Monday, October 19, 2020

Affinities bears fruit early on

Afinitas Limited, the green field investment company incorporated early last year in Botswana has reported a profit for the first time since listing at the Botswana Stock Exchange (BSE).

The financial services company listed its shares on the local bourse mid-last year, looking to raise P28.8 million to finance its forays into Africa.

Before the listing, the company raised over P90 million through private placement from local fund managers African Alliance, Investec and Afinitas, which garnered them a respective shareholding of 25 percent, 7.5 percent and 5.5 percent each respectively.

Upon the completion of the listing on the Venture Capital of the BSE, Afinitas indicated its intentions to adopt a pan-African investment strategy and seek investments across diverse industry sectors.

This week, when reporting its maiden interim financial results for the period that ended June 2016 the company showed a profit of $33 216.00. Its financial statements are prepared in US Dollars which is the functional currency for the BSE-quoted company.

“This profit mainly reflects the income generated through Africa Events Limited. Going forward, as the new companies in the portfolio become profitable we expect this income stream to grow and become more diversified. Due to the seasonal nature of the conferencing business the financial performance reflected in the financial statements is unlikely to be replicated during the second half of the year,” reads part of the statement accompanying Afinitas’s interim results and signed by Board of Directors’ Chairman Lesang Magang.

At the time of the launch of the company last year, one of its directors, Leutlwetse Tumelo, said that in recent years Africa has experienced a period of rapid economic growth that may reflect a long term, self-sustaining and positive growth cycle.

According to Tumelo, the business climate in Africa is also improving due to a number of factors such as improved telecommunications and better governance in general. He further said that less intense business competition in Africa than in more developed markets may manifest itself in higher achievable rates of return on equity

“Interest in Africa from European funds is at an all-time high and that is driving the emergence of new investment opportunities within the continent. Afinitas is about the African story. We created a company that would leverage on Botswana’s IFSC and reputation as an attractive investment destination to launch into the rest of Africa,” said Tumelo.

Among other businesses across Africa, Afinitas owns Africa Events Limited or AEL which is an events management business that specialises in hosting Investment focused events & conferences. The flagship event in AEL is the annual Africa Financial Services Investment Conference. This event is attended by a wide range of Africa’s leading financial services companies and major global investors seeking investment opportunities in Africa.

Meanwhile, the company’s share price at the BSE is still struggling to surpass its P1.00 listing price. Financial analysts at Motswedi Securities, a local stock brokering firm, said this week that the positive earnings reported this week could boost investor confidence, “although with reasonable caution”.

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