R/€ = 13.85
R/$ = 10.93
Au 1231.31 $/oz
Pt 1248.50 $/oz
Sep 19, 2003
VenFin to stick to its technology strategyBack
SECURITY|E-TV|FRS|Inala|Intervid|Midrand|PsiTech|Road|Sail|Security|Tracker|VenFin|Vodacom|Security|Local And International Technology Businesses|Local And InternationalnTechnology Businesses|Media Investment|Security|Sports-branding|Technology|Technology Bubble|Dillie Malherbe|Power|Security|Hewlett Packard Photosmart R707 Digital Camera|Cellular Telephone
© 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)
Other Science and Technology News
While increasing energy costs and the necessity to reduce carbon dioxide (CO2) emissions call for more energy efficient cars, trucks, machines and plants, the steel and stainless steel industries have focused on developing new steel grades with higher strength for...
Recent Research Reports
This Week's Magazine
Integrated energy and chemical company Sasol has partnered with Unisa Graduate School of Business Leadership (SBL) professor and founder and CEO of PanAvest Partnership Dr Douglas Boateng to publish a series of books on executive supply chain management aimed at...
The World Wide Fund for Nature’s (WWF’s) 2014 Living Planet Index (LPI) indicates that there has been a 52% decline in vertebrate species since 1970. The Index tracked the trends of 10 000 discrete populations of over 3000 vertebrate species between 1970 and 2010.
Rwanda has joined a number of East African countries seeking to import electricity from Ethiopia as its demand grows. After it became apparent several generation project it is implementing will not come on stream early enough, now plans to import 400 MW from Ethiopia...
Metrorail’s first new passenger train will arrive in November next year, says Passenger Rail Agency of South Africa (PRASA) CEO Lucky Montana. “Next year we will be able to put our hands around the infrastructure and equipment we have been talking about for so long.”
The Competition Commission has launched an investigation into what it says are “price fixing, market division and collusive tendering in the market for the manufacture and supply of automotive components to original equipment manufacturers” (OEMs, or vehicle...