Imara Holdings has warned its shareholders of volatility in the market that has continued to have impact across the group’s divisions.
The Africa focused and Botswana Stock Exchange listed investment banking outfit that provides investment opportunities in the continent said all divisions were profitable again.
“Global markets continue to be characterised by volatility and high levels of uncertainty and equity markets generally, declined in the second quarter with this trend continuing into quarter three,” the company said.
“This has been particularly detrimental to the Asset Management Division but has also negatively impacted the Stockbroking Division.”
The group said profit after tax for the six month period ended 31 October, 2014, amounted to P10.94 million while total comprehensive income amounted to P13.49 million and profit after tax attributable to shareholders amounted to P9.02 million.
This compares with the profit after tax of P5.90 million reported for the corresponding prior period, total comprehensive income of P5.37 million and profit after tax attributable to shareholders of P3.15 million.
Results for the six month period ended 31 October, 2014, include a share of profits from associates of P2.68 million, of which P2.46 million relates to Stockbrokers Zambia Limited, who reported exceptionally strong results.
Imara said the Asset Management Division continues to be the main contributor to profitability and cash flow but new redemptions, a change in performance fee criteria and a general decline in equity markets are likely to negatively impact earnings in the second half of the year.
Its Corporate Finance Division reported particularly strong results in the first half year following the conclusion of several regional mandates, in particular in Zambia.
Equally, the Stockbroking Division reported results in line with those for the same period in the prior year. The division was characterised by a strong performance in Zimbabwe in the first quarter, but a disappointing second quarter, lower levels of commission income than in the prior period / year in Botswana and Malawi, but a significantly improved performance in South Africa and Zambia.
Imara said the Consolidated Statement of Financial Position remains solid with total assets of P287.55 million, which was a decrease of 11 percent from the October 2013 position and a 16 percent decrease from April 2014.
“The movements are largely attributable to activities in the Stockbroking Division and more specifically to the cut off dates for accounting and reporting purposes, which impact directly on “due to” and “due from” brokerage positions.”
Imara also warned that political uncertainty in Zimbabwe has exacerbated negative foreign investor perceptions and this is likely to result in lower brokerage revenues in the second half from the Zimbabwe business.
“On a positive note the license for the Angolan Stockbroking business has been received, subject to the fulfillment of certain conditions, and this will allow the commencement of stockbroking operations in Angola. These stockbroking activities will not result in a positive contribution to earnings in the financial year to 30 April 2015.”