Page 18 - Stellar IAR2015

BOARDREPORT (CONTINUED)KEY FOCUS AREASThe Group’s focus is to:• Drive EBITDA growth and free cash ow conversion in underlying investees, both organically and inorganically;• Generate su cient cash ow independently from the core investee companies to service preference share dividend liabilities andongoing operational expenses, whilst providing ongoing NAV accretion and reducing cash drag; and• Constantly assess and seek to optimize the capital structure of the Group in order to enhance shareholder returns.SHAREHOLDERSThe Group’s shareholder base was signi cantly strengthened during the year with the introduction of Titan (Dr Christo Wiese) as an anchor shareholder.PROSPECTS AND KEY FOCUS AREAS FOR THE YEAR AHEADTrading conditions in the markets in which the Group’s core industrial asset Torre operates are expected to remain extremely challenging for the foreseeable future. There is deep distress in the mining sector and continued pressure in most other markets, including construction, manufacturing and consumer markets. However, Torre has a strong balance sheet and continues to pursuepro t growth via a combination of market share gains and cost control.Tellumat has traded well during the year under review. The Group will seek to capitalize on this by expanding its managed services o ering and partnering with key technology industry players to become a technology provider of rst choice within the telecommunica- tion, air tra c management, technology manufacturing and defense sectors. The Group may also pursue inorganic growth strategies within certain market sectors.Stellar Capital will continue to support Shawn Stockigt as he executes on the turnaround strategy at Cadiz Asset Management. In a short period of time Shawn has stabilized the team in this business, stemmed client out ows and overseen a marked improvement in invest- ment performance. The next phase will be a return to pro table growth and we are con dent that Shawn and his team will deliver for us in this regard. In addition to this organic turnaround strategy, we will continue to assess acquisition opportunities in the nancial services sector should they present themselves.The Group has a strong balance sheet and ready access to additional capital and is well positioned to partner with scalable, quality businesses who are seeking a strong shareholder of reference to support their growth ambitions.APPRECIATIONWe are grateful for the support provided to the Group by our employees, shareholders and banking partners. The quality of both our investment portfolio and our key stakeholders allows us to move forward with con dence into the new nancial year.On behalf of the BoardCharles PettitChief Executive Of cer14 | STELLAR CAPITAL PARTNERS