Remgro FY HEPS slump 18.8%

Remgro, a diversified investment holding company based in South Africa, has had a challenging year for the 2023/2024 financial period, with a drop in headline earnings per share (HEPS) by 18.8% and earnings per share (EPS) plummeting by a staggering 86.9% to 224 cents. Jannie Durand, the CEO of Remgro, joined CNBC Africa to discuss the results. Durand highlighted the impairments and transformative actions that have impacted the company's performance over the past year. He noted that despite challenging corporate actions and impairments, the second six months showed improvement compared to the first half of the fiscal year. Durand mentioned that the Heineken transaction and the CIVH transaction have posed significant challenges for the company. The Heineken transaction faced difficulties due to a tough market, while the CIVH transaction is still pending a favorable ruling from the tribunal, causing delays and additional costs. Furthermore, Mediclinic, while showing promising results in South Africa and the Middle East, struggled in Switzerland due to high input costs and a shortage of nurses. However, Durand also mentioned positive contributions from companies like Outsurance, RCL Rainbow Investments, Air Products, and Tequila Foods, which helped offset some of the negative impacts. Despite the reported decrease in earnings, Remgro's underlying earnings remained stable, reflecting the company's confidence in its portfolio as evidenced by a 15% increase in the final dividend. Durand emphasized the importance of being adaptable and investing in operational efficiency to navigate challenging times successfully. He highlighted the defensive nature of their portfolio and stressed the significance of being proactive and self-reliant, particularly in uncertain economic conditions like those currently faced in South Africa. Looking ahead, Durand expressed optimism about the improving economic outlook following recent changes in governmental leadership, decreasing inflationary pressures, and declining petrol prices. He outlined strategies for the future, including focusing on the upcoming peak season for the Heineken transaction, restructuring the portfolio through divestments like the sale of their stake in MMH, and exploring new investment opportunities to enhance the company's portfolio. Durand also indicated interest in sectors like food and energy for potential acquisitions and growth opportunities. Despite challenges, he remains committed to pursuing strategic investments and capitalizing on favorable market conditions to drive growth and deliver value to shareholders.