Edward West
10 November 2009
Johannesburg — BETTER investment returns, cost controls and higher operating revenue were the key drivers behind financial services group Cadiz Holdings' turnaround.
Headline earnings shot up 99,6% to R37,6m and diluted headline earnings per share rose 102,4% to 17,2c per share in the six months to September 30.
CEO Ram Barkai said he was "happy with the result". An important part of the challenge for the future would be to "push for growth".
"I may be cautious about the outlook for the market but it doesn't mean there won't be growth opportunities," he said.
The improvement over the six months had been on the operational as well as the investment side of the business.
In the past six months the strategy of actively managing capital and liquidity during the market downturn had reduced risk. This had resulted in a "significant improvement in the return on the investment and capital portfolio of R334,3m".
The healthy cash position meant Cadiz was in a good position to explore opportunities that might arise from time to time. Cadiz does not declare an interim dividend. Unit trust assets increased 58% due to good products, strong investment performances, and "the sales force was good".
Barkai was cautious about the outlook for the markets, though gold was trading at a record high, oil was "not exactly cheap", and the rand was back to R7,40/. The stock market had also recovered.
Nevertheless, "if anybody thinks it's going to be business as usual 12 months after the biggest financial crisis in 80 years, they are being naive", he said. "Despite recent market recovery, the real effects of the turmoil are not yet clear."
Over the past six months, total assets under management increased 21% to R55,1bn, with retail funds increasing 34% to R8,6bn.
This increase included growth of 58% in unit trust funds to just less than R4bn.
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