Cape trust rides high on property

WESTERN Cape-based black economic empowerment private equity fund Cape Empowerment Trust is enjoying the benefits of a bullish property market.

The group recorded an after-tax net profit increase of 382% for the 12 months to December. Net profit after tax increased to R92,3m from R19,1m in 2005.

CEO Shaun Rai, said he was confident that the company would maintain the profit growth this year. There was a boom in the property industry due to the infrastructure roll-out.

“The property value is up, rental rates have increased and there is general growth in office property. I feel bullish about the market,” said Rai.

The group’s share price has increased from 66c in December 2005 to R1,40 in December last year. It reached the R1,80 mark on Friday.

The group is spread across six main industries, including technology, property, financial services, corporate, security and gaming.

Formed as an empowerment vehicle in the late 1990s when black economic empowerment was frowned upon by the industry, Cape Empowerment looked set to become another casualty at the time, as empowerment funding was hard to come by.

Rai is credited with turning the group around when it was almost down and out. “Through the accumulation of new operating assets and promising investments through CEO Shaun Rai’s efforts, the group was pulled out of a rather deep rut and has moved a long way from its share price standing at 7c to R1,80,” says Cape Empowerment spokesman Sean Dalton.

In January 2005, the group had a market value of just R26m. Today it is worth more than R350m. Headline earnings a share jumped from 10,78c in 2005 to 44,63c last year.