Remgro’s “resilient” investment portfolio

Through Edward West March 18, 2021

Share this article:

LE CAP – REMGRO’s investment portfolio experienced a “resilient performance” in the six months leading up to December 31; excluding FirstRand, which has not declared dividends, and Mediclinic International, which has also been hit hard by the pandemic.

The group, chaired and controlled by renowned South African businessman Johann Rupert, said yesterday in a forecast update for the six-month period that earnings per share from continuing operations are expected to drop 45 to 55 percent. to range between 235.1 and 287.4 cents. it shares.

However, the results were not directly comparable with the same period a year ago. Full interim results are expected to be released on March 25.

Overall profit was affected by an 80.2% lower contribution from Mediclinic International, which included the full impact of the Covid-19 pandemic on Mediclinic’s results for the six-month period ended September 30, 2020, and the suspension of its dividend to preserve liquidity, despite strong operating performance.

Due to an accounting reclassification by FirstRand from an equity-accounted investment to an investment at fair value through other comprehensive income, no profit of FirstRand was recognized during the period, while R 548 million were included in the comparative period.

FirstRand did not pay dividends during the period under review.

The decline in overall profit is also due to lower interest income resulting from the 300 basis point drop in interest rates since January 2020.

In June 2020, Remgro unbundled its 28.2% stake in RMB Holdings (RMH) and the investment in RMH was treated as a discontinued operation for the fiscal year ended June 30, 2020. For the period under review, the discontinued operations for the half-year compared to December 31, 2019 also included RMH’s equity-accounted income.

Besides Mediclinic and FirstRand, Remgro’s other investments are in consumer products, financial services, infrastructure, industry, other diversified investment vehicles and media sectors, as well as what he calls investments. with social impact.

Its main investments include Distell, Total South Africa, Rand Merchant Bank Investment Holdings, RCL Foods – Remgro increased its stake in branded foods and chicken group RCL towards the end of last year – and Siqalo Food.

Remgro’s intrinsic net asset value as of June 30, 2020 was Rand 154.47 per share. The share rose 1.53% to R107.62 on the JSE yesterday morning, indicating a haircut of around 30% from net asset value. Last year this time the share price was around R129 per share. Remgro shares closed 0.02% higher at R 106.02 on the JSE yesterday.

Previous Hinrikus and Tamkivi create a new investment vehicle
Next How to Automate Your Investment Portfolio Using the M1 Finance Pie Approach