Prosus FY Numbers - Strong Balance Sheet

On Friday evening, Naspers and Prosus released their full-year numbers. These companies are mostly interchangeable - Naspers owns 3/4 of Prosus and that stake in Prosus represents 99% of Naspers value. Generally, the market doesn't pay much attention to these results because the bulk of Prosus's value comes from its stake in Tencent, which trades on the Hong Kong stock exchange. Each day, the Tencent price changes in Hong Kong, and then the Prosus and Naspers share prices move in accordance when the European and South African markets open.

For Vestact clients, these two companies are our biggest holding by some margin, with 345 clients owning Prosus. For the year so far, Naspers is up 35% and Prosus is up 51%, so our local clients have been well positioned to be in these stocks. This growth has been spurred by an increased adoption of technology and Prosus's strong balance sheet, which has a meaningful cash position. They are always looking for places to invest.

Here are the high level numbers, revenue up 23% and core headline earnings up 13%. Looking specifically at South Africa, Takealot sold 46% more goods over the last year and Mr Delivery doubled the amount of food delivered. On a side note, if you own Naspers shares, you need to use Mr Delivery instead of Uber Eats. Mr Delivery happens to be cheaper too.

For the group, apart from Tencent, their big bet is on food delivery. They plan to triple the size of their food delivery business over the next five years. So far that plan is mostly on track with the value of food being delivered doubling over the last year. They have significant operations in Europe and South America, which were some of the fasted growing regions in the world. As is the case with most technology businesses, rapid revenue growth is normally coupled with increased losses. For their food delivery business, losses increased from $171m to $624m.

Overall, Prosus and Naspers are a diversified technology company that we are very fortunate to be able to invest in. Their stake in Tencent has been called the investment of a generation, and continues to provide value to South African investors. This will continue to be a core holding for Vestact clients for the foreseeable future.