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...