BUSINESS PARTNERS RESULTS REFLECT IMPROVEMENT IN SME SECTOR
31 May 2012: Financial results for the year ended 31 March 2012 released by Business Partners Limited, a specialist risk finance company for formal small and medium enterprises (SMEs), reveal that the appetite for SME finance in South Africa is improving, despite the ongoing local and global economic challenges.
The group announced that the amount of funding advanced to SME’s increased 38.9% to R 803.4 million, from R 578.4 million in the previous financial year. This is the second highest level of advances achieved by the company in the last 15 years. 307 SMEs received finance from Business Partners Ltd, at an average value of R 2 405 000 per transaction.
During the period, the group’s portfolio of investments under management increased by 7,1% to R2,16 billion from R2,02 billion, while its investment property portfolio rose by 19,4% to R679,9 million from R569,2 million in 2011. 92 investments to the value of R220,7 million were approved for black entrepreneurs, while 133 investments amounting to R290,8 million were approved for female entrepreneurs. More than 13 200 employment opportunities were facilitated through the group’s investment activities.
According to Nazeem Martin, Managing Director of Business Partners Limited, the company is still positive about the outlook for SMEs and is aiming to achieve finance approvals of more than R 1 billion in the coming financial year.
“We are seeing less distress amongst our SME clients than a year ago. Unless there is a major global economic catastrophe, big business will continue to grow and consumer spend should improve. Simultaneously, we should soon see government’s ambitious, but much needed, infrastructure plans being rolled out. All of which augurs well for the SME sector and should filter through to small businesses.”
While the low interest rate environment is favourable for borrowers, it has impacted on the profitability of financers. The Group’s net profit amounted to R 100,1 million, a decrease of R 7,1 million or 6.6% compared to the prior year. Profits were also negatively impacted by the R14.2 million net cost incurred on the transfer of active members from the defined benefit pension fund to the defined contribution retirement fund, as well as the increase in the capital gains tax rate.
Martin says the company is looking to boost both its profits and development impact by investing in high growth businesses with high job growth potential in the technology, bio-technology, renewable energy and agro-processing sectors. “We currently see a great deal of growth opportunity for SMEs within these sectors. These sectors are growing at a rapid rate in South Africa and the opportunities for businesses active in or servicing these sectors are vast. We aim to enable SMEs in these sectors to gear up, in order to take advance of future economic opportunities.”
Martin says that overall, it seems that SMEs have regained confidence based on improved economic conditions. “Although we are still on a knife edge, given the some of the uncertainties in the global economy, we believe that SMEs are through the worst of it.”
About Business Partners:
Business Partners Limited is a specialist risk finance company for formal small and medium enterprises (SMEs) in South Africa, and selected African countries. The company actively supports entrepreneurial growth by providing financing, specialist sectoral knowledge and added-value services for viable small and medium businesses.
The group announced that the amount of funding advanced to SME’s increased 38.9% to R 803.4 million, from R 578.4 million in the previous financial year. This is the second highest level of advances achieved by the company in the last 15 years. 307 SMEs received finance from Business Partners Ltd, at an average value of R 2 405 000 per transaction.
During the period, the group’s portfolio of investments under management increased by 7,1% to R2,16 billion from R2,02 billion, while its investment property portfolio rose by 19,4% to R679,9 million from R569,2 million in 2011. 92 investments to the value of R220,7 million were approved for black entrepreneurs, while 133 investments amounting to R290,8 million were approved for female entrepreneurs. More than 13 200 employment opportunities were facilitated through the group’s investment activities.
According to Nazeem Martin, Managing Director of Business Partners Limited, the company is still positive about the outlook for SMEs and is aiming to achieve finance approvals of more than R 1 billion in the coming financial year.
“We are seeing less distress amongst our SME clients than a year ago. Unless there is a major global economic catastrophe, big business will continue to grow and consumer spend should improve. Simultaneously, we should soon see government’s ambitious, but much needed, infrastructure plans being rolled out. All of which augurs well for the SME sector and should filter through to small businesses.”
While the low interest rate environment is favourable for borrowers, it has impacted on the profitability of financers. The Group’s net profit amounted to R 100,1 million, a decrease of R 7,1 million or 6.6% compared to the prior year. Profits were also negatively impacted by the R14.2 million net cost incurred on the transfer of active members from the defined benefit pension fund to the defined contribution retirement fund, as well as the increase in the capital gains tax rate.
Martin says the company is looking to boost both its profits and development impact by investing in high growth businesses with high job growth potential in the technology, bio-technology, renewable energy and agro-processing sectors. “We currently see a great deal of growth opportunity for SMEs within these sectors. These sectors are growing at a rapid rate in South Africa and the opportunities for businesses active in or servicing these sectors are vast. We aim to enable SMEs in these sectors to gear up, in order to take advance of future economic opportunities.”
Martin says that overall, it seems that SMEs have regained confidence based on improved economic conditions. “Although we are still on a knife edge, given the some of the uncertainties in the global economy, we believe that SMEs are through the worst of it.”
About Business Partners:
Business Partners Limited is a specialist risk finance company for formal small and medium enterprises (SMEs) in South Africa, and selected African countries. The company actively supports entrepreneurial growth by providing financing, specialist sectoral knowledge and added-value services for viable small and medium businesses.
Comments
Post a Comment