African Rainbow Capital FY intrinsic net asset value up 21.5%

African Rainbow Capital (ARC), an empowerment investment group, has reported a significant increase in its annual intrinsic net asset value, rising by 21.5% to R18.6 billion. The impressive growth was largely driven by the strong performance of its key investments in Rain and Tymebank. Despite this remarkable achievement, ARC continues to trade at a notable discount to its market value, sparking discussions on its future moves to narrow this gap. Johan van der Merwe, co-CEO of African Rainbow Capital, discussed the company's performance and future outlook in a recent CNBC Africa interview. Reflecting on the past year, van der Merwe expressed confidence in maintaining momentum in the face of challenges and uncertainties, emphasizing the positive prospects looking ahead. The co-CEO highlighted the standout performances of Rain and Tymebank, which collectively make up almost half of ARC's portfolio. Tymebank's success in breaking even and turning profitable on a monthly basis in South Africa, as well as its expansion into Southeast Asia, particularly in the Philippines, has drawn significant investor interest. With plans to venture into Vietnam and Indonesia, van der Merwe underscored the potential for substantial growth in these markets. As for other companies in ARC's investment portfolio, van der Merwe noted satisfactory performance and resilience amid tough economic conditions. The co-CEO discussed progress in the phosphate mining sector, indicating positive developments and future profitability prospects. Van der Merwe also highlighted the success of Linbrook, the logistics platform, which has seen substantial growth and is poised for further expansion with new international clients. Despite the strong performance of its investee companies, ARC continues to trade at a discount to its net asset value. Van der Merwe acknowledged the market perception and outlined efforts to narrow the discount through focused portfolio management and profitable ventures. He expressed optimism that as early-stage investments mature and generate cash flow, the market perception of ARC would improve. Van der Merwe addressed rumors of potential partnerships, including with Canal Plus, should their deal to acquire multichoice materialize. ARC's role as an empowerment partner with credibility and financial strength positions it well for such opportunities. While acknowledging ongoing discussions, van der Merwe recognized the hurdles involved in finalizing such deals and remained cautious about the outcomes. The interview also touched upon ARC's global aspirations and its commitment to exploring opportunities in various regions. The co-CEO's candid responses shed light on ARC's strategic direction and its proactive approach to unlocking value for investors. As the company continues to navigate the market dynamics and pursue growth opportunities, stakeholders await further developments and potential value accretive deals on the horizon.