Remgro, the investment holding company chaired by well-known businessman Johann Rupert, lifted its interim dividend a hefty 60% to 80 cents per share.
This was after intrinsic net asset value a share increased only 5% to R223.86 in the six months to December 31, 2022, from R213.10 at the same time last year.
The closing share price at December 31 was R133.03 (June 30: R129.91), representing a discount of 40.6% (June 30: 39%) to intrinsic net asset value. The share price traded 0.8% higher at R131.42 yesterday afternoon.
“Despite the challenges and negative outlook on a global scale, as well as South Africa’s own unique challenges, we believe our track record stands us in good stead to weather the storms and deliver on our vision to be the trusted investment holding company of choice that consistently creates sustainable stakeholder value,” CEO Jannie Durant said in a statement.
He said lessons of the global pandemic showed that good management was foundational to their portfolio’s ability to respond to unforeseen conditions, and “we remain optimistic about our growth prospects and those of our country”.
Mediclinic International’s contribution to Remgro’s headline earnings increased 26.9% to R732 million (R577m). Distell’s contribution increased 3% to R517m. RCL Foods’ R403m contribution was 22.4% lower.
The headline earnings contribution from Siqalo Foods fell 21% to R162m. OUTsurance Group’s contribution decreased 21.2% to R406m. Business Partners’ contribution increased to R41m from R28m. The contribution of Community Investment Ventures Holdings (CIVH) climbed to R184m from a R23m loss.
Grindrod and Seacom Capital contributed R60m and R29m (2021: R158m and R8m), respectively. eMedia Investments’ contribution fell 23.4% to R49m.
The contribution of Kagiso Tiso Holdings (KTH) increased to R348m from R45m.
Remgro’s headline earnings increased 5.5% to R3.53 billion. Headline earnings a share (Heps) increased 5.7% to 626.2 cents from 592.3c. But the results were not strictly comparable to the prior period due to various corporate actions.
The increase in headline earnings was mainly due to higher contributions from OUTsurance Group’s continuing operations, KTH, CIVH – turning profitable – and FirstRand, as well as higher interest income.
This was partly offset by lower contributions from TotalEnergies Marketing South Africa, RCL Foods and due to the unbundling of Grindrod.
Also, the comparative period included contributions of Grindrod Shipping – which was disposed of – and the discontinued operations of OUTsurance Group. OUTsurance Group unbundled its investments in Discovery and Momentum Metropolitan Holdings, and its investment in Hastings Group Holdings.
Portfolio optimisation efforts continued even though there were delays caused by regulatory red tape.
The group said the second half of the 2022 calendar year continued to be marked globally as a period of macroeconomic and geopolitical instability, largely resulting from the Russia-Ukraine war, the ensuing geopolitical tensions, escalating commodity prices coupled with inflationary pressures from supply chain disruptions.
In the South African context, the global pressures were exacerbated by serious power supply constraints, slow progress on economic and structural reforms, and rising interest rates.
Furthermore, the South African gross domestic product declined by 1.3% in the fourth quarter of 2022. Despite these challenges, Remgro said prudent management, and a strong financial position and capital allocation track record would enable it to maintain earnings momentum through the headwinds.
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