Brait's strategic focus: Optimising investments in Virgin Active and New Look

Private equity investment firm Brait is focused on positioning its remaining big investments, which include control of Virgin Active and a shareholding UK fast fashion retailer New Look, for asset realisation or unbundling.

Over the past two years, Brait, which has well-known South African businessman Christo Wiese as its main shareholder with an approximate 38% stake, has indicated at various stages an intention to realise its investments, possibly even through a listing of global wellness group Virgin Active, late in the 2026 financial year. However, the annual report released on Friday carried no further explicit plans to divest from its key investments.

The report stated, however, that appropriate portfolio company board representation would be maintained to direct investment strategy, optimise growth in earnings before interest, tax, depreciation, and amortisation (EBITDA), and generate free cash flow and value creation. Exit alternatives for each portfolio company, which may include public offerings and resulting secondary market share sales, trade sales, or a break-up, would also continue to be assessed.

Chairman Richard Nelson said significant progress had been made on the strategy of returning value to shareholders. “The performance of our principal investment companies has exceeded expectations, and our balance sheet is notably stronger following last year’s recapitalisation,” he said in the report.

Brait’s reported net asset value (NAV) per share at March 31, 2025, was R3.06, a 6% increase compared to March 31, 2024, on a like-for-like basis, after adjusting for a recapitalisation.

The share price on the JSE was trading 1.83% lower at R2.15 on Friday afternoon, but the price is nearly double the R1.10 it traded at a year previously.

Virgin Active’s strong operational performance continued in the financial year, with a 13% increase in revenue driven by growth in memberships and yields. Membership in South Africa was up 2%, in Italy it increased 3%, in the UK by 5%, and in Asia Pacific countries, it fell by one percent.

The report also provided some insight into Virgin Active’s current valuation: It was valued at R12.71 billion at acquisition in 2015, and further investment of R1.49bn was made since then. Capital of R3.08bn was raised in the period, bringing the total to R17.29bn. The carrying value and some R974 million proceeds at March 31, was R11.18bn.

The investment in Premier saw a continued strong operational performance by the food and consumer goods manufacturer throughout the year, with revenue and EBITDA growth of 7% and 15% year-on-year, respectively.

Investment continued across Premier’s key operating units with an annual capex spend of R726m, mostly on bakery upgrades.

New Look, which comprises 3% of Brait's assets, continued to experience difficult trading conditions in the UK fashion market, with significant discounting resulting in a disappointing 4% decrease in sales and a 3% reduction in gross profit year-on-year.

“While Brait did not participate in the recently announced £30m capital raise of the business, the company was able to retain most of its shareholder rights,” the report said. The capital injection was intended to fund the online growth strategy. To offset regulatory inflation and align with a more digitally focused model, a restructuring across the business was initiated.

Nelson said the recapitalisation in August 2024, which included extensions and partial repayments of bonds, a R1.5bn rights offer, and the sale of R444m of Premier shares at a narrow discount to the prevailing share price, resulted in a R1.38bn reduction in Brait’s debt.

Brait’s available cash and facilities amounted to R1.1bn at the reporting date, and R838m post-balance sheet date following the £10m repurchase of convertible bonds in April 2025.

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