Christo Wiese’s Brait reduces loss with $81.45 million recapitalization

Oluwatosin Racheal Alabi -

Key Points:

  • Brait SE, partly owned by South African billionaire Christo Wiese, reported a R171-million ($216.83 million) loss for the year ending March 31, 2024.
  • Strong performances from Virgin Active and Premier boost overall results, with revenue and membership growth in key markets.
  • The recapitalization plan aims to reduce debt, extend bond maturities, and provide flexibility for future growth, increasing investor confidence.

Brait SE, a leading investment holding company partly owned by South African billionaire businessman Christo Wiese, reported a R171-million ($216.83 million) loss for the year ending March 31, 2024. This reveals an improvement from the R928-million ($54.77 million) loss in the previous financial year (FY2023).

The reduced loss is attributed to Brait’s R1.5 billion($81.45 million) recapitalization aimed at reducing debt and providing working capital. The group’s headline loss per share for FY2024 was 13 cents, down from 70 cents the previous year while the net asset value per share also decreased by eight percent, from R7.06 ($0.39) in FY2023 to R6.52 ($0.36).

Recapitalization and market response

Billionaires.Africa reported that Brait announced a recapitalization plan that includes a fully underwritten equity capital raise of up to R1.5 billion ($81.45 million). The plan aims to use the proceeds for general working capital, potential investments, and debt repayment while the maturity date for both classes of bonds will be extended to the end of 2027.

“The recapitalization meaningfully reduces the group’s debt and strengthens the Brait balance sheet, providing a runway for all stakeholders to benefit from the continued recovery in Virgin Active and New Look and the growth in Premier,” the group noted.

This recapitalization has strengthened Brait’s balance sheet, supporting the recovery of Virgin Active and New Look, and fostering growth in Premier. Following the announcement, the group’s share price gained around 3 percent in morning trade, indicating investor confidence

“The maturity of Brait’s bonds in December 2024 requires a recapitalization of the group’s balance sheet to provide the requisite flexibility to optimise the exit window for these assets and to avoid being forced into expedient sales of Brait’s three remaining assets when market conditions are not conducive to value maximisation for shareholders,” it said.

Performance of Key Assets

Virgin Active (67-percent of assets)

Virgin Active, which represents 67 percent of Brait’s assets, showed great performance across major territories. In Southern Africa, revenue for the first four months increased by 16 percent year-on-year, with net membership growth of 26,000 members. In Italy, revenue grew by 23 percent, with 11,000 new members.

The UK saw a 13-percent increase in revenue and 9,000 new members, while Asia Pacific’s revenue rose by 22%, increasing the total active membership base to 63,000.

Premier (18-percent of assets)

Premier, a fast-moving consumer goods company, reported a 26.4-percent increase in operating profit, reaching R1.6 billion for the financial year ending March 31, 2024. The company was listed on the JSE just over a year ago.

New Look (7-percentof Assets)

New Look, a clothing retailer operating in the UK and Ireland, reported an 8.8-percent drop in revenue. The decline was attributed to unseasonal weather and a rapidly changing competitive landscape.

“Unseasonal weather and a rapidly changing competitive landscape continue to be key factors for the management to navigate,” Brait noted.

Strategic initiatives and future plans

Brait’s recapitalization gives the company the flexibility to choose the best time to sell its assets, allowing it to redeem bonds and return capital to stakeholders sooner. This approach aims to maximize shareholder value and avoid selling assets in poor market conditions. The group remains committed to operational excellence and strategic partnerships to drive growth and success.

Founded in 1999, Brait has become a top investment group in Africa. It owns businesses in fitness and health clubs, food production, and clothing retail. Brait plays a key role in the region’s economy, strengthening its leadership across the continent.