DURBAN - AFRICAN Rainbow Capital Investments (ARC Investments) said yesterday that its investment in Rain, the mobile-only network, has reported strong client growth during Covid-19 as consumers spent more money on data, resulting in accelerated earnings for the six months to the end of December.
ARC Investments, which holds a 20.4 percent interest in Rain, said this resulted in Rain achieving positive earnings before interest, tax, depreciation and amortisation for the first time since its formal launch three years ago.
As a result, the value of ARC Investments in Rain increased by R382 million during the period, and the value of its shareholding in the telecommunications business currently stands at R3.49 billion.
ARC Investments is a leading South African empowerment investment holding company incorporated in Mauritius, and is listed on the JSE and A2X Markets. African Rainbow Capital, a wholly owned subsidiary of Dr Patrice Motsepe’s Ubuntu-Botho Investments, owns a 51.1 percent stake in ARC Investments.
ARC Investments has a diversified portfolio, which includes digital bank TymeBank, nutrient producer Kropz plc and Afrimat, a leading black-empowered supplier to the resources, industrial minerals, mining, road, rail and construction sectors.
ARC Investments said the Covid-19 pandemic and the resultant national lockdown had a mixed impact on its portfolio of 50 businesses: some businesses were impacted favourably, while others were impacted adversely.
The value of ARC Investments’ intrinsic portfolio increased by 15 percent to R12.8bn, up from R11.1bn at the end of June, with cash in the ARC Fund of R455m to deploy for future investments.
Johan van der Merwe, the co-chief executive of African Rainbow Capital, said: “For those companies adversely impacted by the national lockdown, we – along with the management of the portfolio company – devised suitable interventions.
“We had to reassess some of the business plans and revise business performance targets to reflect the uncertainty and reality of the environment in which we operate.
“We also revisited some major investment decisions to assess strategy.
“We are delighted to say that, in most cases, management teams were able to effect good cost containment and, by so doing, adapt their businesses to the realities of the current environment,” Van der Merwe said.
TymeBank, launched in February 2019, has since sustained a customer growth rate of between 110 000 and 120 000 customers a month, and the bank expects to reach 3 million customers by the end of March.
ARC Financial Services injected an additional R505m into TymeBank during the period as part of the scheduled capital requirements for the new bank.
Johan van Zyl, the co-chief executive of African Rainbow Capital, said the firm was pleased with the progress that TymeBank management was making to achieve the bank’s major business objectives.
“We believe the bank’s simple, cost-effective and transparent banking fees continue to be a major drawcard for many consumers and more so in a highly uncertain economic time brought on by Covid-19.
“Overall, we are pleased with the performance of ARC Investments,” he said.
ARC Investments’ shares closed 2.13 percent higher at R3.79 on the JSE yesterday.