Vunani Limited (VUN) Earnings Call Transcript & Summary

Good morning, Butana, and good morning, everybody. I think we're ready to go. It's just 11:00. So a warm welcome, on a clearly chilly morning, to all the guests. Welcome to Vunani Limited's annual results presentation for the 12 months ending 28th February. And this presentation session is being recorded, as a reminder, and there will be some time afterwards for Q&A. And I now hand over to the CEO, Butana Khoza. Over to you, sir.

Thank you, Jacques. Taf, I'm going to ask you to actually post the presentation.

There are some -- there is some interference here, Taf. I wouldn't mind asking you to please -- other than the presenters to please mute your microphone.

Taf? Taf? Can you just see the front page. It's not the interim ones. It's the -- yes, if you can just go to the next slide. It's the final -- it's the annual results -- 6 months. So anyway... All right. Ladies and gentlemen, thanks very much for joining us this morning. My name is Butana Khoza. I'm the Group CEO of Vunani Limited. With me and who will be going through the results presentation for the period ended 28 February, 2021, is Tafadzwa Mika, who is the Group FD. The results were released on Monday, and there has been some media commentary. But what I hope to do is take you through salient aspects of the results and give you the opportunity to perhaps ask questions about the aspects of the results that may have not been clear. But to give you a sense of the group today, Vunani did unbundle its private equity portfolio in February 2021. It is now a focused financial services business with a diverse suite of financial services product offerings. The group currently has just under ZAR 60 billion of assets under management, which is significantly up on where we were in the same period last year, which was [ ZAR 46.7 billion. ] It also has ZAR 7.3 billion assets under administration, which is just marginally up on the ZAR 6.7 billion we had at the end of 2021. It's been listed under the JSE for over 16 years, about 330 staff. And as the result, we show, we generated a turnover of ZAR 558.6 million for the 12 months to February 2021. The business runs off a strong owner-managed culture. It generated about ZAR 96.9 million of cash from operating activities, which was up from ZAR 73 million a year ago. And a highlight, key future of this year's results has really been the significant negative fair value adjustments and impairments in the current financial year. Taf? I don't know if need to be easy -- how easy to be to read this particular slide. But in essence, it's a business that was started in 2004 as a management buyout by the 3 individuals that you see at the bottom of the page, of which I'm one, probably the junior of the 3. And it's -- the business has gone through a number of different iterations since then and, notably, certain acquisitions, which were made, which have formed the basis of the group over the years. The Q1 to possibly note, other than the listing, I would say, was an acquisition of the -- a controlling interest in our fund management business, which has become a hallmark of the business where -- 2010, where we acquired a 51% control; and then in 2011, where we acquired 100% control of that business. Then a second element of it was the acquisition of 70% of the beneficiary admin group, which was in 2015. And then in 2017, we acquired 100% of that particular business. And then in 2019, 2020, it was the acquisition of Oracle Life, the insurance pillar in the business as well as the acquisition of a controlling interest in Vunani Fund Managers Botswana, which was previously STANLIB Botswana. I suppose a key element to mention at this point is that the most recent corporate event order has been the unbundling of the private equity portfolio, which I'll just explain in a little detail just following this slide, which is going to list on Equities Express Exchange during the month of June. And to the extent that you were a shareholder on the requisite last day to register, certain shares would have been unbundled to you because that unbundling was done on a one-for-one basis, and you will then hold shares in a separate listed vehicle called Vunani Capital Partners. The financial services businesses will remain listed through the Vunani Limited vehicle. And so from this presentation point of view, there is a focus on the continuing operations and how they perform as they now perform the foundation of the Vunani Limited group and listing going forward. The ownership is about 77%. And as I said, we've got over 300 staff. A key feature to perhaps just note at this moment is that both Ethan Dube and Mark Anderson and I have worked together for more than 20 years, in fact, over 23 years to be precise. And we really look forward to this next iteration in Vunani's journey. Taf? So I'd just like to flip through -- Taf, if you don't mind, there is a slide showing the nonexecutive Directors. I think the point to make here is really that the Board is diverse-skilled -- mature and diverse range of skilled non-executive Directors, not young people. They spend in number of different industries. Lionel Jacobs, fairly well known in the markets as a Director in the Bidvest Group and lately in Long Life -- I think it's called Long4Life, not Long Life. And Gordon Nzalo has been a partner in 2 of the notable audit firms, both KPMG and PwC. John Macey currently runs an accounting firm. And Nambita is the legal counsel for one of the big listed groups. Just go back forward. And then Sithembiso, a businessman and entrepreneur -- in KZN; and Marcel Golding, you would know from HCI. I've also taken the time to include key executives within the group, the heads of the various subsidiary businesses. Snowy Masakale runs Vunani Fund Managers. She took over from me. I ran Vunani Fund Managers for 5.5 years, starting in 2014 up until February 2020. And she took over from me. She comes with CFP degree, having worked as a senior executive within [ RMI Insurance ] and also at Absa Asset Managers. Thabo Moipolai, CEO of Vunani Fund Managers Botswana. And she was formerly CEO of STANLIB Botswana, which was the forerunner to Vunani Fund Managers Botswana and so led the management buyout that was effectively done by Vunani last year. David Hurford is the CEO of Fairheads. Has been with the group for a number of years. He was also a promoter of Fairheads Financial Services and has recently taken over from Richard Krepelka as CEO. Richard reached retirement age and has actually retired, and I'll make reference to that a little later in the presentation. Shaun Naidoo is Head of Vunani Corporate Finance. He's the young gun amongst the various heads of businesses. I think he joined in 2017. I may be wrong. Time escapes me, but he's been around for a while and took over CEO just over 2 years or thereabouts, and he runs Corporate Finance. And then lastly, unfortunately -- if you could, Taf? I don't have much left for David -- if you can just move on, Taf, for David Takis. But he's been in the industry for a number of years. He's got a B.Com. Started out as a financial planner for a leading financial IFA in Durban before joining Alexander Forbes in Swaziland, now known as Eswatini, even joined Momentum in 2009 initially as a General Manager and rose up the ranks to, ultimately, become country manager for Momentum Metropolitan. He led the management buyout with Vunani of that particular group in 2019-2020. So the group structure pre the unbundling is shown. It was just illustrated there. It really shows what comprises the financial services operations of the private equity portfolio. So it's really the boxes to the right that have been unbundled into the Vunani Capital Partners, a vehicle which will list on Equity Express during the course of the month. This is -- the flags represent the countries in which we are actually operational at the moment. That's 3 countries with designs to go into a fourth, Namibia. The fund management segments are in South Africa and Botswana. And then institutional securities broking, beneficiary admin and advisory services are in South Africa, and the insurance segment is located in Eswatini. So that will be the structure and the segments that comprise the group at the moment. Five segments described there: Beneficiary Admin, Fund Management, Insurance, and Investment Banking and not Private Equity. So that box has actually fallen away. And if you were to look at them, that's basically the group structure. As I said, 5 segments and the boxes at the bottom are the companies that comprise those various segments. I'll go into a bit more depth with those when we actually look at the segmental performance. So just to briefly go through an economic overview, I will issue a disclaimer upfront and say that I'm not an expert on economic issues. So if you're planning to anguish me with some really detailed questions about economics, I'd just like to declare my interest right now. My response is going to be very limited. If I don't sound like I'm answering it correctly, just understand I'm hacking through it. But I think we're all very familiar with the challenges that we've had this year. I think it has been -- or last year and this year so far. It's been really extremely challenging. We have this rapidly spreading global pandemic and a series of lockdown at an unprecedented scale. And I think trading conditions were very tight. I think there's stringent containment measures that were introduced. And obviously, all this would have had an impact on trading conditions. And so the domestic economy didn't escape the direct impact of this crisis. We were initially forced into a hard lockdown, which was very difficult because South Africa was already in a recession. It was always going to be a very challenging year for the generation of earnings and, obviously, the impact of COVID just exacerbated that. The South African authorities responded by offering us various support measures. We've seen interest rates come down by 300 basis points, although as told, we've come to the end of that particular cycle, remains to be seen. We just had a report on the quarterly growth for the first quarter 2021, and it wasn't really that exciting, 1.1%. And so it's very clear that we need some more of a stimulus. I think where we've been very fortunate is that our resources sector has seen -- has done extremely well through the rise in commodity prices, which is great from a South African perspective. However, I think we're still very dependent on the global trading conditions since we do rely heavily on exports for foreign currency and to mitigate against imported inflation. We are in a season at the moment where we are buoyed by a very strong rand. We're not really sure. We think it's more dollar weakness than rand strength and as there is some nervousness around job creation in the U.S. and whether there has really been a strong recovery. Taf, we can move forward. So just from a financial markets point of view, I think the first quarter of 2021 really saw a very strong continuation of this market risk on sentiment. We've seen very strong equity markets, which really have been anticipating additional liquidity. And if you look at -- I've shown a graph there with emerging market performance relative to -- South African market performance relative to emerging market performance with MSCI. And you can see that the trend is very strongly in favor. It's tracking the emerging market performance, although it seems to have performed slightly better. And so while these markets are trending higher, we're very aware that there's heightened risk in the markets. And you can see that through bond yields, particularly in the U.S. 10-year treasury, which is -- has moved higher. And South Africa has followed suit. I think the Fed hasn't really come to the party. They seem to be adopting a wait-and-see approach and seem to be willing to let inflation run ahead of the 2% target. I think in domestic markets, we've also seen a rebound, and we've seen a sharp rise in commodity prices, as I say. But what we're concerned about is really whether this is underpinned by strong fundamentals and valuations, which seems to be running ahead of fundamentals. And for us, the concern there is It could be indicating the potential for some market correction and hopefully not a bubble about to be pricked. Obviously, for Vunani, this is a big concern. We're highly -- we run businesses that are highly correlated to the markets. And so a strong correction in the markets is likely to have an impact in certain of those businesses. We saw that for one of our businesses, which is Fairheads, that did actually have an impact in the first half of the year, although the improvement in financial markets in the second half seems to have corrected that, but it did create a bit of a lag in the earnings. I'd just like to now move a bit more into the results themselves. We did report results in August. Just to give you a sense of what that would have looked like from a headline point of view, I think overall, 2021 is better than 2020 on a headline earnings and a revenue point of view. From a revenue point of view, obviously, that's been driven by the consolidation for a full year of the insurance segment. That's Oracle as well as Vunani Fund Managers Botswana. That would have driven a large part of the increase in the revenues. But on the headline side, we know that the insurance segment struggle and so the contribution to headline earnings would have been subdued. I think that's where a strong push has come through from 4 of the 5 other segments, particularly from the fund management segment and the beneficiary admin segment pushing through quite nicely. And a good performance, let it be said, from our advisory services business as well as our stockbroking business relative to how they performed historically, but I'll go into a bit more detail. We are compelled to reflect the performance of the unbundled portfolio by virtue of the fact that it was part of the group for 11 of the 12 months, and so we reflected it as discontinued operations. But you can actually tell from there that it's been hard growing, although the second half of the year has been a lot kind to the headline earnings line compared to the -- no, it hasn't. It's actually been the other way around. It's been a lot harder in second half of the year than the first half of the year for the private equity portfolio. But overall, I think that it's been a positive year from, as I say, the majority of the segments if you compare to how they performed the previous year. We provided a bit of a performance snapshot graphically, if you look at it on a segmental basis, fund management pushed through very strongly. Beneficiary admin generate -- revenue generation was very good, marginally higher than last year. Our advisory business on a relative basis is obviously small, but still very positive compared to the previous year, and so was stockbroking on a revenue level. And that big bar to the extreme right shows the push of the insurance segment, which added ZAR 217 million to revenue in the current financial year. But the way it's telling it's really in our EBITDA, and that adjusting for fair value adjustments excluded. We're just trying to look at noncash-related adjustments; fund managers pushing through, as I said, strongly; and then the mature beneficiary admin business, really also contributing very strong EBITDA. But the other 2 segments: stockbroking and advisory also producing positive cash generation. Stockbroking in particular, that's a big turnaround for them because they have had negative sort of earnings for almost 2 years running. And then the insurance segment, which had a very, very hard time, and we'll go into a bit more detail on what actually transpired there but I think a big, big impact -- COVID impact on that particular business. But just going through the segments. Starting with fund management. You can see the trend in AUM really growing very, very nicely. In South Africa, I think it's been a couple of years of really good growth. That business now manages -- at February, it was ZAR 51.5 billion. The information I have is that it continues to push on quite nicely. Revenue is about 18% above the previous year. Overall -- overhead management was good, 6.7% below the prior year. It's coming in below budget. The environment is very tough. It's not very conducive to client engagement and business development, but we tick hard from the fact that this team has now been together for quite a while. In fact, the senior team since probably 2011 and so going on 10 years, but there's a good cadre of leadership and portfolio management that is giving that business quite a bit of a stability. The brand, I think, is now fairly recognized in the market, which is actually represented by the push that we're seeing in the AUM. And we think there's still quite significant scope for growth in that particular business. Botswana, it's the first full year they've been part of the group. They made a small profit, which we're pleased about. They did lose a significant client of about BWP 800, which was a setback for them. But they've got a good team. Business development have been out there trying to actually claw back a lot of what they've lost and we've seen there a good recovery to -- as the year has progressed. And the business has had a tough year bedding down and transitioning from being a part of the STANLIB group, but they started to settle down, and I suppose it was to be expected. When you are a part -- you have a number, like [ according ] to a very strong and very big financial services group, going standalone can be quite a daunting task to set up your own systems and run everything off your back -- off your own infrastructure. I think one of the positive developments for that particular business is being shortlisted by the Botswana Public Offices Pension Fund for quite a significant mandate. And I can say now because there's been quite a lot of media news in Botswana about it that we've been actually chosen as the preferred service provider for the full amount of ZAR 3 billion. So it's still subject to further due diligences by BPOPF. And so should that be successful, the funds under management could grow by -- up on 75%. So really good basis for that -- for growth in our fund management platform. Margins in Botswana tend to be higher than in South Africa. So we really hope to see those small bars that you see on the extreme right of that AUM graph rise quite a bit. And hopefully, we should see result of that particular news start to come through, perhaps not so strongly in 2021 because we're already 3 to 4 months into the financial year. But hopefully, we will start to see the benefit of that maybe in the second half of the financial year, hopefully, depends on how we can -- how quickly we can bid down the mandating process. Beneficiary admin, this is a very mature business. Margins here are better than the fund management business, managed ZAR 7 billion on aggregate -- around ZAR 7 billion for the whole year. It hasn't really grown its assets under administration. And so you will get marginal growth in revenue and EBITDA, so that's a stable producer. It is dominant in its sector, which is good, which means that from a new business gain point of view, it stands a good chance whenever there are shifts in awarding mandates. However, it doesn't happen frequently, which is why you would see very small increments. But nevertheless, it has performed better than it did last year, maybe slightly lower than what we expected at a PAT level, but that's really because of goodwill impairments there. There have been changes in management in that business, but fortunately for us, these are not whirlwind changes. It's people -- it's executives that were coming up for retirement who have opted to actually take the retirement. Fortunately, for us, we're not losing those executives. They will remain on the Board, so we have access to their expertise. And we've transitioned people who have been with the business for a number of years and who understand it intimately. And so I think that business will remain stable. What is positive is that, that business has acquired an additional ZAR 1.5 billion book, which is busy onboarding. As I mentioned, when you do have events like this, it does generally tend to have a big push or impact on revenue and earnings. So we expect an improvement in revenue and earnings. But again, because it's a question of transition that book onto the platform, we think that the benefit of that will probably more likely be seen in the second half of the year rather than in the first half. In a bid to try and work off the strength of the platform, a business called financials -- Fairhead Financial Services was created a little more than 1.5 years ago, which focuses on trade tracing. That business made a loss, I think, last year, if I'm not mistaken, or slightly -- or it was breakeven, but it's starting to push through quite nicely. It's making a profit now. David Hurford has been instrumental in building that business. I'm sure we will continue to receive his attention going forward. And then advisory services, feisty little business run by Shaun Naidoo, focuses on mergers and acquisitions, restructuring, capital raising. It's also a [ JAC ] sponsor and has recently been approved as a valuation expert. So this business has really -- it performed extremely well in a very tough environment. We know that the environment doesn't really suit a lot of merger and equity and acquisition activity. And so to perform where -- at a level where there's been significant growth in revenue and earnings is quite laudable under the circumstances. I think the guys are very ambitious and highly driven. They have found it going tough. I think in an environment like this, deals don't get concluded as quickly as you'd expect. And so even though that was forecasted to perform much better than they actually ended up performing, I think it's still a very laudable achievement. And we're excited about what this team can do going forward. And then stockbroking. Again, big turnaround for this particular business. You would see the EBITDA numbers, big percentage increase, and that's really a reversal from a loss-making position. But revenues are up quite significantly there as well. We've had to rightsize this business when the going was really tough and are really running it very lean. We've been trying to find other areas where it can really make its mark. And it's been very smart in leveraging the group network starting to venture into transition management, which is really a form of broking, which is targeted at corporates as well as retirement funds, really away from the mainstay of stockbroking. Have been able to do some really good business and to secure us some good corporate clients. So that has helped the business trade very well. I think, similarly, our capital markets business has traded extremely well in an environment and a sector with rising yields. It's really going to be tough going to maintain the performance that these businesses have been able to obtain in the current financial year. But we have a highly entrepreneurial group of people, and we're really hoping that we're going to have a push-through in these particular businesses. We have had some setbacks in these businesses in our capital markets business. We had the unfortunate situation where the head of our capital markets business passed away just over a week or a week ago, which was really quite a sad development. Sarah Pretorius had been with us since this business -- since they founded this business, He's been in the market for many, many years. He was really an affable and very gentle individual, very well liked by the market. This business was actually ranked very strongly by the market on the agency trading side of fixed interest, and he was a big factor in that. And it's a really big loss. We're obviously putting our minds to consider how we can continue to support that business. It still has a team of very competent and very strong individuals who are the part of that business on both the money market and bond trading side. [ Martin Berninger, ] who was his partner, is still with the business and remains committed. And we were looking to give that business quite a bit of support going forward. On the security side, the CEO left us during the year. I've been doubling up as acting CEO of that business. Fortunately, for me, it's not really a new area. I have -- I was once a stockbroker. In fact, I qualified as a stockbroker probably more than 18 years ago and ran that business for more than 5 years. It is a lean team. I am supporting them. And so far, it's going well. We will be replacing the CEO in due course. And then onto the Insurance segment. When we reported our half year numbers, it seemed to be going fairly well. They seem to have escaped the first wave of COVID. Unfortunately, the second half of the year wasn't that great. Really, the claims came through quite strongly on the life side and that approved life book. And when it...

It appears that Butana's audio has been lost. I think we should just -- Taf, I don't know if you want to step in or just wait -- let's wait a minute or so until Butana can redial back here again?

Yes. Let me step in. I'm not sure what's happening with his audio, but let me just step in and I'll let him jump back here as soon as he's back online. Yes. Good morning, everybody. As Butana was mentioning that the Oracle Life business was impacted by the impact of COVID during the second wave. Effectively, February was -- February and March were very bad months in terms of plans, and that effectively necessitated actuarial adjustments to take into account. The actual claims recognized during the year, which effectively resulted in negative fair value adjustments of about ZAR 44 million in relation to that business. The business still has adequate capital adequacy cover despite the losses. But obviously, this is something that we monitor quite closely on an ongoing basis to ensure that the business can continue. I think the business has -- oh, you're back. Sorry, I just jumped in.

Yes. My apologies. apparently -- so we still live in a world of digital connection and latency and all its vagaries, which we're really trying to get on top of. So I was saying that, effectively, there have been big fair value adjustments and impairments on the back of experience in claims. That's really driven by actuarial valuations. And that has had a major, major impact on group results. It's not really on the cash side, and the group still has very strong capital to support future liabilities and adequate capital adequacy cover. So far, the claims experience seems to have been limited to a period around the first quarter of the financial years -- financial year and, in particular, the last 2 months of the first quarter, which really was kind of coincided with that big period of the second wave. So far, we haven't seen that, and we -- our fingers were in cross that that's the worst we will see with this particular business. It is a small country, small market, where -- and Oracle is quite a big player in that particular market. But so far, it seems to have been limited in that particular period, and let's hope we've seen the worst going forward. Insurance side, in short-term insurance side, took less of a brand. It was more profitable. It will not operate in a highly fragmented and small market. It really has a very strong market share, and so it is holding its own under very difficult conditions. It has just done a small acquisition. It's actually consolidated the Medscheme business in Eswatini, which will give it a very strong footprint to actually protect itself against the competition. Taf? Okay. What I'm going to do is just pause and allow Taf to run with a commentary on the results as they've actually been presented, maybe explain to you some of the moves which have actually transpired in some of the line items and annual results, which are more sort of accounting-orientated, for those of you who have an interest, and then I will come back and sum up at the end.

Thank you, Butana, and good morning to everybody on the call. I'll start off with -- sort of like the key metrics for the group that we look at. For the year, our revenue has increased by 62% to ZAR 558 million. I think this has been driven by underlying -- the consolidation of full year of the Oracle insurance business as well as the Vunani fund management business. The other divisions -- the other segments did also see increased growth in revenue in the fund management business, the institutional stockbroking and the advisory business. Overall, our EPS has increased by 1,100% from about open ZAR 0.006 to ZAR 0.072. I think this is -- the EPS basically details the performance of the stripping out any nonroutine items. I think it does show that despite the tough year after the impact of the insurance segment not doing well, overall, our EPS has improved. As Butana has mentioned, our cash generation from operating activities has grown up -- has grown by about 36%, so 31% from the prior year to about ZAR 96 million. I think it shows that the underlying businesses are able to generate cash on an ongoing basis. Our other financial liabilities have decreased by about ZAR 57 million in the current year. This is a result of the repayments that have been done during the year as well as certain liabilities that were unbundled as part of the restructure of the group. We have declared 7.5% dividend as a final dividend for the year. And we have declared an interim dividend of ZAR 0.05 when we reach our interim results. If we look at various segments contribution, the asset administration business contributed ZAR 19.6 million, up from ZAR 16.6 million in the prior year. The fund management business was the next biggest contributor with about ZAR 18 million in profit after tax compared to ZAR 10.6 million. And then we had a big turnaround in the institutional securities broking businesses, which went from a loss of about ZAR 3 million, ZAR 3.7 million in the last year to ZAR 14.1 million. I think as Butana mentioned, that is driven by the restructuring of the group as well as additional new transition management revenue streams, which is an aid in the profitability. Our advisory business has also seen a significant increase. It was about breakeven last year and completed ZAR 5.5 million in the current year. The insurance business has seen an overall decrease of -- compared to a profit of ZAR 35.6 million, they made a loss of ZAR 37.2 million. I think this is driven by the actuarial adjustments that were insured in the life business as a result of their claims, the experience as well as the impairment the intangible asset that was created, I think, as a result of a decrease in the profitability offsetting revenue items in the business -- in that business. We touched on the revenue a bit earlier. But as we mentioned earlier, the insurance business has significantly contributed to the increase in the revenue for the group as shown by the gross. If we look at the other main line items on the statement of comprehensive income, we have -- it was received from investments of about ZAR 18.3 million, which is a significant increase from the prior year of about ZAR 6 million. And I think this is a result of the interest that's been earned from the various insurance investments. The prior year, we had recognized the bargain purchase gain on the acquisition of Oracle and Vunani Fund Managers Botswana of ZAR 34.9 million. And in the current year, we finalized the acquisition -- purchase price allocation for the Vunani Fund Managers Botswana business, which started in a smaller gain. The investment revenue is mainly from the dividends received from the various insurance investments. And our other income has increased significantly to about ZAR 26 million from about ZAR 9 million in the prior year as a result of mainly the reinsurance recoveries that were -- came from the Oracle business. If we move on to the other items of the statement of comprehensive income, fair value adjustments. As mentioned before, we had fair value adjustments of about ZAR 44 million compared to ZAR 10.8 million. This is mainly driven by the actuarial adjustments in the insurance business. The other impairments related to the expected credit loss adjustments on the other investments in groups, which has gone up to about -- from about -- to ZAR 7 million from ZAR 2.4 million. As I mentioned earlier, we did impair the intangible assets that was recognized on the insurance business by ZAR 41.5 million as a result of a decrease in profitability of certain line items in that business. If we look at the overall -- the other operating expenses, overall, operating expenses have increased by 62% when compared to the prior year. I think this is driven -- this is mainly the impact of consolidating Vunani Fund Managers Botswana and Oracle for the full year. Our stock costs make up 48%. Our overall costs, which is in line with the financial services business, the next biggest expense related to the insurance-related expenses, which is the reinsurance premiums as well as the claims incurred, which account for 21% of our operating expenses. The balance of the other expenses related to communication, information, costs, professional fees and other operating expenses. I've just presented the net asset value position at year-end compared to the prior year. In 2020, it still included the commodities trading investment -- commodities trading and other investment segments, which have been discontinued as of year-end. We have, in the current year, the biggest contributor to the net asset value of the group relates to the asset administration business, followed by the fund management -- sorry, followed by the insurance signal and then the fund management business and then very small contributions from the advisory and institutional stockbroking businesses. If we look at the statement of financial position and significant movements for the current year, we'll see that the investment contract liabilities have gone up significantly. This is as a result of the actuarial adjustments that we raised at year-end. Our other financial liabilities have reduced compared to the prior year as a result of repayments that occurred during the year. Our insurance-related investments have increased in the current year, and this is as a result of the asset allocation strategies that will be implemented by the insurance team. Our other investments have gone down from ZAR 107 million to about ZAR 11 million as the bulk of these investments were unbundled at -- in February as part of the restructure of the group. Our intangible assets have decreased from the current -- from the prior year as a result of the impairment I mentioned as well as the amortization on the tangible assets. What I have presented is just reconciliation of cash flows generated from the continuing operations effectively. What I've done is taken a look at what our profits from operating utilities was -- and then basically worked with backwards effectively. The numbers are impacted by items such as depreciation and amortization impairments as well as fair value adjustments and other noncash items. But overall, what we can see here is that the group's cash generation ability has improved when compared to the prior year. I think it shows that the underlying businesses are performing well. We did declare a dividend for the first 6 months of ZAR 0.05, as I mentioned before, and that was paid on 21 December, 2020. I would like to have over to Butana, just to chat about the prospects for the year. Thank you.

Thanks, Taf. I am dependent on you to just move the slides forward. I think just -- maybe just to touch on COVID. I think it's still with us. I think the majority of our businesses really have been able to trade through the conditions and the various levels of lockdown. It's not ideal not having all the teams in one place to get that energy going. But so far, I think under the difficult trading conditions, our staffers have held up very, very well. We are concerned about the markets and effectively when they start to reflect fundamentals because trading conditions have been subdued and a correction in the markets, could have a major impact across all our businesses. I think right now, our view is, we try and keep our staff and the environment as safe as possible. We are a very people-focused business, and so losing key professionals will have a significant impact on our business. And so we're encouraging all our staff to maintain social distancing and all the safety recommendations that have actually been put out by government and other stakeholders. We're also very sensitive, obviously, to the impact that it's had on the communities where we operate. We've been particularly keen to make sure that where we are providing support, particularly in the form of nurseries to emerging talent that has kicked up, even though it may actually be coming with different conditions. Some of our businesses are requiring to log in to their investors from home. And so they will need, if needed, support in the form of laptops and access in terms of data. And so we're trying to make sure that both our staff and those community areas where we're providing support continue to receive the support going forward. We really hope that with the rollout of vaccines that we will see a mitigation of the conditions which you've seen thus far. We are concerned about the pace at which vaccinations are being rolled out, but all the information that is being sent out currently is that we seem to be ramping that up. And we -- hopefully in the next couple of months, we will see the incidence of vaccination rise quite significantly. So we can see those infections start to come down. Hopefully, that's what the vaccine actually does. So I think that's from a group point of view. We have the basis for what could be a very attractive financial services group. It is an emerging group. It's relatively small thus far, but I think it holds quite significant potential. As you'd have seen, apart -- apart for a difficult year for our insurance segments, it could have been a very decent year under very, very difficult trading conditions. Notwithstanding that, the group has decided to pay a final dividend of 7.5%, which will obviously be adjusted for withholding tax for those individuals who do not have the protections offered by the Tax Act. But I think the message that we're sending out is that we're pretty confident that we have businesses that can support a dividend-paying regime going forward. Obviously, subject to performance, the group did generate cash of close to ZAR 100 million. Effectively, the dividend declaration -- the final declaration brings takes our dividend -- total dividend payment to around 12.5%, which, if we consider where the price -- the share price has traded over the year, around ZAR 2.5, is around about a 5% dividend yield. We think that would be a good floor to maintain going forward. I think we've seen that companies that generate dividend yields around 5% and above on a consistent basis generally tend to get the rating in their share price. We're hoping that will be a future of our business. Obviously, one thing that we want to address as management is liquidity. I must say that it's probably highly unlikely that, that would be alleviated through an issuance of shares at this level. We would look for a bit of a strengthening in the share price before we would consider placing shares in the market. I'd say that guardedly situations change all the time, but for the time being, that is the situation. I think it bears saying that Taf had a slide around net asset valuation. It probably bears mentioning that we're not a deep asset-rich business anymore, now that we've divested the private equity portfolio. We don't have investment assets other than those in the insurance business to a large degree that we do -- would be revalued on an annual basis. And therefore, we're not an NAV play. We're effectively an EBITDA cash generation dividend yield play going forward. And one of the things that we hope we'll be able to do as part of future results announcements is give you perhaps our view and some guidance on some of the parts valuation of the underlying businesses just for investors to get a sense of what the real value of the share price could be going forward. Taf?