African Rainbow Capital CEO shows positive outlook for 2021

African Rainbow Capital Investments has displayed a positive outlook for the year 2021 despite facing challenges in the previous months. The company reported a 7.6 per cent decline in Net Asset Value per share for the six months ending in December. Johan van der Merwe, Co-CEO of African Rainbow Capital, remains confident in the group's ability to navigate the current operating environment and achieve growth in the upcoming months. During a recent interview with CNBC Africa, van der Merwe highlighted the mixed performance of the company's portfolio during the past six months. While some investments faced headwinds, the largest investment in rain experienced positive tailwinds, leading to an annualized return of about 15.8%. This performance, according to van der Merwe, is commendable considering the circumstances. The Co-CEO also discussed the impact of the COVID-19 pandemic on the company's investments, particularly in businesses like rain, which saw a significant increase in the number of SIM cards as remote work became more prevalent. Van der Merwe expressed optimism that the shift in work trends would continue to benefit rain, stating that there is a 'new normal' in the business landscape that will drive growth. In addition to rain, van der Merwe addressed the progress of Time Bank, noting that while the number of active accounts remains at the halfway mark, the company is focused on increasing customer engagement and offering additional products such as credit services. With plans to launch credit products in the coming months, Time Bank aims to achieve breakeven in cash flows by the end of the year. When discussing the company's capital expenditure and future strategy, van der Merwe emphasized a balance between supporting existing investments and exploring new opportunities. African Rainbow Capital intends to prioritize its current portfolio by providing support to companies facing financial constraints. Van der Merwe stressed the importance of maintaining sufficient cash reserves to weather potential future challenges, such as additional lockdowns or economic uncertainties. Overall, African Rainbow Capital Investments remains optimistic about its growth prospects for 2021. By leveraging the strengths of its portfolio companies and adapting to changing market dynamics, the group is positioned to overcome challenges and drive value for its stakeholders in the year ahead.