Our opinion on the current state of CONDUIT(CND)Conduit Capital (CND) is a small financial services company primarily operating in the insurance industry. It has two main divisions: Investments and Insurance & Risk. Through its subsidiary, Conduit Risk & Insurance Holdings, the company engages in underwriting, investments, and earning commissions. Conduit Capital offers a variety of niche insurance products, including medical malpractice, primary health, funeral, and life insurance, guarantee and indemnity solutions, medical evacuation, and motor and property insurance. The company operates through brokers and agents.
The company is currently undergoing a turnaround initiated by new management. However, its listed investments remain under pressure. On 23rd May 2022, the company announced that Constantia’s gross exposure to claims resulting from the KZN floods was not expected to exceed R25 million.
On 1st August 2022, Conduit Capital reported that the Prudential Authority of the Reserve Bank had placed its subsidiary, Constantia Insurance, under prudential curatorship. Constantia Insurance accounts for 94.4% of Conduit's revenue, making its liquidation catastrophic for the company. This event caused Conduit's share price to drop sharply from 35c to 18c. Subsequently, on 21st September 2022, the company announced that trading of its shares on the JSE had been suspended following the liquidation of its largest subsidiary, Constantia Insurance Company.
On 14th December 2023, Conduit Capital mentioned that the audited results for the 2022 year-end, along with the Group's Integrated Annual Report, would likely be published in January 2024. A provisional liquidation order for Conduit's main subsidiary, Constantia Insurance Company, was confirmed in the high court on 14th September 2022.
In an update on 28th March 2024, the company stated it was still working on the publication of its financials for the year ending 30th June 2022. In a trading statement for the year ending 30th June 2024, the company estimated it would make a headline loss of between 29.64c and 33.76c, compared to a loss of 20.6c in the previous period. In a quarterly update on 28th June 2024, Conduit Capital noted that a final draft of the 2022 AFS was submitted to the auditors on 27 May 2024. The auditors are currently finalizing their review, after which the 2022 AFS will be published. Work on the interim results for the six months ended 31 December 2022 and for the year ended 30 June 2023 has also commenced. Final timelines for the publication of these results will be determined upon the completion of the 2022 year-end results.
