Tradehold pleased with investment property increase

Carin Smith

Cape Town - The value of the investment properties of investment holding company Tradehold [JSE:TDH] has grown by 48.8% to £179.0m (R3.8bn) in the six months to August 2015, the company announced on Monday.

It said this is due to the strong expansion momentum begun last year. Although Tradehold is listed on the JSE, the bulk of its operating assets are located in the UK, which is why the company reports its results in pound sterling. Billionaire businessman Christo Wiese chairs the company.

According to Wiese, the growth in the company's investment properties was largely due to the acquisition in March of a portfolio of commercial properties for £40.9m. These were bought from the Collins Group of KwaZulu-Natal and are mostly in Namibia but also in Botswana, Zambia and Mozambique, with a further two in the UK.

Wiese said the transaction has also given Tradehold access to the Africa property expertise of the Collins Group.

Tradehold increased total assets by 45% to £300.8m for the six months, with operating profit rising by 73% to £9.1m compared to the corresponding period in the prior year. The bulk of its property assets remain in the UK, held through a 95% interest in the Moorgarth group of companies.

During the reporting period Moorgarth made its biggest acquisition to date when it bought the Broad Street Mall in Reading outside London for £65.4m, in a joint venture with South African-based Texton Property Fund.

Wiese said Tradehold's main focus in Africa has been on Namibia and Mozambique. In Namibia, work is progressing according to schedule on shopping centres in Rundu and Walvis Bay, while land has been secured for similar retail developments in Oshakati in the north and Gobabis in the east.

In Mozambique the company said good progress is being made on a major residential project which is being developed in Maputo for the US Embassy and American oil exploration company Anadarko. The first phase is to be completed by February and the second by October 2016.

Although not the main focus of the business, Tradehold said its financial services interests in the UK and South Africa both produced "pleasing results" during the reporting period.

In the UK, Tradehold has a 70% interest in the two operating companies of the Reward group, which provide short-term, asset-backed loans as well as invoice-discounting facilities to small and medium-sized businesses. Together they produced a pre-tax profit of £1.4m (£1.2m in 2014). In South Africa, Mettle Investments reported a net after-tax profit of £0.4m.

Wiese said he is "enthusiastic" about the potential of Mettle Solar, established during the reporting period, which rents out solar photovoltaic systems to businesses.

In June this year Wiese said Tradehold will focus on southern Africa to grow into African markets.

“Although the UK will for the foreseeable future remain the dominant component of our business, we are now also focusing on countries in southern Africa where we are gaining a solid foothold," he said at the time.

By late Monday morning Tradehold's share price was down 1.67% at R27.04.