Brait S.A. - Interim Results

RNS No 7245r
BRAIT S.A.
22nd October 1998


Brait S.A. Societe Anonyme
(formerly Tolux S.A.)
Incorporated in Luxembourg (RC Luxembourg B-13861)

Interim results for the six months ended 30 September 1998

Salient Features

                           Rand              US$
Attributable earnings      R65.5 million     $11.5 million
   Change in attributable      + 78.5%           + 42.0%
earnings
Earnings per share             70.1 cents        12.3 cents
   Change in earnings per      + 64.6%           + 30.9%
share
Market capitalisation      R 1,832.3 million $ 312.1 million
Tangible net asset  value      858.1 cents       155.0 cents
per share


Group results

This  is the first reporting period of the new group and, in spite
of  falling markets and volatile operating conditions since  July,
it  is pleasing to announce earnings of R65.5 million which is  an
increase  of  78%  on  the comparable pro forma  result  of  R36.7
million in 1997.

Private equity has had a successful first half year.  It has  been
able   to  enhance  its  strategic  position  and  maintain  sound
operating performance in its portfolio companies.  Recent declines
in  listed  portfolio investments were more than offset  by  gains
achieved in the first quarter of the financial year.  The business
reported earnings of R26.2 million for the six months.

The  merchant banking operations have produced a profit  of  R28.7
million  for  the  half  year  despite  difficult  market  trading
conditions.   The only disappointing performance has been  in  our
trading operations where a loss was incurred over a period of time
due  to  a  sustained long position in gilts.  This was  partially
offset  by  profits on equity trading, resulting in a net  trading
loss before tax of R22 million.  The bank's secured corporate  and
private  lending  books  have grown  steadily.   The  asset  based
finance  team  has settled in quickly and is already  producing  a
good   deal   flow.   Our  corporate  finance   team   has   grown
substantially to meet the demands of increased deal  flow  arising
out  of  the group's expanded corporate client base.  The  project
finance  team is involved in a number of transactions  which  will
add  to earnings in the next six months.  Stockbroking is now well
established in the equity execution business and has produced good
results  overall.  The merchant banking profit base  is  now  well
diversified and positioned for strong growth for the rest  of  the
year.

During  the  period the group realised its interests in  its  non-
South  African  equities and bonds to reduce its  market  risk  to
these  securities and invested the proceeds of some US$27  million
in  cash instruments.  Earnings from this source, net of corporate
expenditure and profits realised from the disposal of investments,
amounted to R13.1 million.

The   interim   results  of  the  property  operations   shown   a
disappointing  loss  of  R2.7 million, primarily  because  of  the
effect  on  the  business  of current short-term  interest  rates.
Action  has been taken and a considerably smaller and restructured
operation should be profitable in the next six months.

The  group's  fund  management  operations  have  contributed   to
earnings for the first time.  Brait Asset Managers has achieved  a
satisfactory growth in revenues from a larger base of funds  under
management.  The South African unit trusts management business has
already achieved a break-even position after only seven months  of
operation.

African Alliance, which operates mainly in Swaziland and Botswana,
is now established and will contribute to year end earnings.

Developments

The  post  merger Brait group strategy and position is now  clear.
Brait  is  set  up  to partner solutions with the  full  range  of
potential clients across changing corporate South Africa.

Whether  it be private equity, advice, treasury, trading or  money
management   inputs   that   are   required,   these   experienced
complementary  skills  sets are in place  at  Brait.   The  teams,
individually  and  collectively,  are  capable  of  reaching   the
required  outcome.  From initial concept to final  implementation,
Brait  has  the independence, capital and knowledge to make  deals
happen.

South African Private Equity Fund III first closing

During  September Brait announced that it had secured  commitments
for an initial $325 million towards a target of US$500 million for
its  next  private  equity fund.  This fund  will  make  privately
negotiated equity and equity related investments in companies with
business  activities located principally in South  Africa.   Taken
together with Brait's existing funds, this positions the group  as
South Africa's foremost private equity fund manager with some $650
million under management.  This fund is one of the largest  single
direct  foreign investments in South Africa this year, and is  all
the  more  notable in that it has been raised in  highly  volatile
markets  at a time of negative sentiment towards emerging markets.
The  fund represents a major pool of unspent capital providing  an
extraordinary opportunity at a time when equity values  are  at  a
significantly lower level than for many years.  The fund  is  also
Africa's largest ever private equity fund and commitments  include
premier   US-based  emerging  market  investors  and   six   local
institutions.

Decimax restructuring

Brait  has  a  55%  interest in Decimax and management  holds  the
balance through its holding company, Decillion Limited, which  has
a  call  on Brait for 20% of Decimax's equity.  Decimax is  to  be
restructured into a broader risk management services group through
Decillion.  Brait is very supportive of these developments as they
will  substantially enhance the growth opportunities and the value
of  our  investment.  In terms of the deal Brait will  reduce  its
holding  to  an  investment  stake, partly  to  make  way  for  an
institutional  investor  who  will  inject  capital  and   elevate
Decillion's profile in the risk management arena.

Brait Properties restructuring

A  decision in principle has been taken to dispose of the mortgage
origination  and  franchise  activities  of  Brait  Properties  to
management.   The  commercial, trading and development  businesses
will  be  restructured into a focused property  investment-banking
operation.   This  disposal and restructuring is  expected  to  be
finalised before the financial year-end.

Asset Managers funds growth

Brait  Asset  Managers has recently secured the management  of  an
additional  R400 million of retirement funds and  a  R200  million
unlisted  drawdown fund.  It is now also managing a  further  R248
million  of  the  group's  unit trusts assets  and  is  positively
awaiting  the  outcome of the launch of a new small capitalisation
fund in which it has been appointed as asset manager.

Unit trusts launch success

Since  the  Brait unit trust management operation was launched  in
February   this   year   its  growth  has  considerably   exceeded
expectations.  Although it is the second newest unit trust company
in  the industry, its assets under management have grown to  place
it  20th  out  of the 26 management companies.  More  encouraging,
however,  were the net inflows into the group's unit  trusts  over
the  last quarter placing it 7th out of the 26.  This was  due  to
limited outflows rather than excessive inflows.  During the period
Brait's net redemption rate was 29% as opposed to an industry rate
of  71%,  placing  it  6th.   This was  achieved  from  a  focused
education  and  marketing effort geared towards the top  financial
planners in the country, as well as the performance of Brait Asset
Managers  who ensured that the funds performed in line with  their
determined benchmarks, despite volatile conditions.

Dividend

As  stated  in the listing particulars, the directors  propose  to
maintain  a  flexible  policy regarding the payment  of  dividends
particularly  during the formative and high growth period  of  the
group's  development.   The present state  of  the  South  African
financial markets presents unique opportunities for the  group  to
make   investments  in  circumstances  which  could   offer   very
attractive returns on capital.  Accordingly, no dividend has  been
proposed for the six month period ended 30 September 1998.

Prospects

Notwithstanding  the  current market  conditions,  the  group  has
achieved  its targets at this interim stage and is well positioned
to have a successful result for the full financial year.

Earnings  are  expected to increase considerably in the  next  six
months, but the present volatile market conditions could make  the
challenge  of  meeting the profit forecast  more  difficult.   The
diversity of our earnings base and our significant funds position,
is  however  encouraging.  The US dollar equivalent  forecast  was
based  on  an average Rand/Dollar exchange rate of 5.315 and  will
most  likely  be  adjusted down in light of the prevailing  market
rates.

In  the  context  of its private equity fund, diversified  banking
capabilities,  and  the unique value presently  on  offer  in  the
market, the longer term outlook for the group is very positive.

For and on behalf of the Board

M E King                      M A Barnes
Chairman                      Group Chief Executive


Group income statement

                            Rand                                US$
(millions)    Unaudited   Unaudited  Reviewed  Unaudited  Unaudited   Reviewed
             30 Sept 98 30 Sept 97  31 Mar 98 30 Sept 98 30 Sept 97  31 Mar 98
               6 months   6 Months  12 months   6 months   6 months  12 months
                       (Pro forma) (Pro forma)          (Pro forma)(Pro forma)

Net banking income 31.1       23.1      50.6         5.5        5.1       10.7
before taxation
Net non-banking 
income before
taxation           39.3       21.7      84.0         6.7        4.8       17.9

Net operating income    
before taxation    70.4       44.8     134.6        12.2        9.9       28.6
Taxation          (4.9)      (8.1)    (27.3)       (0.7)      (1.8)      (5.8)
                                                              
Earnings attributable 
to ordinary
shareholders       65.5       36.7     107.3        11.5        8.1       22.8
                                                              
Earnings per share    
(cents)            70.1       42.6     124.5        12.3        9.4       26.5
Shares in issue  
(weighted average) 93.5       86.2      86.2        93.5       86.2       86.2

Notes:

1.  The financial statements have been prepared in accordance with
    International   Accounting  Standards.    Where   appropriate,
    comparative figures have been restated.

2.  Brait SA changed its financial year end during the year to  31
    March 1999 at which date it will report its results for an  18
    month  period.  Accordingly, this report at 30 September  1998
    is  the second six month interim report for the financial year
    ending 31 March 1999.

3.  Currency  conversion  rates used for  Rand:   US$  were  1998:
    closing  rate  5.87, average rate 5.70 (1997:  4.67  and  4.56
    respectively).


Group balance sheet at 30 September

                             Rand                              US$
(millions)    Unaudited   Unaudited  Reviewed  Unaudited  Unaudited   Reviewed
             30 Sept 98  30 Sept 97 31 Mar 98 30 Sept 98 30 Sept 97  31 Mar 98
                        (Pro forma)(Pro forma)          (Pro forma)(Pro forma)

Shareholders' funds                                           
Share capital &  
premium          486.3       227.6      487.1       84.9       50.1      107.6
Non-distribu-
table reserves    37.1        35.5       36.9       10.0        9.8       10.2
Foreign   currency 
translation reserve
                  51.5        24.2       25.4      (9.1)      (4.2)     (13.5)
Distributable    
reserves         275.9       141.5      209.7       59.1       33.8       48.7
                                                              
Ordinary  shareholders'
interest         850.8       428.8      759.1      144.9       89.5      153.0
                                                              
Liabilities    1,433.3     1,391.4    1,541.2      244.2      298.3      306.2
Other long term   
liabilities       30.0        29.8       26.8        5.1        6.4        5.3
Deferred taxation 25.0        18.5       21.6        4.3        4.0        4.3
Bank overdraft     7.0         1.8       10.6        1.2        0.4        2.1
Other current
liabilities    1,371.3     1,341.3    1,482.2      233.6      287.5      294.5

                                                              
Assets         2,284.1     1,820.2    2,300.3      389.1      387.8      459.2
Other long term 
assets            82.5        43.9       36.2        9.0        9.4        7.2
Intangibles       48.5        42.7       50.8        8.3        9.1       10.5
Property and  
equipment         12.8        11.1       14.3        2.2        2.4        2.8
Investments      340.0       246.7      310.6       57.9       52.9       85.1
Cash             165.5        34.8      305.6       28.2        7.5       60.7
Other current 
assets         1,634.8     1,441.0    1,582.8      283.5      306.5      292.9
                 850.8       428.8      759.1      144.9       89.5      153.0


Analysis of attributable earnings
for the six months ended 30 September 1998

                              Rand                   %
                            millions
                                                      
Merchant banking              28.7                   44
Private equity                26.2                   40
Corporate                     13.1                   20
investment
Property services            (2.7)                   (4)
Funds management              0.2                    -
                              65.5                  100

END

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