Mobile network operator Rain’s valuation has leapt by over R4.35 billion in the past six months, according to the latest annual results of shareholder African Rainbow Capital (Arc) Investments.
Arc Investments holds a 20.25% stake in Rain, and it reported that its share grew R881 million from R3.635 billion last year to R4.516 billion in June 2023.
This represents an over 24% surge in value.
“This increase in value can largely be attributed to the business progressing beyond the period of significant net-cash outflow as well as the recent acquisition of additional spectrum,” Arc stated.
“Rain launched its 4G mobile voice offering together with its new 5G home product, Rain One, during May 2023.”
Arc said there has been strong interest in the Rain One product since its launch.
“Rain continues to receive positive feedback from new and existing customers,” said Arc.
“Rain continues its ambitious rollout and marketing strategy to cover more towns across the country and will continue densifying coverage in all major metros.”
The company also reported that the ARC Fund made an additional investment of R81 million in Rain during August 2023.
Arc reported that Rain is tracking well against budgets and that it is budgeted to achieve earnings before interest, taxation, depreciation, and amortisation (EBITDA) of over R2.5 billion for the year ending February 2024.
“[This is] after taking into account IFRS 16 adjustments, as is industry practice,” Arc stated.
Rain’s earnings has increased substantially over the past few years, with Arc reporting that the operator first achieved R1 billion EBITDA during its financial year ending February 2022.
“This is regarded as a significant achievement as it achieved break-even in the February 2021 financial year,” Arc said at the time.
In March, Arc said Rain was on course to achieve over R2 billion EBITDA for the year ending February 2023.
Rain valuation
The table below provides an overview of Arc’s shareholding value and Rain’s valuation based on its estimates between December 2017 and June 2023.
| Rain valuation by Arc | |||
|---|---|---|---|
| Date | Arc shareholding in Rain | Arc’s shareholding value | Rain’s valuation |
| December 2017 | 20.0% | R1.892 billion | R9.460 billion |
| June 2018 | 20.0% | R2.114 billion | R10.570 billion |
| December 2018 | 20.0% | R2.330 billion | R11.650 billion |
| June 2019 | 20.6% | R2.508 billion | R12.175 billion |
| December 2019 | 20.7% | R2.712 billion | R13.101 billion |
| June 2020 | 20.7% | R3.111 billion | R15.029 billion |
| December 2020 | 20.37% | R3.493 billion | R17.148 billion |
| June 2021 | 20.26% | R3.314 billion | R16.357 billion |
| December 2021 | 20.26% | R3.372 billion | R16.644 billion |
| June 2022 | 20.25% | R3.635 billion | R17.951 billion |
| December 2022 | 20.25% | R3.635 billion | R17.951 billion |
| June 2023 | 20.25% | R4.516 billion | R22.3 billion |
