NVest Financial Holdings Investor Presentation March2015
In a Nutshell – who we are… The NVest Financial Holdings Group is an Financial all encompassing Advisory Eastern Cape based financial services Property Stock Services Broking group, providing Broad mainly retail clients, range with broad range financial financial services services including financial Asset Short Manage Term advisory, stock ment Insurance broking, short term assurance, fiduciary, Fiduciary asset management and property services. AUM = R13.35bn 2
Composition of the NVest Group (POST LISTING) NVest Financial Holdings Limited • Holding company based in East London. Reg. 2008/015990/06 NFB Finance Brokers Eastern Cape (Pty) Limited • Ownership 100%, Reg. 2003/030583/07, Financial Services Provider NFB Finance Brokers Port Elizabeth (Pty) Limited • Ownership 65%, Reg. 2005/025001/07, Financial Services Provider NFB Insurance Brokers (Border) (Pty) Limited • Ownership 76%, Reg. 1996/010593/07, Financial Services Provider NFB Asset Management (Pty) Limited • Ownership 50%, Reg. 2005/042953/07, Financial Services Provider NVest Securities (Pty) Limited • Ownership 100%, Reg. 2008/015192/07, Member of the JSE Limited NVest Properties Limited • Ownership 45%, Reg. 2010/008681/06 NVest Property Services (Pty) Limited • Ownership 76%, Reg. 2005/041916/07 Independent Executor & Trust (Pty) Limited • Ownership 70%, Reg. 2008/018611/07, Member of Fiduciary Institute of SA 3
Insight into our Businesses NVest Financial Holdings Limited • Group “Head Office” Structure and Holding Company • Employs 104 employees in group as a whole (of which 16 work directly for NVFH) • 36% of employees within entire group of companies have a 3 year diploma/degree or more • Average employee duration working within the group of companies: 8 years NFB Private Wealth Management • Inclusive of NFB Finance Brokers Eastern Cape (Pty) Ltd and NFB Finance Brokers Port Elizabeth (Pty) Limited – with 41 staff, largest component of Group • The original “core” company & largest independent financial advisory business in EC • Specializing in: • Financial advisory services: general investment, risk and financial advice and intermediary services to retail clients; • Employee Benefits: group pension and provident schemes & group risk planning; • Healthcare Advisory Services: personal and group healthcare (medical aid) planning • Assets Under Management & Administration: R6.65bn 4
Insight into our Businesses NFB Insurance Brokers (Border) (Pty) Limited • Short-term insurance brokerage specializing in Personal and Commercial insurances • Largest independent insurance brokerage in East London with 22 permanent employees NFB Asset Management (Pty) Limited • Multi-manager Investment Specialists providing asset allocation, fund selection and portfolio construction expertise • Manage 3 registered unit trust portfolios and a number of model portfolios • Assets Under Administration & Management: R2.36bn NVest Securities (Pty) Limited • A traditional stock broking company that focuses on private clients – 9 employees • Previously East London branch of Sasfin Securities • The company’s core competency is managing both local and offshore discretionary equity portfolios & offers execution-only JSE trading and money-broking services. • Also manages the successful NFB Equity Fund (registered unit trust) • Assets Under Management & Administration: R6.75bn 5
Insight into our Businesses NVest Properties Limited • A property investment company structured to invest in SA retail, industrial and commercial property with strong cash flows and solid property fundamentals • Property portfolio (currently valued at approximately R300m) • Combination of bank finance (30 – 50% Loan to Value), commercial paper (“Notes”) and shareholder loans used in order to enhance long term capital appreciation Independent Executor and Trust (Pty) Limited • A fiduciary services provider, specializing in the drafting of Wills, Estate Planning and the Administration of Deceased Estates and Trusts NVest Property Services • Formed in April 2015 as an extension of the services already being provided by property holding company NVest Properties. • Predominantly a property management, sales and leasing business, together with all services ancilliary thereto. 6
Audited Historical Information (2012-2014) STATEMENT OF COMPREHENSIVE INCOME Year ended Year ended Year ended Feb 2014 Feb 2013 Feb 2012 R’000 R’000 R’000 97,212 78,579 75,964 Revenue Operating Profit 31,500 22,859 20,869 Operating Profit % 32% 29% 27% Investment Income 1,654 1,204 1,031 Taxation -9,736 -7,805 -6,938 Minority Shareholders -1,742 -703 -417 Profit before associates 21,676 15,555 14,545 Income from associates* 9,251 5,431 65 Profit attributable to shareholders 30,927 20,986 14,610 Less: Profit on sale of property in associate -3,212 - - Normalised earnings attributable to 27,715 20,986 14,610 shareholders *=mainly 45% of NVest Properties Limited 7
Our Journey to date…(1985-1998) • NFB Financial Services Group was founded in April 1985 in Port Elizabeth, fundamentally as money market and gilt brokers. 1985 • An NFB office was opened in East London. 1986 • NFB business operations were extended into equity and unit trust investments as a result of low interest rates. A further office was opened in Johannesburg. 1987 • NFB operations were extended to Frankfurt to take advantage of Eskom bond trading through the Financial Rand. 1990 • Fedsure acquired 49% of NFB’s domestic and international business operation. 1994 1995 • NFB’s founding M.D. along with the international business, formally separated. • NFB introduced a Short Term Insurance division in East London to cater for the short term insurance needs of our individual and corporate clients. 1997 • NFB’s Port Elizabeth division was sold during this year (to be re-opened in 2008). • The year also saw the birth of NFB’s Employee Benefits and Healthcare Advisory Services Divisions in 1998 East London. 8
Our Journey to date…(2000-2003) • A watershed year in terms of profit, performance and the level of optimised earnings achieved. • NFB Group launched its own NFB branded wrap fund. • NFB Portfolio Management Services (PMS), NFB’s exclusive share portfolio management division, 2000 opened in East London. • NFB selected as one of the top 20 non-listed companies in South Africa. • Saw the launch of a new brand identity of the NFB group together with a coordinated effort to raise the group’s profile in the market. • Fedsure sold its interest in NFB as a result of Fedsure being acquired by Investec. 2001 • In a quest to optimise value-add to clients, NFB PMS launched the NFB Managed Income Portfolio. • By Dec the group had accumulated approximately R3 billion AUM. • Again selected as one of the 20 top non-listed companies in South Africa. • By April, NFB PMS had accumulated R100 million of AUM (over 2½ years). • NFB launched a range of risk-profiled funds, actively managed by NFB’s Asset Management (NFB AM) 2002 Division, a new division created for that purpose. • Selected as one of the 20 top non-listed companies in SA for third year running. • NFB PMS introduced the NFB Dividend Growth Portfolio. 2003 9
Our Journey to date…(2004-2008) • By January, AUM of NFB PMS had grown to R200 million, doubling in less than 2 years. • By the end of April, NFB AM had R150m in AUM. By August AUM had grown to R200m. 2004 • NFB AM was appointed as Asset Managers to its first institutional portfolio, taking AUM to over R400m. • NFB’s East London division formally separated from the Johannesburg based Company to form an East London owned and managed entity, NFB Eastern Cape (Pty) Limited [later to be the foundation of the NVest Financial Holdings Group of Companies formed in 2008]. • NFBAM AUM exceeded R500m mark. NFB Asset Management (Pty) Limited was formally incorporated as a separate entity. 2005 • NFB East London operation AUM reached R2 billion after the split from NFB Johannesburg. • NFBAM AUM exceeded R1 billion. • NFB PMS AUM exceed R650 million. 2006 • NFB launched its first two registered unit trusts, the NFB Conservative Fund of Funds and the NFB Balanced Fund of Funds. 2007 • NFB’s East London practice was awarded third place in the Celestis SA Best Practice of the Year Award. • NFB East London operation reached R3 billion AUM in managed investments alone. • NFB launched a third unit trust, the NFB Equity Fund. 2008 • NFB re-established itself in Port Elizabeth. • In July, the group re-structured to become the NVest Financial Holdings Group of Companies , of which NFB was now a subsidiary. Sasfin Financial Services acquired a 19% stake in the Group. • December 2008 saw the Group acquiring Sasfin’s East London branch to form NVest Securities (admitted as an Equities member of JSE Limited that same year) into which NFB PMS was amalgamated. 10
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