African Rainbow Capital Investments Limited (ARC Investments), incorporated in Mauritius, released an update on its third-quarter performance. This report covers the period ending March 31, 2024, and includes key developments through April 2024.
Economic Challenges and Resilience
The macro environment posed significant challenges, including high interest rates and unemployment. Despite these, some portfolio companies showed resilience. Disruptions to the electricity supply decreased towards the end of the quarter.
Performance of Key Investments
Rain
RainOne saw steady month-on-month growth, driven by the positive reception of the 101 device. Customer migration from legacy plans to newer offerings improved collections and retention rates. The company met its monthly financial targets during the period.
Kropz Plc
Kropz Elandsfontein faced production challenges in the first quarter. Management is addressing issues related to ore variability, production bottlenecks, liberation, and flotation. Despite these challenges, Kropz sold 80,771 tonnes of phosphate concentrate. The installation of an additional centrifuge is expected to stabilize and boost production.
Bluespec Group
Bluespec is on track to meet its growth targets, driven by innovations in the insurance space. Its subsidiary, Weelee, opened its first wholesale mega vehicle warehouse. This development is expected to drive retail growth despite a competitive market.
Ooba
Ooba maintained its market share despite high inflation and interest rates. Management introduced innovative customer and banking solutions, showing promising early results. The financial performance remains on track, with key metrics closely monitored.
Agricultural Portfolio
ARC is consolidating its agri-sector investments to create long-term growth and contribute to food security. The agri portfolio demonstrated strong financial performance, dividend yields, and growth potential.
Upstream Group
The Upstream Group met financial expectations despite a tightening credit environment. The group’s diversified client base helps mitigate concentration risk. More consumers are entering debt review processes earlier, increasing demand for Upstream’s services.
Financial Services Portfolio
TymeBank
TymeBank and GoTymeBank have a combined customer base of 12.4 million. The group’s annualized gross revenue run rate is $175 million, with net operating income at $110 million. The deposit base is $600 million, and the lending portfolio is $165 million. TymeBank is expected to achieve sustained profitability by June 2024.
GoTyme Bank
GoTyme Bank recently acquired Savii, a salary-based lender in the Philippines. This acquisition will enable GoTyme Bank to offer a wider range of financial products. The bank’s shareholders increased their stake, boosting Tyme Group’s economic interest above 50%.
Crossfin
Crossfin’s entities performed well despite a tough trading environment. Lesaka Technologies acquired Adumo for R1.6 billion. ARC opted to receive Lesaka shares. The deal is expected to finalize in Q3 2024.
Capital Legacy
Capital Legacy maintained impressive growth, distinguishing itself with its estate administration insurance product. The company is expanding resources to maximize its partnership with Sanlam.
GoSolr
GoSolr maintained steady performance with consistent solar installations. The effectiveness of management’s marketing strategies led to increased leads and sales.
Table: Key Financial Metrics
| Metric | Value |
|---|---|
| TymeBank Customers | 9.2 million |
| GoTymeBank Customers | 3.2 million |
| Monthly New Customers | 450,000 |
| Annualized Gross Revenue | $175 million |
| Annualized Net Operating Income | $110 million |
| Combined Deposit Base | $600 million |
| Lending Portfolio | $165 million |
Outlook and Future Prospects
ARC Investments remains optimistic about future growth prospects. The company is committed to identifying promising investment opportunities despite economic challenges. Continued improvement in electricity supply disruptions is expected to support this growth.
Conclusion
ARC Investments provided a comprehensive update on its third-quarter performance. The company’s diversified portfolio demonstrated resilience in a challenging economic environment. ARC remains focused on long-term growth and sustainable investment opportunities.